Supply chain 2.0: Navigating the stakes of a hyper-connected future
Supply chain 2.0: Navigating the stakes of a hyper-connected future
From geopolitical tensions to climate disasters and labour unrest, the systems that keep goods moving are under pressure from every direction.
What risks impact supply chains? More like, what doesn’t?
Modern supply chains are complex, deeply interconnected webs where every strand depends on the others.
Whether it’s sourcing raw materials, manufacturing, or distribution, risks like digital transformation, geopolitical shifts, labour disputes, and environmental pressures are redefining how goods move across borders. Add in the growing push for sustainable and ethical supply chains, and it’s a recipe for unprecedented complexity.
The COVID-19 pandemic in 2020 was an early warning — we learned that supply chains can collapse overnight. Labour, manufacturing, and shipping disruptions triggered shortages across industries, exposing vulnerabilities in single-source suppliers, just-in-time inventory models, and outdated logistics systems.
Fast forward to 2025, and supply chains are facing fresh challenges. President Trump’s unprecedented move to threaten significant tariffs on historic allies significantly changes the landscape for Canadian businesses. It’s clear that unquestioned reliance on affordable cross-border trade is no longer a given — and that will pose serious challenges for a domestic economy that has optimized for such a system over the last 30 or more years. Regardless of the ultimate size and duration of tariffs, the ripple effects are certain to be significant and far reaching.
Canada’s rail labour disputes in 2024 further reminded us just how fragile supply chains still are. A lockout of more than 9,000 workers at Canadian National Railway and Canadian Pacific Kansas City threatened hundreds of millions of dollars in daily trade, hitting grain exports, chemical manufacturing, and cargo transportation hard. The fertilizer industry alone lost an estimated $55 million to $63 million each day, as per Fertilizer Canada, due to halted rail services, putting Canada’s global agricultural trade at risk.
The future of supply chains will belong to those who can evolve, digitize, and prepare for the unexpected.
The reality of the modern supply chain
Supply chain resilience is no longer only about efficiency. It’s now about agility, technology, and risk management.
Digital transformation is changing logistics. Leading logistics and retail companies, like UPS and Walmart, leverage data-driven inventory and logistics systems to outmaneuver disruptions. But not all businesses can keep up, which could force smaller businesses out of the market.
Regulatory and ethical pressures are growing. Canada’s Supply Chain Act (2024) now requires annual reporting on forced and child labour prevention — a step toward transparency but a challenge for businesses struggling with supplier oversight.
Global governance risks are increasing. Canada’s import trading partners are looking at growing governance challenges, making due diligence more important than ever for avoiding unethical suppliers and ensuring regulatory compliance.
Risks to watch
Extreme weather events: Wildfires, floods, and storms are disrupting production facilities and transport infrastructure.
Geopolitical instability: Global geopolitical tensions, like tariffs, trade disputes, and conflicts, affect the availability and cost of raw materials and goods, influencing supply chains.
Labour disruptions: Strikes and labour disputes can lead to interruptions in the movement of goods across the country.
Transportation infrastructure challenges: Congested ports, outdated railways, and highway bottlenecks are increasing shipping delays and costs.
Cyber security threats: Supply chains face more risks of cyber-attacks, like ransomware and data breaches, targeting critical infrastructure and digital systems.
Technological disruptions: Technological advancements and digital transformations introduced complexities and integration challenges within supply chain operations.
Supplier insolvency: Economic uncertainties can lead to financial instability among suppliers, resulting in disruptions due to insolvency or reduced production capabilities.
Commodity shortages: Higher input costs and environmental challenges are making key materials harder to source.
Regulatory changes: Companies now face higher reporting requirements on carbon emissions, ethical labour, and environmental impact.
Pandemic-related disruptions: Lingering impacts of the COVID-19 pandemic continue to affect labour availability and global trade dynamics.
Mitigation strategies
- Diversify suppliers
- Invest in analytics and digital tools to identify issues and optimize resources
- Strengthening cyber security
- Scenario planning and contingency strategies
- Monitor regulatory landscape
- Build stronger relationships and collaborate with vendors and partners
Questions to consider
- What threats to global trade may impact your business? Are you running risk scenarios to determine how best to be prepared to mitigate risk?
- How well do you know your suppliers and the risks within their business that may directly or indirectly impact you?
- Have you asked your most relied-upon third-party suppliers how they can be prepared to help mitigate risk if and when needed?
- How reliant are your supply chains on digital systems with third-party integrations? Do these third parties have sufficient cyber security controls?
- Is your supply chain agile enough to adapt to unforeseen risks and disruption?