‘The energy shortage was officially accorded crisis status last week,’ begins The New York Times. As you flick through your morning paper, you read about dry pumps at gas stations and factories urged to cut short the working day. It could be 2026. But this is 11th November 1973. A few weeks following the Organization of the Petroleum Exporting Countries (OPEC) oil embargo. A crisis which saw oil prices jump 400% and its effects ripple throughout the supply chain.
Shocks like this used to happen once in a generation, with far reaching consequences for the global economy and production. The Second World War and 1956 closure of the Suez Canal also spring to mind. But, for most of us working today, we have benefited from a relatively stable environment. Between 1950 and 2008 world trade tripled as a share of GDP. Labor and transportation costs have remained low. Technological advances have allowed cross-border production to flourish. Disruptions have been anomalies. Issues resolved quickly. You probably felt pretty confident about what was coming down the tracks. Until now.
Open your news app and you’ll be hit by headlines detailing the latest crisis. Tariffs. Wars. Energy shortages. Cyber-attacks. Floods. Wildfires. All under the backdrop of growing regulatory and consumer pressure. At times, it can feel never-ending. Supply chain volatility is no longer cyclical. The shocks you face have become more frequent and their effects more persistent. The COVID-19 pandemic exposed how critical supply chains are to national interests. The war in Ukraine demonstrated how destabilizing geopolitical events can be. You are in an era of permanent disruption.
Your new risk landscape
Feeling the impact of disruption is the CEO of the electric car manufacturer. In 2024, delays started mounting at some of the world’s most important choke points - the Strait of Malacca, Suez Canal and Panama Canal - affecting the flow of materials, components and goods. Soon enough a supply chain headache came on. One compounded by US tariffs and tightening Chinese export controls for rare earth minerals. This was all before the Strait of Hormuz crisis, with manufacturers who bought aluminum from the Gulf now reassessing contracts and designs.
It sounds like a lot. But “if you've been feeling confused and as though everything is impacting on you all at the same time, this is not a personal, private experience,” says historian Adam Tooze. “This is actually a collective experience.” The word for it is polycrisis. And it does a good job to encapsulate your new risk landscape, as you consistently find yourself managing multiple, compounding pressures.
There are signs all over. That $7 latte in your local cafe shows this is not just isolated to manufacturing. Drought in Vietnam and severe frost in Brazil damaged coffee production in 2021 and 2024, pushing prices to multi-decade highs. US tariffs then caused chaos on world coffee markets, while new EU anti-deforestation rules are creating extra costs for farmers which get passed on. It is no surprise that supply chain anxiety is at an all-time high. Volatility is now structural, meaning you can no longer assume a return to stability after each crisis. By treating disruption as business as usual however, you can better manage overlapping risks to maintain continuity.
What are you up against?
You face various pressures in this new environment, with pain points shaped by where you operate. But there are four connected forces redefining supply chain risk for us all. Geopolitics, digital threats, regulation and consumer expectations are working together to increase your risk exposure and create a more complex operating context.
Geopolitical turbulence
The Ukraine war, US-China trade war and Strait of Hormuz crisis all show how geopolitics is shaping supply chains. Shifting global alliances, regional conflicts, sanctions and resource nationalism are creating uncertainty, with supply chains themselves being used as tools for international policy. US tariffs on semiconductors - which raised costs and forced many to rethink supply routes - are just one example. Growing concerns that semiconductors may be used for economic coercion mean we are likely to see further regulations across Europe. Gone are the days when your supply chain was simply about getting goods from A to B. It is now part of a much bigger geopolitical picture.
Digital disruption
Digital technologies have changed supply chains for good. Before ERPs, we relied on paper-based ledgers and unruly spreadsheets. An administrative nightmare. Yet, as you have become more dependent on this tech, your vulnerability to technology failures and cyber-attacks has also increased. Artificial intelligence (AI) creates efficiencies, but brings new attack surfaces and threats like data poisoning and model tampering. Nearly one in three organizations (29%) have reported rising cyber-attacks in their supply chains. At the same time, hyperconnectivity means the impact of a single attack or failure can cascade through your operations. AWS’ outage in 2025 showed how fast digital disruption can create physical bottlenecks, as cloud-based systems for things like customs, dispatch and tracking went offline.
Regulatory pressures
Alongside these disruptions, regulatory pressures are growing. Wherever you are in the world, you have likely seen a surge in compliance requirements. It can be difficult to keep up, especially if your operations cross borders and laws extend to your supply chain. Initiatives like the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) not only look at environmental and social risk in your operations, but also your suppliers. As you monitor your emissions and manage your labor practices, you face complex layers of accountability. And, with that, increased demands for traceable data.
Consumer expectations
Your customers’ expectations are changing too. More than ever, supply chain practices and performance influence your reputation. In the aftermath of disruption, three quarters of companies have found themselves responding to a rise in customer complaints. 68% have lost business or contracts because of logistics failures. A position no-one wants to be in. You also need to think about environmental and social governance (ESG). Gen Z and Millennials are 27% more likely than older generations to buy from brands that care about their impact on people and planet. If issues arise in your supply chain, social media can quickly escalate brand damage. In 2020, fashion retailer Boohoo lost £1 billion in value after an investigation revealed poor working practices at one of its factories.
Why traditional compliance is not enough
In this new reality, legacy risk management centered on compliance falls short. Analysis shows most global firms experienced significant supply chain disruption in the past year. Yet they found themselves floundering, lacking the preparation to respond effectively, then looking at their processes and wondering what went wrong. Periodic audits might tick the boxes necessary to meet standards, but they do little to reduce your actual risk exposure. You are more likely to end up reacting to crises after they occur, trapping you in 'firefighting mode' when you could be building resilience.
Traditional risk management approaches also encourage siloes, with responsibilities fragmented across departments. Your IT department looks at cyber risk, while your logistics team considers transport. But what happens when these risks converge? A cyber-attack might cause a significant delay in shipping. Fragmented efforts lead to gaps in communication and limit your oversight. This prevents you from seeing the full picture. Risk signals get missed. Problems get addressed in isolation. Issues are more likely to spiral into events that impact your entire organization. And surprises are more likely to repeat themselves.
The lack of resilience created by traditional compliance models costs. Many firms have faced financial losses and operational breakdowns due to unanticipated supply chain failures. According to one industry survey, 94% of companies have seen their revenue dented by disruption. It is estimated that supply chain failures now cost consumer brands over USD $12 billion a year.
The resilience gap
With risk on the rise, your preparedness is more important than ever. But disruptions are intensifying faster than many organizations’ risk capabilities have matured. To put that into numbers, supply chain disruptions surged by 38 per cent between 2023 and 2024.
While 54% of organizations have experienced major supply chain disruption in the past year, many still lack enterprise-wide resilience strategies. Over 60% of organizations rate themselves as ‘basic’ or ‘ad hoc’ across key capabilities in supply chain resilience like logistics continuity. That means over half of firms are stuck at traditional compliance, leading to reactive and siloed practices.
Right now, only 38% of organizations do comprehensive supplier mapping and fewer than 15% have full visibility beyond Tier-1 suppliers. In other words, most of you are blind to vulnerabilities deep in your supply chain. At the same time, 63% of organizations say that supplier failure is their biggest risk. But only 29% have a formal risk register. There is an alarming gap between risk awareness and readiness. Something we explore in more detail in the second chapter of the MESH series.
What should you do to build resilience?
Risk in the modern supply chain is complex and interconnected. This means you need an enterprise-wide risk management system. That may sound onerous, but in reality it is going to make your life easier.
Effective approaches assess where risk may emerge on an ongoing basis, as well as how it interacts across your supply chain. As pressures change and your company grows, an integrated, agile risk program gives you a sturdy foundation that improves your disruption response.
BSI's MESH methodology provides a structured roadmap to help you achieve this resilience. Instead of one-off actions, it offers a model for continuous improvement, based on four key pillars:
1. Mapping
You map your supplier networks to identify critical nodes, dependencies and vulnerabilities. End to end visibility helps you understand where risk is most likely to surface.
2. Evaluation
You assess the maturity of your current risk management model. Identifying your weakest areas will allow you to build resilience in a structured, practical way.
3. Strategy
You create a resilience strategy aligned with your business objectives. You prioritize the areas that will have the most impact.
4. Harmonization
You embed risk management into your day-to-day processes. You align expectations and standards across teams and suppliers.
Unlocking strategic advantage
There may be parallels with the 1970s oil crisis, but today's risk landscape looks very different to yesterday. Supply chains that were once stable are now exposed to permanent disruption. Trade wars, climate change, AI all create new challenges. While regulators and consumers add to these pressures.
In the middle of this collective ‘polycrisis’ however, you have an opportunity. Your supply chain not only affects operational efficiency. It also has the power to shape reputation and performance. Your bottom line. And your ability to achieve broader goals, such as sustainability.
By putting resilience at the heart of your organizational strategy, you see risks ahead of time. You act early to protect your position. You keep products moving. You maintain consumer trust. You grow your market share.
An integrated approach to supply chain risk management gives you strategic advantage. And that is why we have developed BSI’s MESH methodology.
How mature is your approach to risk management?
- How many supply chain disruptions have you faced in the last year?
- How many of these disruptions had you prepared for?
- What areas of your supply chain are potential blind spots for you?
- Are your resilience initiatives integrated across your enterprise? Or are they confined to one-off projects?
Look out for the next chapter in our MESH series to uncover how traditional risk management approaches may be failing you.
