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Climate Risk Is No Longer Optional in Supply Chain Management

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Climate Risk Is No Longer Optional In Supply Chain Management

A recent report published by the Center for Climate and Energy Solutions explores the current challenges facing global supply chains, including man-made and natural disasters. It reviews the existing supply chain resilience frameworks, emphasizing viability, flexibility, contingency, and supplier collaboration. The crux of the report is the absence of climate-specific metrics and decision-useful disclosure tools made available for supply chain managers. In an era of economic volatility and climate change, companies are navigating turbulent waters. Current barriers facing the implementation of climate risk analytics include data challenges, limited supplier transparency, and mismatched climate assessments and goals. The report calls for integrated approaches that align climate and supply chain practices and greater collaboration among businesses.

This report addresses the critical gap in current supply chain management: the lack of integrated climate analytics. It highlights how this absence prevents managers from being informed about existing and impending climate risks. The report advocates for the adoption of integrated strategies that blend climate and supply chain management, stressing the importance of enhanced business collaboration to achieve this.

I spoke with Sadie Frank, one of the contributors to the report, who worked with C2ES in the past, helping inform the private sector on regulation developments. She is now a co-founder of a climate risk analytics firm, N4EA. Through her work, she found that climate professionals think of supply chains fairly narrowly and focus primarily on asset risk. As we know, the supply chain is a multi-disciplinary space that includes trade finance, warehouse operations, planning, transportation, and much more.

The need to develop tools to harmonize climate risk, including floods, fire, and asset risk. While working on informing the climate risk community of the true expansiveness of what supply chains truly entail, and the rich history of supply chain resilience.

How are companies implementing Climate Risk Assessments today?

“It’s a spectrum; companies such as those in the rail industry are more forward-thinking due to their vulnerabilities to flooding, temperatures, and weather.” Companies are also already thinking about climate reporting, citing two climate reporting bills in the state of California, SB 261 and SB 253, impacting over 4500 companies with revenues greater than $500 billion.

Operational pressures are growing as global climate targets slip out of reach, making climate risk management more urgent. “We are starting to see that companies are not as likely to carve out a climate risk function, and are thinking more broadly about enterprise risk management, which includes new sources of risks and increasing volatility within their existing risk management framework.” She finds it more exciting, as this is a more effective strategy to think about climate risk.

What opportunities does collaboration bring for companies?

Fostering closer collaboration with suppliers, beyond mere document exchange for disclosure, is encouraged. This direct engagement allows for a deeper understanding of how suppliers perceive and manage risk.

“There’s a significant opportunity to merge expertise in supply chain risk assessment and climate risk management, translating this into improved operational outcomes.” A better operational understanding of extreme weather will enhance short-term operational resilience, while climate risk professionals will gain a more comprehensive, long-term view of supply chain resilience.

Going Beyond Risk Alerts:

Risk alerts are helpful, but they are not the full package. Typically, you will be pinged if your supplier is impacted by an incident such as a fire or flood, but the alerts fail to provide further details on the extent of the impact. These warnings should include more context and meaning so supply chain managers can better understand the true impacts of the incident to plan accordingly.

How are supply chains today preparing for climate disruptions?

“Significant advancements have been made in the core areas of resilience, flexibility, contingency, and collaboration within supply chains.” While substantial progress has occurred since the COVID-19 pandemic, same-day shipping models have inadvertently introduced considerable fragility. Additionally, tariffs have heightened global awareness among companies, prompting them to develop more strategic approaches to sourcing and planning.

“The future of supply chain management lies in a comprehensive understanding of transport networks, encompassing both their physical risks and vulnerabilities. This involves accounting for human-made factors like tariffs, alongside the evolving changes to our planet.” Strategic warehouse placement is crucial, but it’s equally vital to integrate climate risks associated with your transport networks into the decision-making process.

Closing thoughts: “This is the new normal. There is no way we can engineer our way out of increased supply chain volatility and climate risks. As supply chain professionals, we must accept that our world is more chaotic and find solutions to better manage the future.”

Organizations Included:

C2ES: The Center for Climate and Energy Solutions (C2ES) is a nonprofit, nonpartisan organization dedicated to advancing practical policies and actions to address climate change and promote clean energy. It works with businesses, policymakers, and communities to develop innovative solutions that reduce greenhouse gas emissions and strengthen climate resilience.

N4EA: is a predictive analytics company focused on climate and weather risk in global supply chains, using real-time data and geospatial modeling to simulate disruptions and their impact on logistics, emissions, and costs.

The post Climate Risk Is No Longer Optional in Supply Chain Management appeared first on Logistics Viewpoints.

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The Enterprise Workflow Is Becoming More Important Than the Enterprise Application

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Enterprise software has traditionally been organized around applications. Companies buy an ERP to manage transactions, a WMS to run the warehouse, a TMS to manage transportation, planning applications to build forecasts and plans, and procurement systems to manage sourcing and suppliers. That architecture reflects real functional expertise, but the most important supply chain problems increasingly occur in the workflow that crosses those applications rather than inside any one of them.

The need for an execution architecture makes this shift easier to see. Once the enterprise begins designing the path from signal to decision to action, the unit of analysis is no longer the application; it is the end-to-end workflow. AI strengthens this transition because agents can potentially follow a problem across several systems in a way traditional application-centric automation rarely could.

Operational Problems Ignore Software Boundaries

A supplier failure does not remain a procurement event. It changes inventory exposure, affects production schedules, alters transportation requirements, threatens customer commitments, and may create financial consequences. A late customer order can similarly cross order management, inventory allocation, warehouse execution, transportation, and customer service before it is resolved.

The applications involved may all be performing correctly while the overall process is poor. This is also why I argued that real-time visibility may stop being a standalone market: once visibility becomes embedded in broader workflows, its value increasingly comes from what happens next. That is one reason the move from functional software to decision architectures is important: the enterprise outcome depends on the sequence of decisions across systems, not just the quality of each individual application. Application excellence remains necessary, but it is no longer sufficient.

The Workflow Is Where Context Accumulates

An individual system sees only part of the situation. The TMS may know freight options, the WMS knows inventory and labor, the planning system understands forecast and supply implications, and the ERP contains financial and transactional context. The cross-application workflow is where these perspectives can be combined into a decision that reflects the business rather than one function.

This helps explain the rise of an intelligence layer above ERP, TMS, and WMS platforms. The strategic value of such a layer is not that it replaces those systems, but that it can assemble context and coordinate work across them. AI agents are particularly well suited to this role when they have governed access to enterprise data and tools.

Platforms Gain an Advantage, but Not a Monopoly

The trend also helps explain why supply chain platforms and networks are becoming more strategically important. A platform that already spans planning, execution, visibility, and transactions can reduce the friction involved in moving context across the workflow. That can be a powerful architectural advantage as more decisions become cross-functional.

It does not automatically settle the best-of-breed versus platform argument. A specialized application can still be superior when depth of functionality matters, and many enterprises will continue to operate heterogeneous technology estates. The winning architecture may therefore be a governed hybrid in which specialized applications participate in common workflows rather than behave as isolated destinations.

Standards Matter Because Workflows Need Reach

Emerging approaches such as MCP, A2A, and graph-enhanced AI matter in this context because cross-application workflows require agents to discover tools, exchange information, and understand relationships among entities. Standardized access reduces the bespoke integration burden that has historically made cross-system automation expensive. Graph structures can also help preserve the relationships among orders, inventory, suppliers, customers, facilities, and transportation movements that give an operational event meaning.

However, technical reach does not guarantee operational quality. The workflow still needs business logic, guardrails, escalation paths, and a clear enterprise objective. Technology can make it possible for an agent to touch ten systems, but management has to decide what the agent should accomplish across them.

Workflow Ownership Becomes a Management Issue

This creates an organizational question that many companies have not fully addressed: who owns the cross-functional workflow? Functional leaders own their systems and KPIs, while IT owns much of the integration infrastructure. Yet a disruption-resolution workflow may cut across procurement, planning, transportation, warehouse operations, finance, and customer service without having a single natural owner.

As AI automates more of these paths, workflow ownership will become more important. Someone has to define the objective, resolve competing priorities, determine what can be automated, and measure whether the end-to-end process improves. That responsibility may sit in a control tower, an operations excellence function, a transformation office, or a new type of process owner, but it cannot remain implicit.

From Application Portfolios to Operating Flows

The shift does not mean enterprise applications disappear. It means companies should evaluate them partly by how effectively they participate in operating flows. APIs, event models, permissions, configurability, semantic consistency, and agent access become as important as the features visible inside the user interface because those characteristics determine whether the application can participate in automated decision and execution loops.

The sequence is now becoming clear. The coordination premium explains why enterprise objectives matter, the cross-functional agent problem explains why local optimization is dangerous, and the execution architecture defines the path from intelligence to action. Once the workflow becomes the unit of execution, the next question is economic: how much value is created when that workflow operates faster? That leads directly to decision latency.

The post The Enterprise Workflow Is Becoming More Important Than the Enterprise Application appeared first on Logistics Viewpoints.

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Automated Storage & Retrieval Systems — Orlando

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Warehouse automation is moving quickly from a specialized investment to a core component of modern distribution strategy. Automated storage and retrieval systems, or AS/RS, are increasingly central to that transition, helping companies increase storage density, improve throughput, reduce manual travel, and make better use of increasingly expensive warehouse space.

In this Logistics Viewpoints video, recorded in Orlando, we discuss the evolution of automated storage and retrieval systems and what these technologies mean for warehouse and distribution operations.

The conversation looks beyond the equipment itself. As warehouses become more automated, companies increasingly need to think about how storage, material movement, software, labor, and broader fulfillment processes operate as an integrated system.

For supply chain leaders evaluating warehouse automation, AS/RS is becoming part of a much larger question: what should the warehouse of the next decade look like, and where does automation create the greatest operational value?

Watch the full Logistics Viewpoints discussion below.

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ARC Forum – What Is the Forum and How Do I Get Involved?

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The ARC Industry Forum brings together executives, technology suppliers, manufacturers, infrastructure operators, analysts, and other industry leaders to examine how technology is changing industrial operations.

But the Forum is more than a conference. It is an opportunity for the industrial technology community to compare strategies, understand emerging technologies, hear directly from practitioners, and discuss the operational challenges shaping the next generation of manufacturing, supply chain, energy, infrastructure, and automation.

In this video, we discuss what the ARC Forum is, the role it plays within the broader ARC Advisory Group community, and how companies and individuals can become involved.

For Logistics Viewpoints readers, the Forum is particularly relevant because the boundaries between traditional supply chain technology and the broader industrial technology environment continue to disappear. AI, robotics, automation, connected operations, digital twins, autonomous systems, and intelligent infrastructure increasingly span both worlds.

The ARC Forum provides a place to understand those changes directly from the companies and practitioners implementing them.

Watch the video below to learn more about the Forum and how to get involved.

The post ARC Forum – What Is the Forum and How Do I Get Involved? appeared first on Logistics Viewpoints.

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