Risk-management initiatives are so important that the C-suite must reassess and rebuild agile, resilient supply chains, says Lisa Morales-Hellebo, founder and managing general partner of Refashiond Ventures.

Risk in the supply chain is not unlike the possibility of someone upsetting the board game you’re playing and scattering the pieces. Unlike a game, however, supply chain risk is an everyday threat. “When it occurs, you have to reset the stage and figure out all the moving parts all over again,” says Morales-Hellebo.

The laundry list of risk is quite long: climate crisis, severe weather patterns, war, political instability, terrorist attacks on shipping, human error, and on and on. “If you're not planning for it, your company is not going to have any product to sell,” she says. “And I like to tell people reshoring can help to mitigate that risk, but if you're not looking at your end-to-end value chain and you're only looking at conversion of your finished goods, you still have risk. You need to have a localized infrastructure to mitigate that risk.” 

To prepare for the possibility of disruption, it’s critical to invest “first and foremost” in data and transparency. “You can't manage anything you aren't measuring, and you can't measure it if you don't have data behind it,” Morales-Hellebo says. Yet it's difficult across complex globalized value chains to get true data transparency. “That’s another reason to try to localize or regionalize your supply chain infrastructure. It's a lot easier to get visibility on a localized, constrained set of partners than it is the globalized billion nodes of our current value chain.”

Artificial intelligence plays a role, Morales-Hellebo says. AI isn’t here to take jobs but to augment a company’s capabilities, to quantify data and give valuable insights. “So start with your transparency, and then layer on agility, resiliency and redundancy.”