The impact of climate change on the global supply chain has caused disturbances with the demand and supply of international economic productions. The ongoing COVID-19 pandemic has made the entire world come to a standstill. On top of this, the acute weather conditions have also severely affected the global supply chain. The supply chain shed risk insights 2020 have also considered climate change and bad weather threatening the global supply chain. In severe lousy weather conditions, the supply chain has to prepare accordingly to maintain stability and continuity.
The Impact of Climate/ Weather channel conditions on the Global Supply Chain
Lousy weather conditions unarguably have a severe impact on the global supply chain. Bad weather conditions include natural disasters, hurricanes, heavy rain, and drought. The companies evaluate their supply chain that consists of the risks associated with natural disasters and bad weather conditions. A country needs to be resilient and recover faster to match its steps in the global supply chain market.
Bad weather wreaks havoc on the supply chain. The companies have to deal with a shortage of production, destruction, and impairment of the infrastructure and increased vulnerability for loot and theft. Apart from this, the continuation of bad weather conditions will impact the tax natural disasters resilience, which will eventually lead to medium long-term reassemble of the supply chain.
The unfavorable weather conditions have led to the shortage of labor and scarcity of the raw materials required to maintain the stability and continuity of the global supply chain. The change in climate and the increase in the severity of the climatic conditions has significantly increased the risks to the worldwide supply chain, which hampers production, leads to inflation, interferes with the revenue of the corporations, leads to the shortage of consumers.
Companies that are entirely dependent upon natural resources face severe loss and have to shut down, and even the production and access of critical inputs get disrupted. There becomes a downstream of production, thereby leading to a potential increase in the prices of the commodities by the manufacturers to compensate for their losses.
The three types of a supply chain affected by bad weather conditions are the specialty, intermediate, and commodity supply chains. The specialty supply chain includes the companies dealing semiconductors, the intermediate supply chain with natural rare earth metals. Both these global supply chains have critical inputs on many advanced industries around the world.
The semiconductors are the most used items in electronics industries, right from computers, smartphones to smartwatches. The rare earth metals are used in aerospace, vehicles, defense drones, wind turbines, medical appliances, and many other electrical appliances. Both these supply chains are affected by the climatic conditions as they are excavated from those geographical locations that face most of the climatic disasters.
A hurricane or rainfall more than expected severely disrupts the supply chain. Hurricanes can lead to months of loss of production and lead to loss of revenue for the global supply chain markets. Heavy rainfall alone is sufficient to trigger the loss of mining industries. These bad weather conditions can affect the global production of goods and commodities by around 20 percent.
The global supply chain is affected by bad weather conditions, and the risks increase with the production of the global supply chain. Recent reports have suggested that bad weather conditions like floods, storms, hurricanes have disrupted the supply chain, as a result of which there has been a decrease in the production and the nations and the companies going under loss of revenue with hardly making any profits.
A result of bad weather conditions has made the global supply chain vulnerable. The companies have been trying hard to maintain the losses resulting from bad weather conditions. It has become a major concern for the global supply chain. Any nation’s economic growth depends on the global supply chain; with its disruption due to the bad weather conditions, it comes to a standstill.
For nations unprepared to face bad weather conditions, the supply chain disruption causes cascading of the production. They may have no other alternative available to keep the supply chain going. Those nations who are well prepared to face any kind of bad weather conditions get back on their feet within no time post facing natural disasters.
Conclusion
Bad weather has become a concern for a stressed global supply chain. The global supply chain and its infrastructure should be designed in such a way that it can withstand any change in climatic conditions. The supply managers of the supply chain should identify the suppliers and check what level of preparation is made to face bad weather conditions.
