Since the pandemic, and with increasingly extreme weather, CEOs are desperate to understand the risks
Good morning.
In four decades writing about business, I’ve always avoided stories about supply chains. Why? The title of a podcast series I tripped across recently says it succinctly, if cheekily: “Supply Chain is Boring.” Important, perhaps. Critical, even. And it can be lucrative, when done well. But boring.
Or at least it was, until people discovered last year that they couldn’t buy toilet paper. Or when they set out to get a new car and found none on the lot. Or if they watched the giant Ever Given block the Suez Canal or followed the wild ride in lumber prices. Suddenly, supply chain is no longer the dull details no one wants to dig into; it is a high stakes casino.
That’s true for CEOs, too, who once turned to contract manufacturers like Flex to avoid the boring details. Revathi Advaithi, who runs the global contract manufacturing firm Flex, and who was this week’s guest on the Leadership Next podcast, says now “every CEO is talking about de-risking their supply chain, supply chain resiliency, how do I get my components, and how do I make sure I get them forever without trade issues.”
Flex was number 499 on this year’s Fortune Global 500 list, and makes “a little bit of everything,” Advaithi says, “from medical products to consumer products to automotive components.” The last year changed the nature of her conversations with customers. “Many of them today are sitting down and saying, ‘I want to really understand where this is coming from… What are the sources of risk if there is a tsunami in Japan? If there is a weather issue in Texas, what does that mean to my supply chain?…And it’s happening in the C-suite.” Odds are such supply chain concerns will remain elevated, given geopolitical tensions and the prospects for ever more extreme weather.
You can listen to Advaithi’s full interview on Apple or Spotify, including the story of how she went from being an engineer to a CEO—and became one of only 23 women running Fortune Global 500 companies.
Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
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This edition of CEO Daily was edited by Katherine Dunn.
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