25 July 2025

The Importance of Risk Management and Resilience in the Supply Chain Amid Geopolitical Tensions

This statement, like many others in recent months, reflects a growing trend in global trade policies: protectionism, shifting alliances, and increasing uncertainty. Across industries, businesses are being confronted with sudden tariffs, export restrictions, and geopolitical conflicts that disrupt global supply chains overnight.

Geopolitical tensions have always influenced global trade, but the scale and complexity of today’s challenges are unprecedented. For companies operating in high-tech and global manufacturing, the pressure to ensure supply continuity while managing costs and compliance has never been greater.

Building Resilience: The New Imperative

Resilience in supply chains has shifted from being a strategic priority to an absolute necessity. But what does resilience really mean? It’s not just about having backup suppliers or increasing stock levels. True resilience is about adaptability, risk visibility, and agility—the ability to anticipate disruptions, react quickly, and minimize both short-term disruptions and long-term impact.

From my experience, companies must:

• Diversify supplier bases to reduce dependency on high-risk regions.
• Improve real-time visibility through advanced analytics and AI (in my previous article I wrote about the impact of AI on Tail Supply Management).
• Strengthen supplier collaboration deeper in the supply chain than ever before to build trust and transparency.
• Invest in strategic stock for critical components without inflating working capital.

At MAG45, we have seen how companies that prioritize risk-based supply chain management can maintain operational stability even in volatile environments. For our clients, we proactively screen suppliers and their supply chains for potential risks. Based on these risk assessments, we establish specific supplier agreements, diversify where possible and build up strategic stock when deemed necessary, ensuring the highest efficiency rate while minimizing risk.

The Glocalization Dilemma: Balancing Global and Local Sourcing

One of the biggest debates in supply chain strategy today is the balance between global and local sourcing—known as glocalization. The need for cost efficiency has long driven companies to global suppliers, but today, resilience concerns are pushing many toward near- and reshoring.

However, nearshoring isn’t always the silver bullet. It can reduce exposure to geopolitical risks, but it may also lead to higher costs and reduced supplier diversity. The challenge for companies is finding the right mix—leveraging global efficiencies while securing local fallback options for critical components. For example, when working with a European client, we helped shifting a portion of their supply chain from Asia to Eastern Europe. While this nearshoring move reduced their exposure to geopolitical risks from overseas suppliers, it also led to higher manufacturing costs and a narrower pool of specialized component providers—highlighting the need for a balanced approach.

What Supply Chain Leaders Must Do Today

In a world where geopolitical disruptions are no longer an exception but rather an expectation, supply chain leaders must act now.

To summarize, in my opinion the best way to anticipate on geopolitical risks, companies should:

• Continuously map supply chain risks and stress-test supplier networks.
• Develop multi-sourcing strategies to minimize dependency on high-risk regions.
• Leverage technology to improve supply chain visibility and predictive analytics.
• Invest in supplier partnerships to create flexibility without compromising efficiency.
• Balance cost and risk through a strategic approach to glocalization.

Looking ahead, the coming 5 to 10 years will likely see further fragmentation of global supply chains, increasing regionalization, and stronger regulatory requirements. Companies that embed resilience at the core of their supply chain strategy will not only survive but thrive.

I’m curious—how is your company preparing for geopolitical risks in the supply chain? Let’s exchange insights in the comments.