C1 Reading Test – Supply Chains, Geopolitics & Resilience Strategies

Read the passage and decide if each statement is True (T), False (F), or Not Given (NG).

When supply chains broke during the pandemic, many firms discovered that “efficiency” had quietly become a synonym for “fragility.” Just-in-time logistics minimized inventory costs but amplified shocks; one missed shipment could idle a factory an ocean away. Since then, boardrooms have adopted a new vocabulary—resilience, redundancy, and regionalization—yet the hard part is translating these terms into workable designs that account for geopolitics as well as spreadsheets.

Resilience is not a single tactic but a portfolio of trade-offs. Dual sourcing, for instance, reduces dependence on one supplier but raises coordination costs and can dilute volume discounts. Nearshoring shortens lead times and improves oversight, but labor and compliance expenses may rise. Stockpiling buffers demand spikes, while dynamic safety stocks—adjusted by real-time signals—avoid tying up cash indiscriminately. The right mix depends on the pattern of risk: a hurricane zone requires different buffers than a sector exposed to export controls.

Geopolitics has moved from background noise to design constraint. Export bans on critical inputs, sanctions, or cross-border data rules can redraw maps faster than capital equipment depreciates. In such environments, “friend-shoring” promises political reliability by clustering production among allies. But allies share vulnerabilities too: a drought in one country’s hydropower grid can shutter upstream suppliers; a banking shock can freeze letters of credit. Political alignment does not immunize a network from physics or finance.

Data can illuminate blind spots if used with care. Supplier-mapping tools that trace sub-tiers reveal concentration risk hidden below the first contract. However, maps are only as current as their updates, and small suppliers change faster than dashboards do. Scenario exercises—run annually or tied to warning indicators—help leaders test how inventory policies, hedging, or alternative logistics would respond to simultaneous shocks rather than single-variable disruptions.

Ultimately, resilience is a governance habit more than a project. Firms that learn from near-misses, share incident data with partners, and pre-negotiate emergency clauses tend to recover faster. The test is not whether a network avoids every shock, but whether it bends without breaking—and whether the lessons from bending become part of the next design.