As a growing number of so-called “black swan” events continue to disrupt global trade flows, companies are increasingly moving away from traditional just-in-time inventory strategies in favour of more resilient supply chain models.
Industry specialists say corporations are now allocating greater resources to strengthening global supply chains in response to shifting health policies, trade disruptions and geopolitical instability, which many expect to occur with increasing frequency.
Recent policy signals, including the Trump administration’s May 1 threat to impose a 25% tariff on European vehicles, alongside earlier developments such as the February outbreak of war involving Iran and an April proclamation affecting aluminum and copper imports, are reinforcing the sense of sustained volatility. Bain & Company partner Dheera Anand noted that businesses must now prepare for recurring shocks rather than isolated crises.
“This isn’t one and done. This is the world we live in. And I don’t see it settling down anytime soon,” said Christopher McCarney, U.S. principal for supply chain and operations at KPMG. “There’s always going to be another event, and the best time to modernize is right now.”
The shift is reflected in corporate governance structures. A KPMG survey published on May 1 found that most companies now hold regular C-suite meetings dedicated specifically to supply chain risk, while 73% plan to undertake a full transformation of their supply chain operating models within the next 36 months. Risk management and resilience building were identified as key priorities.
Companies are also increasingly willing to absorb higher costs in exchange for greater stability across their supply chains.
“There’s a willingness to pay for resilience,” McCarney added.
Risk responsibility is also becoming more distributed across organisations. Lisa M. Ellram, a supply chain specialist at Miami University, said companies are now relying more heavily on front-line teams to detect early warning signals of disruption.
“There’s a joint responsibility for risk management throughout the company,” she said. “The people who are more on the front lines… are the ones who potentially get the early warnings that will allow companies to respond more quickly.”
Sumit Dutta, U.S. principal of supply chain and operations at Ernst & Young, added that CFOs are increasingly working directly with supply chain leadership to better understand the financial exposure created by disruption.
The broader shift reflects a fundamental redefinition of supply chain priorities. Before the COVID-19 pandemic, many companies focused heavily on cost efficiency, often through lean, just-in-time inventory systems. However, the pandemic exposed the fragility of these models as well as the lack of buffers to absorb systemic shocks.
“You took one block out and everything came falling down because there wasn’t enough risk mitigation, resilience, or agility built into supply chains,” Anand explained. “The trifecta of cost, cash and service has now become a four-legged stool of cost, cash, service and resilience.”
Despite the renewed emphasis on resilience, just-in-time principles have not disappeared entirely. Instead, companies are applying them more selectively, depending on supply stability and risk exposure.
“I think companies now recognize that they have to look at cost in sync with how resilient their supply chain is to all these stresses,” Dutta said. “Cost has not gone out of the picture. But now people understand it is cost along with resiliency, agility, and sustainability.”
Jeannette Song, professor at Duke University’s Fuqua School of Business, echoed this more balanced approach, noting that just-in-time strategies still have a role but must be applied selectively. “It still cuts your cost, but you only apply it to things that have a relatively stable supply,” she said.
Overall, experts agree that supply chain strategy is no longer defined by a single objective. Instead, companies are operating in a more nuanced environment where cost efficiency, service levels, agility and resilience must now be balanced simultaneously, with no one-size-fits-all model applicable across global operations.
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