Source page: McKinsey & Company
Commentary
Companies need to weatherize their supply chains
Climate change | Supply Chain Management
September 25, 2020 – The semiconductor industry—whose supply chains are highly concentrated in regions with an increasing probability of disruptive climate hazards—provides a good example of why all companies should rethink their supply chains. A downstream semiconductor company that prepares its supply chain for severe weather could preserve a lot more of its sales should a major storm hit.
To read the article, see “Could climate become the weak link in your supply chain?,” August 6, 2020.
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Visual form
Waterfall Chart and Bar Chart: two-panel supply-chain disruption loss bridge and preparedness comparison.
Layout / body structure
The left panel is a disaster-year profit bridge that decomposes the financial hit. The right panel compares the remaining revenue outcome for an unprepared downstream player versus a prepared one.
What is being compared
It compares the financial effect of an extreme-weather disruption on a semiconductor-linked downstream company under unprepared and well-prepared supply-chain states.
Measurement system
The chart uses normalized revenue and EBIT levels, percentage losses, disruption duration, safety-stock coverage, dual-sourcing effects, and asset-resilience assumptions.
Visible structure inside the graphic
The waterfall panel moves from a normal-year baseline through damaged assets, lost sales, and logistics or reconstruction inefficiencies. The right-side bars show how much revenue is lost or preserved under the two preparation scenarios.
Main takeaway from the visual
The chart shows that supply-chain preparation can sharply reduce the financial damage from climate disruption by shortening interruption duration and limiting dependence on single-sourced supply.
Key standout values or extremes
The main contrast is about 35 percent of annual revenue lost for an unprepared downstream company versus about 5 percent for a well-prepared one. The severe case assumes a five-month disruption of all single-sourced supply.
Controls / sequence, when applicable
This is a static two-panel waterfall and bar chart; there are no in-chart controls to operate.
Companion media, when applicable
There is no separate companion audio or video; the supply-chain weatherization chart is the full visual on this page.