A supplier is missing and everything is on hold, how the Climate Performance Diagnosis reinforces operational resilience.

The Porsche Incident: Timeline of an Avoidable Failure

What happened?

A major flood affected the site of a strategic supplier of aluminum alloys, paralyzing the production of several premium car manufacturers. Porsche was particularly affected, failing to find alternative solutions quickly, unlike BMW and Mercedes-Benz.

Delayed communication with severe consequences

It took 23 days - from June 30 to July 23 - for Porsche to officially announce a downward revision of its sales forecasts. This late communication surprised the markets, causing a brutal correction of the stock price.
"It's a biblical flood that wiped out the gains from Porsche's IPO," said Stephen Reitman, an analyst at Bernstein Research at Usine Nouvelle.
According to experts, this flood would result in the loss of production of 10,000 to 17,400 vehicles during the second half of 2024. A considerable impact that could have been anticipated.

Climate Risk Analysis: A Strategic Blind Spot

A surprise that shouldn’t have been one

"This raises some questions about supply chain management at Porsche," noted Patrick Hummel, an analyst for UBS, "surprised to see that Porsche is frequently hit by supply chain issues, while supply chains have remained very stable for most manufacturers since the semiconductor crisis ended."
What is presented as "a biblical flood" was actually just a fifty-year flood - an event whose probability can be calculated and whose consequences can be anticipated.

Identifying the weak link: Novelis in Sierre

Our analysis reveals that the affected site was most likely that of Novelis in Sierre, Switzerland. Data from the Climate Performance Diagnostic (CPD) show that this site has:
•    Significant exposure to river flood (non-defended and defended) and rainfall risks
•    Potential water heights exceeding 2 meters in some buildings
•    An estimated probability of occurrence of 2% in the current year
•    A cumulative risk of 18% in the next 10 years and 33% in the next 20 years

The Climate Performance Diagnostic: An Essential Tool for Industrial Resilience

How the CPD could have prevented this crisis

The Climate Performance Diagnostic of Tardigrade AI allows for precise evaluation of the climate risks to which your production sites and those of your critical suppliers are exposed. In Porsche's case, the CPD could have enabled:
1.    Anticipate risks - Identify the vulnerability of the Novelis site to flood peril
2.    Adapt strategy - Diversify suppliers or plan safety stocks
3.    Plan - Establish contingency and business continuity plans
4.    React quickly - Communicate proactively with stakeholders and financial markets

The concrete benefits for your business

The systematic use of the CPD in your risk management strategy allows you to:
•    Secure your supply chain by assessing the exposure of your critical suppliers
•    Rank and select your partners based on their level of climate resilience
•    Engage in constructive conversations to reduce identified risks
•    Adapt your value chain to the new realities of climate change
•    Assure your investors of your ability to manage climate risks

 Conclusion: Turning Risk into Opportunity

In a world where extreme climate events are becoming more frequent and intense, the resilience of your supply chain is no longer optional - it is strategic. The Porsche incident demonstrates that proactive analysis of climate risks is now essential to maintain operational continuity and preserve corporate value.
Do you want to know the resilience of your supply chain against climate risks? Contact us today for a personalized demonstration of the Climate Performance Diagnostic.

FAQ on Climate Resilience of Supply Chains

What are the main climate risks for industrial supply chains?

Floods, droughts, heat waves, and extreme storms are the main threats to the continuity of industrial operations.

How to concretely assess the vulnerability of an industrial site?

The Climate Performance Diagnostic analyzes the probability and intensity of climate risks for each site, taking into account its precise location and climate projections up to 2050.

What is the cost of a climate risk assessment per site?

For a few hundred euros per site, the CPD provides a comprehensive analysis of climate risks, a minimal investment compared to the potential losses in the event of an incident.