TAKEAWAYS
RISKY BUSINESS Mitigating supply chain risk is a top priority for many organizations as the new year kicks in. But determining where exactly to place the focus is a crucial factor to overcoming the risks. As part of its annual slate of predictions, Moody’s identifies the top three most important areas in supply chain risk in 2025.
environmental damage. This will continue to sharpen the focus on supplier due diligence and pose reputational and financial risks to firms with flawed processes. 3. VALUE AT RISK Supply chain executives have long pushed for a way to quantitatively measure the impact of dierent issues and crises on a company’s performance. It has been a long- standing gap, but data availability, new technology (including GenAI), and advances in supplier risk assessments make it easier to size up problems before they fully materialize. Value-at-risk calculations can help organizations determine whether their risk mitigation strategies represent value for money when compared to the potential revenue losses in the event of a supply chain disruption.
1. SUPPLY CHAIN RESTRICTIONS Supply chain restrictions continue to play a large role, putting upward pressure on costs. Recent examples: European taris on Chinese autos and the United States’ plan to prevent Chinese software and hardware from entering cars. 2. REPUTATIONAL RISK IN THE SUPPLY CHAIN Reputational risk will likely be at its highest in recent memory. This is a result of polarization of public opinion and ever-present social media. Doing business with a supplier whom a lot of your customers view negatively will be hard to navigate. Furthermore, legislation like the German Supply Chain Due Diligence Act exemplifies a global trend of corporate transparency and due diligence laws addressing modern slavery, forced labor, human tracking, and
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