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Securing utilities supply chains: Why visibility and resilience matter

Exploring the critical need for visibility and resilience in utility supply chains, highlighting vulnerabilities, challenges, and strategies for improvement.

The utilities sector relies heavily on interconnected supply systems for efficient and secure delivery of essential services like electricity, water, and gas. However, geopolitical tensions, cyberattacks, extreme weather events, and workforce shortages reveal critical supply chain vulnerabilities.^[1] As highlighted in the UK Utilities Risk Report 2025, supply chain concerns are increasingly front of mind for utility companies.

The recent fire at Heathrow Airport’s electrical substation revealed vulnerabilities in the power supply, highlighting the importance of uninterrupted utility provision for the supply chains that support much of the UK’s infrastructure.^[2] With so many factors at play, utility companies face pressure to reassure customers that they are in safe hands.

Key challenges in achieving visibility

End-to-end visibility across supply chains can be challenging for many businesses, making it difficult to predict and prevent potential disruptions.

Traditional approaches to managing supply chain risk depend on immediate suppliers sharing information about their own supply chains. However, this method relies on their capability and willingness to hand over that data. Some businesses may be reluctant to share information that could reveal weaknesses in their supply chains.

Fragmented supplier networks can also hamper end-to-end visibility efforts, complicating tracking and monitoring.

Consequences of poor visibility may include:

Inability to identify disruption risks before they occur, leaving businesses with minimal time to respond.
Increased operational costs due to reactive measures rather than proactive preparedness.
Shortage of key components which can often hold up entire processes.
Regulatory fines resulting from supply chain failures.
Delays or cost increases in capital infrastructure projects, leading to additional costs.

Investing in an AI-powered approach to mapping supply chains, such as Marsh McLennan’s Sentrisk™, can help. This innovative solution uses the company’s 150-plus years of risk expertise to empower companies to take control by predicting risks and preparing solutions in advance.

Supply chain failures: One of society’s greatest threats

While supply chain disruptions can affect businesses in almost any industry, the consequences can be catastrophic for utility companies. A single disruption can lead to societal havoc, jeopardizing essential public services and causing untold economic damage with repercussions stretching far and wide.

Potential causes of disruption include:

Extreme weather events that damage supply routes and delay equipment deliveries.
Cyberattacks targeting third-party vendors and derailing vital operations.
Geopolitics, trade wars, and tariffs that create regulatory hurdles, sourcing changes, and re-routing.
Financial instability leading to supplier insolvencies and increased import/export costs.
Concentration risks from sourcing supplies from a limited number of locations, making multiple suppliers vulnerable to the same disruption.
Bottlenecks, such as transformer shortages, which can impact entire industries.^[3]
Port disruptions that halt production lines and increase costs as businesses seek alternative transport methods.
Traditional perils, such as fires and floods, that can destroy facilities and disrupt access routes.

Short- and long-term impacts of disruption:

Harm to civilians, particularly vulnerable populations, due to food and fuel shortages.
Financial and reputational damage that erodes trust and affects profits.
Unplanned downtime can result in higher costs and regulatory penalties.
Customer disengagement, making it difficult to regain trust in timely service delivery.
Costs associated with replacing damaged physical assets.
Expenses related to reconfiguring supply chains and finding new suppliers.

Regulators are intensifying their scrutiny of supply chain resilience, with compliance pressures increasing as a result.^[4]

A recent report by Oliver Wyman highlights that companies adopting a proactive, multi-tiered approach to supply chain visibility, scenario planning, and risk diversification are better positioned to withstand disruptions, strengthen operational resilience, and protect financial performance during crises. Embedding these practices is no longer optional, but critical for maintaining business continuity and public trust.^[5]

Strengthening resilience in challenging conditions

Utilities must proactively build supply chain resilience. According to the Economist Impact’s “Trade in Transition 2024” project, 97% of surveyed companies are reconfiguring their supply chains, a 5% increase from the previous year. This trend underscores the need to reassess traditional approaches.^[6]

Utility companies should focus on key areas to enhance their supply chain resilience:

Enhance end-to-end visibility by investing in real-time monitoring systems and implementing predictive analytics.
Conduct risk assessments to understand and evaluate the impact of potential disruptions.
Design mitigation strategies by simulating different scenarios, such as stockpiling holdings or adopting flexible logistics networks, and modelling their impact.
Diversify suppliers to increase flexibility in the event of problems.
Incorporate risk management into procurement strategies, including business continuity plans and regular risk assessments of suppliers.
Consider sourcing hotspots, such as suppliers in geographical areas with more inherent risk.

Strategic support for utilities

The utilities sector faces rapidly increasing and recurring challenges. By adopting key measures now, they can emerge stronger and more resilient.

Marsh McLennan offers comprehensive support to help utility companies address supply chain issues and build long-term resilience. Our services include:

Sentrisk™, an AI-powered platform that empowers companies to manage supply chain risk.
Scenario planning to assess exposure and stress-test operations.
Infrastructure resilience assessments to identify vulnerabilities and investment needs.
Contingency planning to minimise downtime during disruptions.
Supply chain risk management strategies to enable continuity amid disruptions.
Risk intelligence to evaluate vendor stability.
Insurance protection to mitigate risks and lost revenue.

_{¹ WEF Global Cybersecurity Outlook 2025 report addresses geopolitical tensions, emerging threats to boost resilience - Industrial Cyber}

_{² Heathrow Airport Closure: The Supply Chain Impact | Supply Chain Magazine}

_{³ Tariffs Will Worsen Transformer Shortage, Slowing Power Projects}

_{⁴ UK Utilities Risk Report 2025 | Marsh}

_{⁵ Keys to improving supply chain risk and resilience.pdf}

_{⁶ Supply chain resilience | Deloitte Insights}

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