A recent post from DHL’s Supply Chain Matters magazine provides key advice for superior logistics management: embrace disruption and be resilient. In today’s world where global supply chains are increasingly efficient (read: little excess capacity, no room for error), risk management strategies must be as flexible and efficient as the supply chain itself.

Let’s take a closer look.

Even the smallest companies today are delivering products to global audiences, sourcing materials internationally, or considering both. In this environment, with supply chains stretched to the limit, businesses are more exposed to volatility in the marketplace, and the ravages of natural disasters, among other disruptions. To compete and thrive, companies must adapt.

How are they adapting? Some companies that use distribution networks are arranging to ship their products directly to consumers in the event of a disruption between the point of production and the distributors. Others are building flexibility into the supply chain in other ways, by arranging to scale capacity up and down rapidly as market conditions change, for instance. The bottom line is that resilience must be integrated into the supply chain at every point.

The World Economic Forum’s (WEF) Supply Chain Risk Initiative has conducted an exhaustive account of recent economic disruptions and natural disasters and their impact on global supply chains. From armed conflicts, droughts and floods to damaging cyber-intrusions, regional and company-specific events have a global impact, given the interconnectedness of the world economy. To implement effective risk management strategies on a broad scale, the WEF is bringing together logistics leaders to develop recommendations, advocate for international standards, and incentivize organizations to imbed flexibility into their supply chains.

Research suggests that attention to supply chain risk management can significantly improve profitability. According to a report from Accenture, risk management has moved up the priority ladder in recent years, and can now be considered on par with other key supply chain concerns, including cost, service, inventories and sustainability. The survey of 1,000 senior executives, mostly from large global companies, found more than half of executives said their companies were increasing investments in supply chain management by up to 20 percent or more.

So, how can your organization achieve the kind of adaptability and resilience that many companies are prioritizing? How can your company compete? Consider the following:

It starts at the top: At the very highest levels, management needs to embrace the idea that risk management is central to success, and invest in strategies to make the supply chain flexible.

Communication is key: Transparency and communication between departments within your company and all along the supply chain is critical.

Know your shipping partner: Resources to help improve your supply chain are readily available, and your shipping partner should be able to help. Make sure to find out what strategies and tools your logistics provider offers. For instance, DHL Express hosts a wealth of information in its Shipping Support Center.

Is your company prepared for any major supply chain disruptions? Let us know.