Improving supply chain resilience through actionable insights

Experts from across Marsh McLennan recently explored how businesses can strengthen supply chain resilience for long-term success.

For insights from the webcast, see a summary of the discussion and the replay below.

Why are supply chains increasingly vulnerable?

Organisations face an unprecedented level of supply chain risk, with 65% describing themselves as vulnerable or very vulnerable to future risks, according to an Oliver Wyman survey. This vulnerability stems from supply chains having developed in a relatively stable risk environment that is now changing dramatically. Disruptions such as tariffs, geopolitical risks, cyber threats, and climate-related events create volatility that complicates supply chain and investment planning. To survive and thrive, businesses increasingly recognise the importance of moving from a reactive approach to a resilient one.

Amid this uncertainty, business leaders and risk managers can seize the moment to reassess their investments and strategically allocate resources toward building the capabilities that will fortify their operations against the next major disruption. According to the same Oliver Wyman survey, there is a strong consensus for this among business leaders, with 98% willing to invest profits into supply chain resilience.

However, this resilience focus sometimes conflicts with cost reduction priorities. Budgets for managing supply chain risks increased significantly in 2024 but showed signs of plateauing in 2025, raising concerns about sustained commitment. The complexity of supply chains, including multiple tiers of suppliers, and the evolving political risk landscape, including tariffs and geopolitical shifts, make visibility and proactive management essential.

How is supply chain uncertainty impacting businesses?

Supply chain uncertainty is impacting operations, investment outlooks, and workforce planning. For example:

Tariff policies can be unpredictable, causing uncertainty in cost structures and supply routes.
Cyberattacks on manufacturers can halt production and affect suppliers across multiple tiers, highlighting the interconnectedness and fragility of supply chains.
Inflationary pressures on consumers have been less severe than expected, but the broader economic impact remains significant.
Insurance premiums have generally increased due to factors such as geopolitical tensions, climate change events, and labor shortages — which have more frequently disrupted supply chains and contributed toward higher costs for insurers and insureds. Businesses can potentially mitigate some of these rising costs by improving their supply chain risk management.

How can proactive supply chain risk management help?

The future of supply chain resilience will likely involve increased adaptation and nimbleness. Companies that can adjust their supply chains proactively are likely to gain advantages through increased resilience, potential cost reductions, improved decision-making, stronger supplier relationships, and enhanced customer satisfaction.

Generally, companies in the US are increasingly transitioning from cost-optimised to resilience-optimised supply chain models, where the focus is shifting from short-term cost reduction to long-term adaptability and risk management. This includes strategies like diversifying suppliers, increasing inventory buffers, nearshoring, and adopting flexible logistics. This shift has been driven in part by businesses experiencing frequent policy shifts, with tariff strategies that seem permanent but that can be abruptly reversed, complicating supply chain and investment planning.

For example, one goal of the recent changes in US tariff policies is to revive domestic production. However, with near full employment and challenges in obtaining skilled labour visas, it remains unclear who will fill these jobs, how long they will be permitted to stay, and at what cost. Labourers from third countries brought in to build factories face similar visa uncertainties, putting new construction investments at risk. Furthermore, diversifying sourcing is more challenging because new sourcing countries may also become subject to tariffs unexpectedly.

Although inflationary impacts on US consumers have been less severe than expected so far, the full pricing effects of tariffs on raw materials may take months or even a year to materialise at the retail and consumer level. “You're talking about tariffs impacting raw materials way up a supply chain…By the time they ultimately hit a shelf in a store, you're talking months, if not potentially a year later,” noted one speaker.

What supply chain resilience strategies can help manage uncertainties?

Boosting supply chain resilience may include:

Building compliance capabilities: The US government has signalled its intent to focus more on customs management, sanctions compliance, and tariff evasion enforcement, which will require businesses to build compliance capabilities, including monitoring and compliance teams.
Risk transfer: Some risks cannot be fully mitigated and benefit from insurance solutions, such as business interruption policies, trade credit insurance, and parametric solutions.
Automation, robotics, and artificial intelligence: Digital tools are expected to complement rather than replace human labour, though many companies are still navigating this complex transition.
Advanced data: Businesses will need to use advanced data analytics to understand supplier networks, model potential disruptions, and prioritise risk mitigation efforts. Using tools, such as Sentrisk, can help companies gain visibility into multiple tiers of suppliers, enabling them to identify vulnerabilities and model the potential impacts of disruptions. This granular insight can help secure better insurance coverage and inform risk mitigation strategies.
Scenario planning and risk modelling: Planning exercises can yield valuable insights into potential future risk scenarios, enabling organisations to make more confident strategic decisions and understand pricing impacts.
Prioritise resilience: Recognise that resilience is a top board-level concern.

Overall, resilience will equate to optionality — the ability to pivot quickly in response to disruptions will be a key determinant of success.

Speakers on the webinar:

Jeff Bray, Head of Global Risk Management, Prologis
James Crask, Global Head of Multinational Clients, Marsh Advisory
John Davies, Commercial Director for Sentrisk, Marsh McLennan
Greg Mann, US Property Practice Leader, Marsh
Dan Tannebaum, Partner, Global Anti-Financial Crime Practice Leader, Oliver Wyman

Moderator: Lorraine Stack, Risk Management Leader, Europe, Marsh