In today’s global business environment, supply chain risk management (SCRM) has evolved from a traditional operational function to a strategic tool capable of generating competitive advantages and improving financial performance. Data indicates that effective risk management can increase EBITDA margins by up to 10 points.
During a SoyLogistico meeting, hosted by PM STEELE, Raúl Méndez, COO of Grupo Quatro, noted that the distinction between companies that actively manage supply chain risks and those that do not is measurable across several KPIs. Organizations with established risk management protocols report annual cost savings of 6-12%, while those without such measures can experience an 8-18% increase in costs due to disruption.
Méndez pointed out that the speed of recovery from a disruption varies greatly depending on the strategies in place. Businesses with risk management protocols typically recover in three to 10 days, about five times faster than those without these strategies, which take between 15 and 45 days. In terms of inventory efficiency, managed supply chains achieve turnover eight to 14 times per year compared to four to seven times for unmanaged chains, resulting in a 40 to 60 percent improvement in working capital. Service levels also differ significantly, as On-Time In-Full (OTIF) compliance ranges from 92% to 98% for companies with risk management, leading to higher customer retention, while those without risk management see OTIF levels between 70% and 85%. In addition, the probability of out of stock is reduced to between 0% and 5% with management, compared to 12% to 28% without it.
Méndez said the analysis suggests that disruptions lasting a month or more occur on average every 3.7 years. The frequency and severity of these global disruptions have increased to the point where shocks are considered the norm rather than the exception in many sectors. Financially, these disruptions result in an annual loss of revenue of approximately $1.6 trillion globally. On average, organizations can expect to lose 42% of their annual EBITDA every ten years due to supply chain issues. Therefore, he said, supply chain stability has become the top concern for CEOs, with specific risks including pandemics, cyberattacks, commodity price fluctuations and regulatory changes.
Supply chain vulnerability is often driven by specific structural factors such as concentration, where a high density of suppliers in the same geographic area increases risk. Other factors include difficulty of substitution where switching suppliers is not easy, interconnectivity where interdependent suppliers cause cascading effects and the depth of multi-tiered supply chains which are more difficult to track and manage.
The integration of advanced technologies is at the heart of modern risk mitigation strategies. Advanced analytics and AI are used to convert data into predictive intelligence, enabling organizations to detect early warning signals, model potential disruptions, and continuously assess supplier vulnerabilities. Blockchain technology is also being deployed to improve transparency and security by facilitating end-to-end traceability, which mitigates risks related to counterfeiting, fraud and quality defects. Smart contracts within blockchain networks can further automate risk mitigation by ensuring that payments are only released when specific quality, timing or sensor parameters are met.
Operational and regulatory risk management in Mexico
For operations involving Mexico, specific logistical and geopolitical risks have been quantified. Major projected annual costs include the impacts of ocean freight volatility, tariff increases under the USMCA or WTO, congestion at the ports of Manzanillo and Lazaro Cárdenas, and security concerns related to cargo theft.
Beyond these operational hurdles, regulatory compliance has become an essential part of risk management. Manuel Farías, Deputy Director of Storage Systems, PM STEELE, highlighted the strict compliance required by the new seismic calculation laws enacted in 2023 and 2024 for Mexico City and other states. He pointed out that despite pressure from some clients to reduce costs by circumventing these standards, Farías stressed that prioritizing legal and safety regulations is non-negotiable to protect the workforce operating under these systems.
Farías added that to mitigate global volatility in Mexico, PM STEELE is diversifying its steel purchases, sourcing materials with specific chemical characteristics and gauges from domestic and international suppliers. According to Farías, by treating steel as a storable product and maintaining robust inventory levels, the organization creates a financial buffer that stabilizes costs, ensuring that price fluctuations are not passed on to the customer.
Applying similar principles to the agribusiness sector, Adriana Santana, Head of Construction and Compliance at Naturasol, provided a distinct perspective on the management of raw materials related to honey production. Describing it as a complex product, Santana explained that Naturasol mitigates geopolitical and logistical risks by sourcing 100 percent domestically from states such as Mérida, Veracruz, Chiapas and Oaxaca.
Santana said that to address biological risks, such as bee diseases caused by poor nutrition, the company has established a strategic partnership with the Inter-American Development Bank (IDB).BID). This collaboration focuses on investing and training local beekeepers, ensuring product safety and quality from the initial stage of the supply chain. Additionally, Naturasol utilizes a dedicated processing plant and maintains significant inventory levels throughout the year to protect against seasonality, demonstrating how supplier development and strategic alliances are essential tools for risk mitigation in Mexico.