Table of Contents
- A New Wave of Supply Chain Disruptions (2024-2025)
- Lessons from Past Supply Chain Crises
- Modern Risks to Supply Chains
- Strengthening Resilience: Supply Chain Risk Management Strategies and Policies
- Conclusion
A New Wave of Supply Chain Disruptions (2024–2025)
Global supply chains have been under extraordinary strain in recent years, culminating in a surge of disruptions in 2024. According to industry data, supply chain disruptions increased by 38% worldwide in 2024 compared to the prior year, demanding a renewed focus on supply chain risk management strategies. This marked a sharp reversal after a period of relative stabilization in 2023. Multiple converging factors—from natural disasters to geopolitics—drove this spike in turmoil.
Several high-impact incidents in 2024 and early 2025 underscored the fragility of global logistics. In late 2023, Houthi rebel attacks near the Red Sea forced cargo ships to reroute, disrupting an estimated $6 billion per week in trade flows and lengthening delivery times by over a third. This “Red Sea crisis,” sparked by spillover from the Yemen conflict and Israel-Hamas war, continued into 2024 and became one of the most consequential supply chain events of the year. Meanwhile, the ongoing conflict in Ukraine and renewed fighting in Israel/Gaza further strained supply networks for energy, food, and industrial goods.
Tensions in East Asia also rattled supply lines. U.S.–China strategic rivalry intensified, with rising concerns over Taiwan’s security and tit-for-tat trade measures. In December 2024, Beijing imposed stringent export restrictions on gallium, germanium, and antimony—critical minerals for semiconductors and defense systems—highlighting China’s leverage over key inputs. Earlier in 2024, Western governments applied risk management strategies such as tightened controls on advanced chip exports to China, and Beijing’s retaliation via mineral export bans illustrated how geopolitical friction can directly hit supply chains.
Other flashpoints emerged as well. Iran asserted itself in strategic waterways, seizing commercial vessels as a form of retaliation and leverage. In April 2024, for example, Iranian naval units hijacked the MSC Aries, a container ship linked to Israeli ownership, halting nearly $94 million worth of cargo destined for seven countries. This was one of several ship seizures by Iran and its proxies during the year, reminding industry that the Strait of Hormuz and surrounding waters remain vulnerable to state-sponsored disruptions. Heightened Chinese military drills around Taiwan and North Korean missile tests also threatened to upend air and sea traffic in their regions. Although no blockade materialized, each escalation forced companies to prepare contingency plans.
On the natural hazard front, climate-related disasters continued to batter supply routes. 2024 saw an 119% jump in extreme weather-related disruptions globally, with flood alerts up 214% and major hurricanes/typhoons up 101% year-over-year. For instance, low water levels in the Panama Canal due to drought created backlogs of ships and delayed shipments between the Atlantic and Pacific. Typhoons in East Asia and hurricanes in the Americas repeatedly snarled ports and inland logistics. The message was clear: whether man-made or natural, disruptive events are coming fast and from all directions.
Lessons from Past Supply Chain Crises
Today’s challenges do not exist in isolation—they echo a history of supply chain crises that have shaped how we manage risk. It’s instructive to look at some particularly noteworthy past incidents for context:
- COVID-19 Pandemic (2020–2021): The global pandemic was an unprecedented shock, temporarily bringing large swaths of manufacturing and transport to a halt. Supply chain disruptions soared by 67% in 2020, with COVID-19 identified as the most damaging event of the year. Companies and governments grappled with acute shortages of personal protective equipment (PPE), semiconductors, pharmaceuticals, and other essentials as lockdowns and illness shut down factories and ports worldwide. The just-in-time inventory model that had long dominated was fundamentally questioned as businesses struggled to secure inventory amid cascading delays.
- Suez Canal Blockage (2021): In March 2021, the massive container ship Ever Given ran aground in the Suez Canal, completely blocking this critical artery for nearly a week. The Suez handles roughly 12% of global trade, and each day of the blockage held up an estimated $9 billion worth of goods. By the time the canal was cleared, hundreds of vessels were backed up at both ends. The incident vividly demonstrated how a single point of failure—one ship in one chokepoint—could wreak havoc on supply routes from Asia to Europe and beyond. Analysts calculated that each day of immobilization could cost global trade between $6–10 billion. Companies reliant on Suez had to reroute ships around Africa, adding weeks of transit, or wait it out, incurring heavy costs.
- Tohoku Earthquake & Fukushima (2011): The 9.0 magnitude earthquake and tsunami that struck Japan in March 2011 had global supply chain ramifications. Northern Japan was a hub for automotive and electronics components. The disaster knocked out factories producing critical parts such as advanced microcontrollers from Renesas Electronics, causing production to plummet. Japan’s domestic vehicle output fell by over 50% in the month after the quake, with some major automakers like Toyota and Honda seeing output drops of 80%. This in turn led to a 60% drop in Japanese auto exports in the subsequent two months, creating parts shortages that idled assembly lines in North America and Europe. The 2011 Japan crisis was a wake-up call about geographic concentration risk: firms that had single-sourced components from the affected region had no quick alternatives.
- Global Cyber Attack on Maersk—NotPetya (2017): Not all supply chain disruptions are physical. In June 2017, hackers unleashed the NotPetya malware in Ukraine, and it quickly spread globally—notably crippling A.P. Moller-Maersk, the world’s largest container shipping line. Maersk’s IT systems—from port terminals to cargo booking—went down for days, forcing a reversion to manual operations. 76 port terminals worldwide were shut or disrupted, and Maersk estimated the incident cost it up to $300 million in losses. This was a watershed moment highlighting cyber supply chain risk: even an indiscriminate cyber attack can spill over and halt the physical movement of goods on a global scale. It drove home the need for robust cybersecurity in logistics and the interdependence of digital and physical supply chains.
- Somali Piracy Peak (circa 2010): A decade ago, piracy off the Horn of Africa was the top concern for maritime supply routes. In 2010–2011, heavily armed Somali pirate groups hijacked dozens of vessels in the Gulf of Aden and Indian Ocean. In 2011 they launched 237 attacks, taking hundreds of crew hostage. The threat grew so severe that it was estimated to cost the global economy around $7 billion annually at its height through ransom payments, increased insurance, naval patrols, and rerouting ships. A concerted international naval effort eventually suppressed Somali piracy, but it served as a stark example of how criminal networks can disrupt major trade arteries. The recent reemergence of isolated pirate attacks in that region, taking advantage of security vacuums, shows this risk could return if vigilance lapses.
Each of these crises—whether a pandemic, a natural disaster, a single point chokepoint failure, a cyberattack, or organized crime—has shaped the evolution of supply chain risk management. They have prompted companies to diversify supplier bases, carry more safety stock, invest in monitoring tools, and collaborate more closely with governments on security. The past incidents form a historical baseline to assess today’s threats, which are arguably even more complex and intertwined.
Modern Risk to Global Supply Chains
In the current environment, geopolitical threats and illicit activities pose some of the gravest risks to supply chain security. Unlike sudden natural disasters, these threats are often intentional—driven by adversarial nation-states, criminal organizations, or extremist groups seeking strategic advantage or financial gain. Below we examine several key threat vectors and actors.
Risks from Geopolitical Rivalry and Nation-State Leverage on Supply Chain Management
China looms large in any discussion of supply chain risk. As the world’s manufacturing powerhouse, China is embedded in countless supply chains—which gives it both influence and a potential chokepoint role. Beijing has shown a willingness to wield that leverage. For example, China has steadily acquired control over strategic raw materials and minerals. By investing heavily in South America’s “Lithium Triangle” (Argentina, Bolivia, Chile), Chinese firms have secured vast lithium reserves crucial for batteries and green tech. This expansion advances China’s clean energy goals while posing risk to Western critical mineral supply chain management. Analysts warn that Beijing’s dominance in lithium and rare earth elements creates economic leverage and dependency for the U.S. and allies. A similar scenario played out in 2010, when China abruptly halted rare earth exports to Japan during a diplomatic spat, spurring Japan and others to seek alternate suppliers.
China’s geopolitical assertiveness is not limited to resources. The country’s contested claims in the South China Sea pose a direct risk to global trade flows. Trillions of dollars in goods transit those waters annually between East Asia, the Middle East, and Europe. China’s militarization of disputed islands and aggressive naval patrols have at times raised fears of conflict or blockade. Indeed, China’s maneuvers in the South China Sea challenge the freedom of navigation that underpins global commerce. U.S. Indo-Pacific Command officials and allied navies have warned that any kinetic conflict over Taiwan or in the South China Sea could sever vital shipping lanes, posting a catastrophic to global supply chains. The mere threat has driven some companies to diversify shipping routes and consider “friend-shoring” production to countries less exposed to a China-U.S. clash.
Beyond physical trade routes, China also figures prominently in technological supply chain risks. Western governments have grown wary of Chinese-made telecommunications and IT equipment in critical infrastructure, fearing backdoors or espionage capabilities. This prompted the U.S. to ban Huawei and ZTE gear from telecom networks via the 2019 NDAA and FCC actions, and to scrutinize Chinese components in the defense supply chain. The U.S. Intelligence Community’s 2024 Annual Threat Assessment warned that China will continue to expand its global intelligence efforts to challenge U.S. security and steal trade secrets and IP to bolster its own industries. The DNI further stressed that China’s state-backed economic espionage and industrial policies are directly seen as supply chain threats—whether through counterfeit parts, compromised software, or coerced technology transfers.
Taiwan is a critical piece of the China risk calculus. Taiwan produces about 90% of the world’s most advanced semiconductors, mostly through the Taiwan Semiconductor Manufacturing Co (TSMC). Were China to follow through on threats to forcibly unify with Taiwan, the resulting disruption to the semiconductor supply chain would be seismic. Even a temporary blockade or military campaign in the Taiwan Strait could halt shipments of chips, crippling manufacturers worldwide. This scenario has been called potentially “the mother of all supply chain disruptions.” It has galvanized efforts in the U.S. and Europe to invest in domestic semiconductor industries, such as through the CHIPS Act, but duplicating Taiwan’s capacity will take years. In the meantime, the risk of conflict in East Asia remains an overhang that keeps CEOs, national security planners, and supply chain management experts awake at night.
Moving to the Middle East, Iran is another state actor leveraging asymmetric tactics against supply lines. Subject to heavy Western sanctions, Tehran often seeks to pressure its adversaries by threatening global oil shipping. Iran’s forces and proxies have repeatedly targeted tankers and commercial ships in the Persian Gulf, Strait of Hormuz, and Red Sea. For instance, in 2019 Iran or its aligned militias carried out drone and mine attacks on tankers and struck Saudi Arabia’s Abqaiq oil processing facility—briefly taking out ~5% of world oil supply. More recently, as noted earlier, Iran’s naval units seized multiple vessels in 2023–2024, including the Aries container ship, ostensibly in retaliation for Israeli actions. Such actions have immediate impacts on insurance rates, freight costs, and the calculus of shipping companies operating in the region. Even threats to close the Strait of Hormuz—through which roughly 20% of global oil passes—can send energy prices spiking and force oil tankers to take longer routes.
Iran’s influence also extends through proxy groups that impact supply stability. In Yemen, the Iran-backed Houthi rebels have repeatedly attacked shipping in the Red Sea and launched missiles at Saudi oil facilities and airports. The Houthis have proven adept at maintaining their own supply lines for weapons and parts despite blockade efforts. Intelligence reports indicate smuggling networks through Oman have allowed Iran and even far-flung suppliers like China to funnel missile components and dual-use technology to the Houthi insurgency. These covert supply chains sustain the Houthis’ drone and missile program, which in turn threatens maritime and energy targets in the region. Disrupting these illicit pipelines is critical to countering Houthi influence and protecting global trade.
North Korea, though economically isolated, also poses niche supply chain threats. Pyongyang has a history of illicit procurement networks to obtain sanctioned technology and materials for its missile and nuclear programs, often using front companies and brokers in China or Southeast Asia. North Korea’s hackers present another vector: the regime’s cyber units like the Lazarus Group have conducted brazen heists of cryptocurrency exchanges and banks, generating funds to import goods it can’t get legitimately. There is concern that North Korea could use cyberattacks to disrupt others’ supply chains as well—for instance, targeting shipping companies’ IT systems or industrial control systems of South Korean firms. Recent developments also show North Korea becoming an exporter of risk: in late 2023, Pyongyang struck a deal with Moscow to supply artillery shells for the war in Ukraine, likely in exchange for Russian technical aid on missiles and satellites. This burgeoning partnership, marked by quid pro quo arms-for-technology exchanges, signals how sanctioned states can align to prop each other up.
Finally, it’s worth mentioning Russia in the nation-state mix. Russia’s invasion of Ukraine in 2022 set off massive supply chain ripples—from cutting off Ukrainian grain exports to upending Europe’s energy supply. Western sanctions on Moscow forced global companies to reconfigure supply lines for oil and metals, even as Russia turned to an underground network to procure restricted goods. In fact, Russia has leaned on fellow adversaries like China, Iran, and North Korea to bypass sanctions through alternative trade networks. Understanding this sanctions evasion economy is crucial. In the face of export controls, Russia’s imports of sensitive dual-use components from China surged by over 40% to $5.2 billion in 2023. Many of these Chinese components are integral to Russia’s defense industry—helping it build drones, missiles, and electronic warfare gear despite Western efforts to cut off such supplies. This example illustrates how great-power competition is increasingly fought through supply chains: by controlling or rerouting the flow of critical technologies.
Finally, it’s worth mentioning the conflict in Ukraine and its broader impact on global supply chains. The disruptions have been far-reaching—from limiting grain exports to reshaping energy markets across Europe. Export controls and economic sanctions have forced nations to reconfigure trade routes for essential commodities such as oil, metals, and advanced technology. In response, restricted economies have adapted by turning to alternative trade networks and deepening partnerships with states outside traditional Western financial systems. Understanding this evolving sanctions evasion economy is crucial. In the face of export controls, imports of sensitive dual-use components into certain regions surged by over 40% to $5.2 billion in 2023. Many of these components are critical for defense industries, supporting the continued production of drones, missiles, and electronic warfare systems despite efforts to restrict access. This example illustrates how modern conflicts are increasingly fought through supply chains, with control over critical technologies playing a decisive role in shaping global power dynamics.
Criminal Syndicates and Terrorist Threats to Supply Chain Risk Management
Not all threats come with a state flag attached. Transnational criminal organizations and terrorist groups pose potent threats to supply chain risk management strategies. Their motives may be profit or ideological destruction, but the effect is to inject risk and uncertainty into global flows of goods.
One of the clearest impacts comes from the realm of cargo theft and organized crime. In the United States and North America, cargo theft has skyrocketed to record levels. Thieves—often sophisticated gangs—target warehouses, trucks, rail cars, and containers carrying high-value merchandise. In 2024, reported cargo theft incidents in the U.S. and Canada jumped 27% from the prior year, reaching an all-time high of 3,625 cases with losses estimated at $454.9 million. Criminal groups have broadened their scope beyond electronics to steal food, pharmaceuticals, and even PPE, often reselling these goods on the black market. They have also grown more tech-savvy, using GPS jammers and leaked shipment data to pinpoint targets. This rise in cargo crime creates added costs for security and insurance and can disrupt manufacturing schedules when key components mysteriously vanish en route. Certain corridors have been especially hard-hit—California saw a 33% jump in cargo theft in 2024, and Texas 39%, together accounting for a large share of the nation’s stolen loads. The implication is that securing the supply chain against risk is not just about ports and factories, but also management during the “last mile” and at distribution hubs that criminals prey on.
Counterfeit goods and illicit trade are another pervasive concern tied to organized crime, often with tacit state backing. The trade in counterfeit and pirated products—from luxury handbags and electronics to pharmaceuticals and aircraft parts—has exploded alongside globalization. By 2023, counterfeit goods were estimated to account for 3.3% of global trade, and this share is projected to grow to 5% within the decade. These fakes aren’t just a trademark issue; they pose safety and national security risks when substandard counterfeit components infiltrate critical supply chains. For example, counterfeit microchips or fasteners can cause electronics to fail or aircraft engines to malfunction. Many counterfeit rings are run by transnational syndicates that use the same routes to smuggle drugs and weapons. The U.S. Department of Defense has uncovered instances of counterfeit electronics in military systems, prompting stricter supplier vetting and authentication requirements. Likewise, the opioid crisis has a supply chain dimension: Mexican cartels source precursor chemicals from China to synthesize fentanyl, then traffic the drugs through shipping and parcel services. These illicit supply chains piggyback on legitimate logistics networks, making detection and disruption a complex challenge.
Terrorist groups have long viewed transportation and infrastructure as high-value targets. Attacks on global supply chains by terrorists reached an all-time high around the mid-2010s, averaging over 3 attacks per week worldwide. The types of attack have varied—targeting oil pipelines and energy infrastructure, hijacking trucks, bombing ports or airports, and even using cargo shipments to smuggle bombs. Such attacks inflict considerable direct and indirect costs: beyond destroyed cargo and facilities, they disrupt the international movement of freight and create ripple effects of delay and uncertainty. Over the last decade, terrorists have struck supply chain targets in 58 countries, illustrating the global risk management challenges. Certain regions and routes have been hit particularly hard, such as from Colombian rebels repeatedly bombing oil pipelines, South Asian insurgent attacks on logistics convoys, and the persistent logistics threats throughout Middle East. Physical attacks like arson or bombings cause immediate disruptions, while tactics like extortion and kidnapping of logistics personnel create a climate of fear that hinders normal operations. In short, terrorism adds another layer of risk, especially in unstable regions where groups may seek to undermine governments by sabotaging supply lines.
It is important to note that many of these threats are interconnected. Terrorist and criminal networks often rely on illicit supply chains themselves—moving weapons, cash, or contraband—which means cracking down on those networks can enhance broader supply chain security. Likewise, state adversaries may enable or exploit criminal groups as proxies to do damage, such as Iran’s support to the Houthis or North Korea’s use of cybercriminals. This blurring of lines means supply chain risk managers must take a holistic view. Geopolitics, crime, and terrorism are not separate silos; they frequently overlap in the real world of global trade.
Strengthening Resilience: Supply Chain Risk Management Strategies and Policies
With risks to supply chains proliferating, both industry and governments have been pursuing strategies to bolster resilience. The United States government in particular has elevated supply chain security as a national priority, launching new policies, frameworks, and public-private initiatives to address vulnerabilities.
One landmark initiative was Executive Order 14017 “America’s Supply Chains”, issued in February 2021. This EO mandated a broad review of critical supply chains to identify choke points and risks. The subsequent 100-day interagency assessment in June 2021 found “structural weaknesses” in both domestic and international supply chains that threaten America’s economic and national security. While amplified by the pandemic, the review concluded that decades of offshoring, just-in-time manufacturing, and industry consolidation had hollowed out the U.S. industrial base, leaving it overly reliant on foreign, often adversarial, sources. Specifically, the review highlighted four product areas as most critical and vulnerable: semiconductors, large-capacity batteries, critical minerals, and pharmaceuticals. These are sectors where a severe disruption could be catastrophic, as seen during chip shortages, and where U.S. domestic capacity needs strengthening.
Following this review, the U.S. outlined a multi-pronged strategy to reinforce supply chain resilience. The U.S. pledged to invest in American manufacturing and “move the nation away from its reliance on adversaries—including China—for critical inputs.” This translated into major legislation and actions: the CHIPS and Science Act to boost domestic semiconductor production, the Inflation Reduction Act to catalyze U.S.-based battery and EV supply chains, and use of the Defense Production Act to shore up production of strategic materials like rare earth elements and pharmaceuticals. In addition to the 100-day review, year-long sectoral reviews were undertaken for areas like defense, public health, information and communication technology (ICT), energy, transportation, and food systems, with further recommendations delivered in 2022. Across the board, there’s a push to increase redundancy and diversity in supplier networks—for example, qualifying multiple sources for critical defense components, and rebuilding stockpiles for items like medical supplies and minerals.
In 2025, the Trump administration has taken significant steps to reinforce U.S. supply chain resilience and reduce dependence on foreign adversaries. One of the key initiatives involves securing access to critical minerals—essential for defense, technology, and energy sectors. These deals aims to diversify supply sources and reduce reliance on China. Additionally, the administration has prioritized reshoring pharmaceutical manufacturing, with Eli Lilly announcing a $27 billion investment to establish four manufacturing mega-sites in the U.S. in response to potential tariffs on imported pharmaceuticals. This move is designed to strengthen domestic production of essential medications and decrease reliance on international supply chains, particularly those tied to China. These efforts signal a strategic shift toward securing critical resources, strengthening industrial capacity, and ensuring greater resilience in U.S. supply chains.
Government agencies have also enhanced coordination with the private sector on supply chain threat intelligence and risk management best practices. The National Counterintelligence and Security Center (NCSC) has prioritized outreach on supply chain threats, emphasizing that securing supply chains for critical technologies is vital to U.S. security. Through its annual “National Supply Chain Integrity Month” campaigns, NCSC underscores the need to integrate Acquisition, Cyber, and Enterprise (A.C.E.) security into SCRM programs. This means companies and agencies must collaborate across procurement, IT security, and corporate security disciplines to guard against adversarial exploits. Similarly, the Cybersecurity and Infrastructure Security Agency (CISA) established an ICT Supply Chain Risk Management Task Force—a public-private partnership focused on identifying vulnerabilities in the information and communications technology supply chain and developing mitigation strategies. Such efforts have produced guidance on vetting suppliers, sharing threat reports, and improving transparency, to include encouraging the use of Software Bills of Materials to track software components.
On the corporate side, companies are investing heavily in supply chain visibility and risk analytics. A key lesson from recent disruptions is that you can’t mitigate what you can’t see. Thus, firms are leveraging technology to map their entire supplier network down to lower tiers and to monitor risks in real time. The use of AI-driven platforms and data feeds has become common to detect early warning signs of trouble. Many companies now have “control tower” dashboards to track such alerts and coordinate response. By having visibility into which suppliers and sub-suppliers are in an affected region, businesses can quickly assess impact and switch to backup options when a crisis hits. Moreover, scenario planning and stress-testing supply chains for various “what if” situations, such as a sudden loss of a key supplier or transport route, are increasingly part of the playbook.
Strategically, there’s a movement toward reducing single points of failure in supply chains. This involves steps like dual sourcing of critical components, holding more safety stock of inventory, and even redesigning products to use more readily available materials. The old model of extreme just-in-time, while efficient, proved brittle in the face of disruption. Now, continuity of supply is being weighted more heavily alongside cost and efficiency. In some cases, companies are bringing production closer to home. This trend of “nearshoring” or “ally-shoring” has seen manufacturers shift certain production or sourcing from East Asia to locations in the U.S., Mexico, or Eastern Europe, to shorten supply lines and avoid geopolitically risky nodes. Diversification is another theme: instead of relying on one country such as China for 80% of a component, firms are aiming for a more balanced supplier mix across different regions. While such changes can increase short-term costs, they provide insurance against future shocks.
There is also greater attention to supplier due diligence and security. Companies that supply the U.S. government—especially in defense or critical infrastructure—face stringent new rules for supply chain security. Federal acquisition regulations now ban certain Chinese-made equipment and mandate disclosure of supply chain risks. For instance, the 2019 NDAA Section 889 prohibits federal contractors from using telecommunications gear from Huawei, ZTE, and other Chinese firms deemed security threats. The Department of Defense has its own supply chain risk management programs to vet suppliers of mission-critical systems, aiming to eliminate counterfeit or malicious components. Initiatives like the Cybersecurity Maturity Model Certification (CMMC) also require defense contractors to implement controls for managing their sub-suppliers’ cyber hygiene. The overall intent is clear: exclude high-risk vendors and ensure trusted sources for the most sensitive supply chains, even if it means paying a bit more or consolidating supplier bases to those who pass security muster.
International cooperation is another piece of the resilience puzzle. Given that supply chains are global, the U.S. is working closely with allies and partners to secure shared critical supply lines. The Quad—U.S., Japan, India, Australia—has a working group on supply chain resilience focusing on semiconductors and rare earths. The G7 launched a “Supply Chain Partnership” in 2022 to coordinate policies and identify choke points in areas like minerals and batteries. The U.S. and EU, through the Trade and Technology Council, are collaborating on semiconductor supply diversification and setting early warning systems for disruptions. Allies such as Japan, Australia, and EU states have aligned with U.S. export controls on technology to adversaries, while also investing in alternative sources, such as Australia ramping up rare earth mining to offset China. This collective action approach reflects a doctrine of “collective resilience,” leveraging allied strengths to ensure no critical supply is solely dependent on a potential adversary.
Despite these advances, building truly resilient supply chains is an ongoing endeavor. The Defense Science Board has identified threats to global supply chains as one of the “new dimensions of conflict” in modern competition—underscoring that supply chain security is now tantamount to national security. That means both governments and industries must remain proactive. Scanning for emerging risks from new geopolitical flare-ups to novel cyber threats, continuously updating contingency plans, and investing in infrastructure—to include ports, manufacturing, and digital systems—that can withstand shocks are all essential. In essence, resilience is not a one-time project but a continuous posture.
Conclusion
In an era marked by pandemics and wars, supply chain risk management has moved from the back-office to the boardroom—and even to the situation room. The incidents of 2024–2025 highlight that threats can emerge with little warning from myriad sources—a factory fire, a software hack, a trade dispute, or a rogue drone strike. Yet they also underscore that proactive risk management and strategic foresight can mitigate the damage. Organizations that invested in mapping their supplier networks and developing backup plans were able to pivot faster during the Red Sea crisis or China’s export ban, for example. Those that failed to diversify or monitor risk indicators faced harsher outcomes.
Ultimately, resilience is the watchword. Building resilience means accepting some redundancy and upfront costs in exchange for the ability to absorb shocks. It also means staying informed: fusing intelligence about geopolitical developments, weather threats, and cyber vulnerabilities into supply chain planning. Leading companies are now doing just that—even running war-game simulations of disruption scenarios to test their responses. This kind of rigorous, analytical approach, treating supply chain risk as a strategic imperative, increasingly separates the leaders from the laggards.
From a national perspective, the United States and its allies are recognizing that secure supply chains are as fundamental to security as military strength. Modern defense strategy not only plans for battles, but also for sustaining the flow of microchips, fuel, and raw materials that power advanced weapons. A breakdown in the supply chain is a strategic vulnerability. Thus, recent national security doctrines emphasize securing our supply lines alongside traditional defense measures. It’s a paradigm shift: economic security and national security have fully converged in the supply chain domain.
The road ahead will likely see greater alignment between government and industry on supply chain resilience. We can expect more information sharing—such as intelligence agencies warning companies of emerging threats to key suppliers—and joint efforts to bolster capacity in critical sectors. Governments may create incentives or safeguards, such as strategic stockpiles or surge manufacturing capabilities, for emergencies. Technology will also play a role, with AI and blockchain helping to predict disruptions and verify the integrity of products.
While we cannot eliminate all risks in a complex global supply web, we can manage and mitigate those risks far better than before. A comprehensive, forward-looking approach to supply chain risk management—one informed by lessons of past crises and vigilant about emerging threats—will be indispensable for both businesses and governments. Those that get it right will not only avoid catastrophe but even gain a competitive edge through agility and trustworthiness. In a world full of disruptions, resilience is the ultimate supply chain currency.
