Supply chain disruption is becoming the norm, not the exception. From shifting trade policies and tariffs to major climate events, organizations are being pushed beyond business-as-usual operations. In a vacuum, treating efficiency as king is fine. But in today’s messy reality, prioritizing only speed and cost minimization can leave companies extremely vulnerable to disruption.
One disruption risk mitigation strategy that has been gaining momentum over recent years is supplier diversification. Supplier diversification involves expanding your supply base in a way that makes your organization less vulnerable when disruptions arise. And according to Accenture’s 2026 Pulse of Change research, nearly half (49%) of the 3,000 C-suite executives they surveyed plan to diversify their supply chains in response to macro environment changes.
In this article, you will learn:
Common supply chain disruptions
Why supply chains must balance efficiency with resilience
Supplier diversification basics and where to start
Why supply chain resilience is so important
Common Supply Chain Disruptions
Despite the proliferation of modern technologies designed to smooth the supply chain, disruption risk — or at least the perception of it among businesses — continues to rise. In RapidRating’s 2025 Annual Risk Report, 62% of businesses surveyed rated the supply environment as high/very high risk. In the latest 2026 report, the number had gone up to 66%.
Supply chain risks can be divided into two categories: internal and external. Internal risks stem from the company itself, such as inventory mismanagement or a lack of visibility. External risks, by contrast, come from outside the company. According to NetSuite, these external risks include:
Inflation
Climate-related events (e.g., natural disasters)
Labor shortages
Transportation delays
Cyberattacks
Geopolitical unrest
Global pandemics
Each of these external risks can wreak havoc on global supply chains. For example, NetSuite notes that the shutdown of the Suez Canal in March 2021 due to a stuck cargo ship halted an estimated $9.6 billion worth of shipments a day for six days. And COVID-19 led to a global shortage of semiconductors, components that nearly every modern industry relies on, including the automobile industry. Ford had to cut production, which naturally impacted sales, which negatively affected stock prices — illustrating the wide-ranging cascade of devastating effects external risks can have on businesses.
Related Reading: Staying Agile in the Face of Tariffs
What Is Supply Chain Resilience?
Supply chains are under pressure to be efficient. But while efficiency strategies are necessary and important, they won’t help businesses survive catastrophic supply chain disruptions. Instead, businesses must also aim to build resilient supply chains (i.e., ones that can continue to function in the face of almost certain disruption).
“Unlike efficiency strategies, which seek to eliminate excess” NetSuite explains, "resilience strategies embrace redundancy and controls to insure against volatility, by holding inventory buffers, diversifying suppliers, and investing in advanced visibility and monitoring technologies.”
Some of the hallmarks of a resilient supply chain include:
The ability to quickly adapt to changing conditions
Having backup options (e.g., multiple suppliers)
Real-time visibility into process and inventory
Proactive potential risk identification
Collaboration between all supply chain stakeholders
Efficiency and resilience strategies aren’t an either/or decision. Businesses need strategies aligned to both goals to stay profitable and adaptable.
Related Reading: What Is Supply Chain Resilience?
Why Supply Chain Resilience Matters
Supply chain disruptions can be extremely costly. Accenture’s 2023 survey of more than 1,200 senior executives from 11 industries found that disruptions to engineering, supply, production, and operations had caused companies to miss out on revenue growth opportunities of between 7–11%.
But improving supply chain resilience isn’t just about what you lose. It’s also about what you gain. The 2023 Accenture survey results revealed that the most resilient companies were able to capture 3.6% greater revenue than the least resilient companies. In addition to this competitive advantage, companies with resilient supply chains are positioned to gain customer trust and loyalty by being so consistent, even in times of crisis. And as a bonus, partnering with a wide range of suppliers can spur innovation that gives you an even greater competitive advantage.
Supplier Diversification 101
Supplier diversification is an increasingly important strategy for improving supply chain resilience. Companies that rely on one or two suppliers or even several suppliers within the same geographic area are at a high risk of disruption, explains Supply & Demand Chain Executive. “A weather-related catastrophe, geopolitical volatility or regulatory uncertainty can disrupt your supply base or at least create bottlenecks,” it continues. “Just-in-time procurement models fall apart under these pressures.”
Thus, the goal of supplier diversification is to decrease reliance on individual suppliers and to build a larger, more geographically and operationally diverse supplier base. It’s not just a numbers game. The additions must be highly strategic.
When done well, supplier diversification looks like a procurement team already having approved supplier alternatives in place before disruption arrives. So regardless of whether a business is hit with tariffs or a hurricane, it’s able to adapt quickly to mitigate further disruption. Supplier diversification can be the difference between a disruption being a minor hurdle and a major setback.
Related Reading: How Manufacturers Can Rethink Their Sourcing Footprint in the Face of Tariffs and Trade Volatility
Diversifying Your Supply Chain: Where To Start
Supplier diversification is a proactive approach to building supply chain resilience. It takes stock of current realities while anticipating what lies ahead. If you’re considering diversifying your supplier base, SupplyChainBrain recommends taking the following steps:
Map your supply chain. You need to have a clear understanding of where your suppliers (and your suppliers’ suppliers) are located. This is a diagnostic step that will help you see where your supply chain is most fragile and vulnerable to disruption.
Develop a future-risk model. Use your mapping to develop a model that can assess future supply chain vulnerabilities and inform risk-based supplier decisions. Because you must balance efficiency with resilience, your model should consider more than geographic location and even cost. Other important factors include quality and reliability.
Facilitate cross-functional collaboration. Incorporate input from all relevant teams across your business, including procurement, legal, logistics, and supply chain management. Everyone should be aligned toward the same goal.
Monitor and reevaluate. Supplier diversification is an ongoing discipline. Determine how often you want to reassess supplier risk (e.g., quarterly, annually) and stick to your plan. As SupplyChainBrain notes, “any supplier can be at a higher risk if you’re not keeping an eye on them.”
Keep Learning on The Supply Chain Source
Speaking of proactive approaches to building a better supply chain, The Supply Chain Source can help you face complexity with confidence by providing:
Resources for every member of the supply chain ecosystem
A Q&A community space where you can connect with your peers
Instant answers to compliance and routing questions
Start exploring what The Source has to offer here.