The "Hidden Risks" Series: Episode 1: The "Gray Rhino" Events in Supply Chains

Dear Risk Managers,

What if I told you that the biggest supply chain disasters don’t happen out of nowhere—but are actually seen coming years in advance? The real danger isn’t the unexpected, but the risks we recognize and still ignore.

Last week, we wrapped up our Sustainable Procurement and Circular Economy series by exploring future trends shaping procurement. But today, we’re shifting gears to something that keeps supply chain professionals awake at night: Hidden Risks.

🚨 Introducing 'Gray Rhino' events – high-impact, high-probability disruptions that everyone sees coming but no one is ready for. Why? Because they’re too big, too complex, or too inconvenient to address—until they turn into full-blown crises.

This edition will equip you with the strategies to identify, prepare for, and mitigate these risks before they hit your bottom line.

📌 McKinsey Report: A new era for procurement: Value creation across the supply chain – Explore how recent upheavals have underscored procurement's importance for generating value and what the future holds. Read more

📌 Harvard Business Review: Small Businesses Play a Big Role in Supply-Chain Resilience – Understand the critical role small and midsize companies play in American supply chains and the importance of technology adoption for resilience. Read more

📌 Bloomberg: The Next Big Procurement Risk? – Learn about the rising transportation costs and their impact on global supply chains. Read more

✔ Breaking Insight – A real-world risk hitting supply chains right now
✔ Short-Series Feature – The anatomy of a Gray Rhino event
✔ Procurement Power Move – How to spot early warning signals
✔ Quick Case Study – When a company ignored a Gray Rhino… and paid the price
✔ Trend Watch – The next major disruption businesses must prepare for
✔ ProcWee™ Takeaways & Action Steps – Key lessons and your next steps

Understanding "Gray Rhino" Events in Supply Chains

🚀 Enjoy the ProcWee™ Podcast Show!

Houthi rebel attacks on commercial vessels in the Red Sea have forced major shipping carriers like Maersk, MSC, and CMA CGM to reroute away from the Suez Canal, adding weeks to delivery timelines and raising costs dramatically (The Wall Street Journal, 2025).

🔹 Why it matters: The Suez Canal accounts for 12% of global trade. This disruption is causing skyrocketing freight rates, potential inventory shortages, and serious delays for industries relying on just-in-time deliveries (Associated Press, 2025).

🔹 Actionable Takeaway: Companies must diversify logistics strategies now—rely less on single routes and explore alternative freight solutions to mitigate disruptions.

🔹 Example: The Semiconductor Crisis
The global chip shortage in 2021 was a textbook Gray Rhino. Auto manufacturers ignored early warnings of potential supply bottlenecks, focusing instead on short-term cost-cutting. When demand surged post-pandemic, they were unprepared, leading to $210 billion in lost revenue for the automotive sector alone (McKinsey & Company, 2022).

Key takeaway: Companies must actively monitor known risks instead of assuming business as usual.

➡ Next Week’s Teaser: We’ll explore hidden economic shifts that could raise procurement costs by 20% and how to get ahead of them.

Most companies react too late to high-impact risks. Here’s how to identify early warning signals before a Gray Rhino wrecks your supply chain:

Start implementing these now to get ahead of the next disruption.

🔹 Situation: After the 2011 Fukushima disaster, most car manufacturers suffered severe supply shortages—except Toyota.

🔹 Tasks: Toyota needed to ensure future disruptions wouldn’t paralyze their production.

🔹 Actions:

🔹 Results: Toyota avoided major production halts when the 2021 chip crisis hit, gaining a competitive edge over competitors who scrambled to source semiconductors (Harvard Business Review, 2023).

📌 Lesson: If you don’t proactively prepare, your competitors will—at your expense.

Companies are increasingly shifting from global to regional supply chains to avoid geopolitical risks and transit delays.

🔹 Why it matters: The cost of global shipping is rising, and new EU and U.S. regulations are pushing companies to move production closer to home (Forbes, 2023).

🔹 What to do: Evaluate your supplier base now—can you relocate key manufacturing closer to home before your competitors do?

✅ "Gray Rhino" events are predictable risks that companies ignore until it’s too late.
✅ Proactive risk mitigation (like Toyota’s strategy) separates winners from losers.
✅ Nearshoring is no longer just a trend—it’s becoming a necessity.

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💡 Coming Next Week: I’ll share the top 3 insights from this discussion, so be sure to weigh in!