Lessons from 2024: How to identify hidden supply chain risks

2024 was a stress test on global supply chains, a year of economic pressures, technological shifts, high costs, labor unrest, geopolitical instability and increasing compliance demands. But it was also a year that offered crucial lessons on why organizations should build resilience into every supplier relationship and where to start.  

Adaptability is the key to survival in an era of constant upheaval. Our Supply Chain Risk Report 2025 helps leaders examine these vulnerabilities and rethink supplier engagement, risk mitigation and digital transformation. Explore the most significant risks that disrupted global supply chains in 2024, and the strategies forward-thinking leaders must embrace to stay ahead of 2025’s surprise shocks. 

FOR MORE CONTEXT

Supply chain disruptions and financial fragility dominated the year  

Global supply chains today compound the variables and potential disruptions affecting every single shipment. In 2024, this complexity manifested difficult financial conditions, frequent disruptions and soaring compliance obligations that many suppliers and shippers were unprepared to combat. 

Financial instability was a critical challenge for suppliers in 2024, driven by elevated energy prices, disruptive technology shifts, heightened interest rates and slower-than-expected economic growth. Supplier liquidity and margins suffered, particularly in key regions like Germany and industries like the automotive sector. Sphera’s risk indicator for “Bankruptcy” soared by 47% in 2024, compared to the same period in 2023, with corporate bankruptcies in the US hitting a 14-year high.  

Likewise, delivery risks remained a persistent obstacle for companies worldwide, with delivery disruptions impacting any given company at least once per month on average. Drivers include intensified natural disasters and labor strikes and bottlenecks at pivotal touchpoints. 

Amid these financial difficulties and delivery delays, new supply chain regulations such as the EU’s Corporate Sustainability Due Diligence Directive (CSDDD) and Canada’s Supply Chains Act added additional complexity and higher stakes to the business of maintaining complete supply chain visibility. 

WHO THIS AFFECTS

The buried risks within your supply chain 

When new supply chain risks catch organizations off guard, they pay a high price to get back on their feet or face going out of business. Procurement and supply chain leaders must adopt new strategies for uncovering hidden risks, fortifying supply chains and building long-term resilience. This doesn’t just mean taking a cursory look at past risk indicators. It means carefully developing supplier risk assessments and continually monitoring supply chain events around the world.  

Consider a range of different suppliers. Each is embedded in a different industry, with its own tides and risks. Each region comes with its own risk of natural disasters, geopolitical turmoil, regulatory noncompliance and macroeconomic instability. Zoom in even further, and each individual supplier brings with it hidden risks, whether financial, structural, reputational or operational. 

If firms fail to adopt a proactive, comprehensive approach to supply chain risk management, one that accounts for all of these variables, they will struggle to recover from even mild disruptions and economic shifts. Our report projects that many of the most painful risks of 2024 will intensify in 2025. Geopolitical tension, high cross-border trade costs, new regulations and frequent natural hazards like flash floods aren’t going away. Looming tariffs between the United States and China, Canada, the EU and Mexico threaten inflated costs and abrupt delays. Whether through supplier diversification, automation or alternative risk mitigation strategies, the time to act is now. 

WHAT YOU NEED TO DO

The future of supply chain risk management is proactive, holistic and digital 

The path to full supply chain transparency is accessible from any starting point. Even in the face of oncoming disruptions, any company can adopt strategies to uncover hidden supply chain risks and emerge stronger. In the face of oncoming financial pressures and geopolitical uncertainty, preparation will be a key differentiator. Will organizations take up persistent threat monitoring and planning or will they get caught off guard by the next wave of volatility? 

The story of 2024 teaches organizations to take a preventative approach to identifying and mitigating risks. For the first time, Sphera’s preventative insights exceeded event-based alerts as modes of identifying viability risks, pointing to a major shift in how organizations take on this challenge. Rather than scrambling to rethink logistics and secure new suppliers after disruptions hit, businesses can rely on early contingency planning to boost agility and minimize delays. 

What’s more, supplier engagement hit an inflection point in the fight for resilience. Communicating early and often with suppliers about expectations, upcoming obstacles and delivery statuses minimizes the risk of disruptions and strengthens relationships. Some companies are also considering moving production closer to home as a way of lowering risk. This shift calls for an in-depth understanding of supply chains, beyond Tier 1 suppliers. 

In short, leaders need to share risk indicators across suppliers and reach decisions quickly. Implementing supply chain transparency software generates this visibility and predictive insights, all with the aim of boosting long-term stability as supply chains grow. 

HOW SPHERA CAN HELP