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17 short, practical answers to the questions supply chain teams ask most. Search, filter by topic, and share a link to any answer.
Disruption and shocks
Is it a shock or a shift?
Decide this first: it determines what kind of help fits.
A shock changes your costs, cash or deliveries within weeks: a closed route, a new tariff, a supplier in trouble. A shift unfolds over years: energy transition, new regulation, changing skills. Shocks call for a restructuring conversation; shifts call for foresight.
Some situations are both, such as a tariff that forces a relocation decision. Deal with the shock first, then make the long-lived decision with foresight.
- Write the pressure down in one sentence.
- Ask: will it change costs, cash or deliveries within weeks?
- If yes, treat it as a shock. If not, treat it as a shift and give it a decision date.
Five first moves in any disruption
A short list that works for almost any disruption.
Disruptions differ, but the first moves rarely do. Take them in this order: the first two show what is exposed, the third shows how long you have, and the last two turn that into a plan.
- List your single-source parts and suppliers.
- Check which customers depend on them.
- Know your cash runway if deliveries slip.
- Name one alternative route or supplier per critical item.
- Agree who decides, and by when.
What should we do in the first 72 hours of a supplier failure?
Get the facts, protect customers and cash, then choose between options.
The first three days decide whether a disruption stays a problem or becomes a crisis. Resist the urge to switch suppliers straight away. First get the facts, then protect customers and cash, then decide between real options.
- Hours 0 to 4: confirm the facts in writing and count stock on hand, in transit and at the supplier.
- Day 1: list affected orders, agree allocation rules and tell key customers what you know.
- Days 2 to 3: price your options, check contract clauses and decide with a small group.
Supply is short. Which customers do we serve first?
Agree allocation rules before they get made up on the spot.
When supply is short, every customer is urgent. Without rules, stock goes to whoever pushes hardest, which damages trust and margins. Agree simple rules, apply them consistently and explain them.
- Rank demand: safety-critical or essential uses first, then contractual commitments, then strategic customers, then margin.
- Let one person or a small group own allocation decisions.
- Tell customers what they will get and when, and review the rules every week.
Suppliers and sourcing
Ask the question behind the question
The better question usually points to the cheaper answer.
Before "how do we cut cost?", ask "which link would hurt most if it broke?". Before "what will happen?", ask "which futures would change our choices?". The better question usually points to the cheaper answer.
- Before cutting cost, list the three links that would hurt most if they broke.
- Before forecasting, name the futures that would change your choices.
When is dual sourcing worth the cost?
When an outage would cost more than the second source.
A second source costs money: qualification, smaller volume discounts and more management time. It pays off when the cost of an outage, weighed by how likely it is, is higher than that. Often a cheaper middle way exists.
- Start with items that are high impact and slow to requalify.
- Consider a qualified but dormant second source: approved, tested and given a small order each year.
- Compare it with a strategic buffer stock, which can be cheaper for low-volume items.
What should a supplier risk conversation cover?
Six topics that surface trouble early.
Good supplier relationships make risk conversations easier, not harder. Frame it as joint planning, and agree the early-warning signals both sides will share.
- Capacity and how much of it is in use
- Their own critical inputs and sub-suppliers
- Financial health and payment pressure
- Continuity plans and recovery times
- Lead times and notice periods for changes
- Early-warning triggers, and who calls whom
Inventory and cash
How much safety stock is enough?
Enough to cover variability, for the items that matter.
Safety stock protects you against two things: demand that varies and lead times that vary. The more of either, and the higher the service level you want, the more stock you need.
A common formula is: safety stock = z × √(average lead time × demand variance + average demand² × lead-time variance). Here z reflects your target service level: about 1.65 for 95%.
- Set safety stock per item, not as a blanket number of weeks.
- Use high service levels only for critical items.
- Recalculate when lead times change: a longer, less reliable route needs more buffer.
How do we protect cash when deliveries slip?
Know your runway, then act on both income and costs.
When deliveries slip, income often drops before costs do. Knowing how many weeks of cash you have turns a vague worry into a clear deadline.
- Calculate your runway for a realistic disruption length.
- Pause or defer the costs you can, starting with discretionary spend.
- Talk early to lenders, key suppliers and major customers about terms.
- Turn slow-moving stock into cash where you can.
Trade and tariffs
A new tariff hits one of our inputs. What now?
Check the facts, then model before you move.
A tariff is a shock to cost, but moving supply is a long-lived decision. First establish the real impact, then decide whether to absorb it, pass it on or re-source. Check classification and origin rules with a customs adviser: they decide what you actually pay.
- Confirm the tariff code and origin of the affected items.
- Calculate the landed-cost impact per product, not just per part.
- Check contracts for price adjustment or pass-through clauses.
- Compare alternative origins, including requalification time and their own tariff risk.
Should we nearshore or reshore?
A shift question: compare total cost across several futures.
Unit price rarely tells the full story. Total landed cost includes freight, duties, stock in transit, lead time, quality and the cost of disruption. And because a new site or supplier base lasts many years, the decision should hold up in more than one future.
- Compare total landed cost, not unit price.
- Put a value on shorter lead times: less stock and faster response.
- Test the choice against three or four plausible futures for energy, trade and skills.
Long-term shifts and foresight
Which long-term shifts should a supply chain team watch?
Six shifts that are reshaping supply networks.
No team can track everything. These six shifts affect most supply chains. Pick the two or three most relevant to your decisions and watch them closely.
- Energy transition and carbon pricing, including carbon border measures
- Due diligence and traceability rules on human rights, deforestation and emissions
- Physical climate risk: heat, floods and drought affecting sites and routes
- Trade blocs, tariffs and export controls
- Automation, robotics and AI in planning and warehousing
- Ageing workforces and skills shortages
What is a foresight scan, and when does it help?
A structured look at several futures to test one decision.
A foresight scan does not predict the future. It maps the forces that could shape it, sketches several plausible futures and tests one decision against them. It helps most when a decision is long-lived, such as a site, a network design or a multi-year contract, and the outlook is uncertain.
- The main drivers of change for your decision
- Three or four plausible futures
- Signposts that show which future is unfolding
- Options that hold up across those futures
How do we use scenarios without getting lost in them?
Tie them to one decision and a few signposts.
Scenarios fail when they become interesting stories with no link to a decision. Keep them tied to a choice you must make, and to signals you can watch.
- Start from one decision, not from the whole world.
- Use three or four scenarios, no more.
- Look for no-regret moves that work in all of them.
- Pick signposts and review them every quarter.
Nonprofits and humanitarian supply chains
How can a nonprofit build supply chain resilience on a tight budget?
Focus on the few items that matter most to the people you serve.
Resilience does not need a big budget. It needs a clear view of which items matter most to the people you serve, and agreements in place before you need them.
- List the ten items your programmes cannot run without.
- Set up framework agreements with pre-agreed prices and lead times.
- Explore pooled procurement and shared warehousing with peer organisations.
- Preposition stock where seasonal or predictable shocks occur.
- Explain realistic lead times to donors and partners.
How do we stop in-kind donations clogging the pipeline?
Ask for what you need, and say no to what you don't.
Unrequested goods can fill warehouses, block distribution and cost more to sort and dispose of than they are worth. A clear policy protects your supply chain and your donors' goodwill.
- Publish a current needs list, and update it often.
- Agree a policy for unrequested items, including polite refusals.
- Where local markets work, consider cash or voucher support instead.
- Track the true cost of handling in-kind goods.
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Last reviewed October 2026. General guidance, not legal, tax or financial advice.
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