An insurance company official warns that many businesses fail to plan for one of the largest — and growing — threats to their supply chains: the weather.
Nick Wildgoose, the manager of global supply chain product at Zurich Insurance Group, told The Wall Street Journal that companies all too frequently lack an understanding of how catastrophic weather or other natural disasters could impact their major suppliers.
His comments came after Zurich and the Business Continuity Institute found a nearly 30 percent increase in weather-related supply chain disruptions since 2012. Despite the increasing threat, he noted that many businesses are instead putting pressure on staff to cut costs.
"A lot of them use Excel but that may not be the best way of monitoring your supply chain network and being able to overlay weather events," Wildgoose said of current company strategies.
Wildgoose predicted that data analytics could become particularly important by allowing companies to evaluate the probability of extreme weather striking important facilities — and plan accordingly.
That knowledge, for example, could allow companies with too much at risk in one location to adjust their supplies.
And those that don't take advantage of new technology, he warned, run the risk that their more prepared competitors gain an advantage in the wake of a storm.
"It surprises me because it’s not too expensive to start to look at that,” Wildgoose said of contingency weather planning. “It’s a fairly inexpensive data source."