Can Supply Chains Take the Strain of Climate Change?

As Thailand’s 2011 flooding shows, it only takes one natural disaster to completely cripple a business or even an industry. With the Intergovernmental Panel on Climate Change predicting that such disasters will only increase in frequency, supply chains need to start thinking smarter about how to withstand nature’s wrath. Sian Harris writes a lengthy article for E&T Magazine about what we can do to stay one step ahead of severe weather.

Straining for Change

First, it must be understood that climate change can modify or amplify existing risks, and that needs to be factored into risk assessment. Businesses need to collect as much information as possible to this end. For instance, Harris cites that we need to figure out how to quantify food security. A global damage transfer model called Acclimate is in development to “capture the indirect effects of climate extremes on the global supply network. What, for example, happens to associated production, material storage and transportation, if a factory is destroyed?”

Meanwhile, the Eora MRIO (multi-region input output) hopes to map out the structure of the entire world economy, which is obviously no easy task. It tracks resources and environmental impacts related to international trade flows, and it is gaining more useful data all the time. For a much more in-depth discussion of the topics found here, you can read Harris’s full article: http://eandt.theiet.org/magazine/2014/05/supply-chains-under-strain.cfm

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