This Week in Business Building Smarter Supply Chains: Lessons from Crisis, Cost, and Technology
Oct 22, 2025
Gad Allon, a Wharton professor specializing in operations and supply chains, delves into the complexities of today's global supply chain landscape. He discusses the ongoing disruptions from the pandemic and geopolitical tensions. Gad explains how automakers are navigating aluminum shortages and the trade-offs between cost efficiency and resilience. He highlights the transformative role of AI and digital twins in enhancing predictive maintenance and risk management. Ultimately, he emphasizes the link between strong supply chains and economic resilience.
AI Snips
Chapters
Transcript
Episode notes
Modern Supply Chains Face Layered Risks
- Supply chains face rising, overlapping risks from climate, geopolitics, demand swings, supplier failures, and tariffs.
- Firms struggle to stabilize because these issues predate and outlast the pandemic.
Aluminum Fire Shows Concentration Risk
- The New York aluminum plant fire supplied 40% of U.S. manufacturing aluminum and may not fully recover until 2026.
- Automakers will ration aluminum, prioritize higher-margin models, and scramble for spot-market supply with price impacts.
Cost Optimization Creates Fragility
- Firms optimized for cost created geographic concentration and just-in-time fragility that reduce resilience.
- CEOs often want resilience post-crisis but underestimate the higher costs and redundancy required.