Field Notes_003_Supply chain resilience after 2024: what European distributors must rebuild now

Most European distributors did not redesign their supply chains after 2024. They absorbed the shocks, rerouted what had to be rerouted, paid the freight bills, and went back to the operating model they had in 2019. The shocks were treated as weather. The weather passed. The structure underneath did not change.

This is the operating risk that almost no Belgian mid-market distributor I speak with currently prices accurately. The 2024 shocks were not weather. They were the system telling the operator class that the post-2008 assumptions - stable lanes, low tariffs, deep single-source partnerships, global optimisation as the dominant frame - had quietly stopped holding. The companies that read that signal correctly are now eighteen months into a redesign. The companies that read it as a temporary disturbance are running, structurally, with risk they have not put a price on.

This is the third entry in the Field notes series. The first two looked inside the company: structure that does not scale, priority setting that does not hold. This one looks at the perimeter - at the supply chain as a designed system, and at what European distributors have to rebuild now to survive the next decade of physical, political, and tariff volatility. The audience is the same: founders, owner-managers, CEOs, operating board members - anyone whose week is judged on what the company actually delivered.

Why the existing playbooks fail

Every distributor has, by now, run at least one "supply chain resilience" exercise. Most have produced a deck. Almost none have produced a structural change. The decks share a recognisable shape: a risk register with thirty rows, traffic-light colour coding, a mitigation column written in the conditional tense, and a recommendation to "monitor closely". The deck is reviewed at a board meeting, archived, and never opened again.

The reason these exercises fail is not effort and not intelligence. The reason is that they are designed as compliance artefacts, not as decision instruments. They list risks that nobody disputes - war in Ukraine, US-China tensions, energy prices, container availability - without converting any of them into a number, a trigger, or an operational decision. A risk that is not priced is not managed. A risk that is not paired with a pre-decided action is not even a risk: it is anxiety in PowerPoint form.

The deck succeeds at one thing. It allows the board to record that the risk was "considered". It does not produce a company that is harder to break.

The redesign work begins where the deck ends.

The one concept underneath

Strip away the apparatus and the entire supply chain resilience conversation reduces to a single operational principle: resilience is a design property of the network, not a budget line in procurement.

A supply chain is resilient because its physical, contractual, and informational architecture was deliberately built to survive a defined set of shocks. It is not resilient because procurement holds an extra week of safety stock, or because the CEO can name three alternative ports. Those are tactics. The design property is upstream of the tactic.

This is the same diagnostic move the two previous Field Notes made in different domains. Structure is upstream of growth. Priority is upstream of execution. Network design is upstream of supply chain risk. In each case the leader who treats the surface as the problem ends up adding tactical work to a structural failure - and the structural failure absorbs the tactics without changing shape.

The implication is uncomfortable. If resilience is a design property, then most European distributors are running supply chains that were never designed for the post-2024 environment. They were optimised for the pre-2024 one - globalised, low-tariff, lane-stable - and then patched. A patched optimisation is not a redesign. It is a delayed redesign.

The three forces that have repriced the perimeter

Three structural forces have rewritten the operating environment for European distributors over the last thirty months. Each is well-known in isolation. Few distributors have woven them together into a single coherent design conclusion.

The lane shock. The Red Sea rerouting that began in late 2023 is no longer a temporary disruption. The Cape of Good Hope detour added roughly fourteen days and thirty to forty per cent to the Asia–Europe lane cost - and that elevated cost has held. The Panama Canal drought added a parallel signal on the other side of the world. The lesson is not "the Red Sea is risky". The lesson is that the assumption underneath European distribution since the 1990s - that primary maritime lanes are stable enough to be treated as fixed infrastructure - no longer holds. A distributor that has not modelled its top three lanes against a twelve-month closure has not done the work.

The tariff shock. The US Section 301 tariffs, the EU CBAM, the anti-dumping measures on Chinese EVs and steel, and the constant background uncertainty around the next round of trade measures have made the cost of crossing a border a strategic variable rather than an administrative one. A 25 per cent tariff applied overnight to a category that represents 12 per cent of cost of goods sold is not a margin event. It is a strategy event. The distributor that has not stress-tested its top revenue lines against a single-step tariff increase has, structurally, given a third party the right to reprice the company's economics without warning.

The nearshoring repricing. Capacity in Morocco, Turkey, Poland, Czech Republic, and Romania has been expanding deliberately since 2020, with a clear acceleration after 2022. The decision to nearshore is no longer a sentiment-driven response to anti-globalisation politics. It is, increasingly, a clean arbitrage: shorter lead times, less exposure to lane shocks, fewer tariff layers, easier compliance, currency baskets that move differently from the dollar. The distributor that treats nearshoring as a story rather than as a costed operational option is leaving margin on the table that competitors are already collecting.

These three forces do not stand alone. They compound. A lane shock makes a nearshore alternative cheaper than the route it replaces. A tariff shock makes a single-source Asian supplier more expensive than a dual-sourced European one. A nearshore capacity build-out makes the redesign physically possible - there is somewhere to redesign to. The distributor that holds all three forces in mind at once sees an emerging design space. The distributor that holds them sequentially, one PowerPoint at a time, sees only problems.

The dual lens - cost-to-serve and cost-of-failure

The classic supply chain conversation runs on a single axis: cost-to-serve. Lower the cost per unit moved. Optimise the network for unit economics. Squeeze the working capital. The dominant question is how much does it cost when it works?

This is necessary and insufficient. The 2024 environment has made it sufficient only when paired with a second axis: cost-of-failure. What does it cost when it does not work? How much EBITDA is at risk if a primary lane closes for twelve months, a top-three supplier becomes non-deliverable for a quarter, a tariff repricing arrives without warning, or a key customer's demand drops thirty per cent for two quarters?

The cost-to-serve curve and the cost-of-failure curve do not move together. A network optimised purely for cost-to-serve is, almost by construction, fragile on cost-of-failure. The cheapest sourcing route is usually the most concentrated, the most lane-dependent, and the most tariff-exposed. Resilience is, in operational terms, the price you pay on the cost-to-serve axis to buy down the cost-of-failure axis. It is a deliberate trade, not an absence of optimisation.

The leader who runs only on cost-to-serve will be efficient until the moment the shock arrives, and then will be exposed publicly to a risk the board did not know was there. The leader who runs only on cost-of-failure will be expensive in calm conditions and never get the chance to deploy the resilience design they paid for. The work is to run both lenses at once - and to make the trade visible, in numbers, to the people who govern the company.

The four-shock stress test

What follows is not a generic risk register. It is the operational version of the dual lens, refined into a methodology that a leadership team can run in three structured sessions over four to six weeks. The methodology has five steps and is built around four named shocks. Its purpose is not to predict the future. Its purpose is to force the company to pre-decide its response to defined failure scenarios - so that, when one of them arrives, the operating decisions are already made.

Step 1 - Map the actual flow, not the org chart of procurement. The first session draws the physical and contractual flows of the top revenue lines by margin contribution. Where does the unit come from at the sub-tier level. Which ports. Which lanes. Which incoterms. Which contractual termination rights. Most leadership teams discover, in this session, that the document they thought represented their supply chain is a procurement structure, not a flow diagram. A risk you cannot draw is a risk you cannot manage. The output of step one is a single page per top revenue line, showing the actual physical route, the contractual terms, and the points at which the flow can break.

Step 2 - Assign a price to every chokepoint. Every identified single point of failure receives two numbers: a probability of occurrence over the next twenty-four months, and an expected EBITDA impact if it occurs. The probabilities will be wrong; that is acceptable. What is not acceptable is a chokepoint that the team is comfortable carrying without ever attaching a number to it. The discipline is not statistical precision. The discipline is the refusal to manage risk without numbers. Numbers without anchors are noise; risks without numbers are theatre.

Step 3 - Run the four shocks in sequence. Four named scenarios, each tested against the mapped network. (a) A lane shock: the primary Asia–Europe lane closes structurally for twelve months. (b) A tariff shock: a 25 per cent tariff is applied overnight to a category representing more than ten per cent of cost of goods sold. (c) A supplier shock: a top-three supplier becomes non-deliverable for ninety days. (d) A demand shock: a top-three customer or category drops thirty per cent for two consecutive quarters. For each, the team writes down - in writing, on the record - what the company would do in week one, month one, and quarter one. If the answer to any cell is "we would convene a task force", the test has already failed.

Step 4 -Identify the cheapest first move. The temptation after step three is to redesign the entire network. The discipline is to refuse that temptation. The redesign is a multi-year programme; the first move is what is done in the next ninety days. The first move is almost always small, specific, and unglamorous. Dual-source the top three SKUs by margin contribution. Pre-qualify a nearshore alternative for the single highest-tariff category. Renegotiate inventory terms with the supplier carrying the largest single-source exposure. Resilience built one SKU at a time, in the order of margin sensitivity, costs five to ten per cent of the revenue under protection, applied as catastrophe insurance - and pays for itself the first time a shock arrives.

Step 5 - Build the dashboard the board can read in ninety seconds. Five numbers, updated monthly, reviewed at every board meeting: (1) single-source SKU count in the top decile by margin contribution. (2) Tariff exposure as a percentage of cost of goods sold, by category. (3) Lane concentration index - share of revenue dependent on the top two maritime lanes. (4) Days of supply on critical inputs. (5) Working capital tied up in safety stock, with year-on-year trend. A board that cannot answer those five questions about the company it governs is not governing the supply chain. It is hoping.

The four-shock stress test is not a one-off exercise. The first cycle is a redesign baseline. The second cycle, run six months later, is the proof of structural improvement. The third cycle, twelve months out, is the operating cadence - embedded in the annual planning rhythm, owned by the COO or operations lead, reported to the board on the same dashboard, with no further deck required.

The strategic decisions this changes

A resilience design that lives only inside procurement is not a redesign. The four-shock stress test, run honestly, changes decisions in at least six places upstream of operations.

Capital allocation moves toward demand, not toward port. Warehouses sized and located for proximity-to-customer rather than proximity-to-arrival absorb lane shocks at lower cost. The capex case for a regional distribution centre changes shape when the cost-of-failure axis is added to the model.

Working capital policy moves from Finance to Operations. Safety stock is no longer an inventory inefficiency to be minimised. It is a deliberate purchase of resilience, sized against named shocks. The policy is owned where the trade-off is made - in operations - and reported to finance as a designed position, not a tolerated overhang.

Pricing architecture is built upstream of the shock. The contractual right to pass through a tariff or freight surcharge has to exist in the customer contract before the shock arrives. A distributor who only discovers tariff pass-through clauses are missing on the day a 25 per cent tariff is announced has, by then, already absorbed the first ninety days of the impact.

M&A is reread as a resilience instrument. Acquiring a nearshore manufacturer, a regional warehousing footprint, or a complementary supplier is, in the post-2024 environment, frequently a cheaper way to buy resilience than to build it. The strategic M&A case stops being only about growth and starts being equally about exposure reduction.

Procurement reports into the CEO, not into Finance. A supply chain whose design is now a strategic variable cannot be governed inside a function whose primary metric is cost. The reporting line is a small structural change with a disproportionate effect on which trade-offs get made.

Resilience becomes a standing board item. Not an annual risk register exercise - a quarterly review against the five-number dashboard, with the same seriousness as the P&L. Boards that do not impose this rhythm on their distributors are, structurally, signing off on a risk they have chosen not to see.

The harder discipline

Most of what the four-shock stress test asks the leadership team to do is not new. The frameworks for supply chain resilience have existed in academic and consulting form for at least fifteen years. What was missing, until 2024, was the conviction to pay for them when they appeared expensive - when the cost-to-serve axis was the only axis being measured, and the cost-of-failure axis was a footnote on someone else's deck.

After 2024 the trade looks different. The cost-of-failure axis has stopped being abstract. The companies that paid for redundancy in 2022 are now carrying lower freight inflation, lower tariff exposure, and lower lane concentration than the ones that did not. The proof point is no longer rhetorical. It is in the P&L of the early movers.

The harder discipline is not the methodology. The methodology can be run in six weeks by any competent leadership team. The harder discipline is the willingness to act on what the methodology reveals - to accept that the network the company built in calmer conditions is no longer fit for purpose, and to commit to the multi-year work of rebuilding it while still running it.

That work is unaccompanied. It is not delegable. It is also the work that compounds - the only work, year over year, that actually changes what the company can survive.

The next Field Note picks up the parallel governance question: how a board should set the agenda for a distributor operating in a permanently more volatile environment, and what the chair has to demand of the CEO before the next shock arrives.

Ruben Claessens is CEO of an industrial group in Belgium and founder of LIDI Partners BV. Field Notes is the public archive of his work on operatorship, governance, and Belgian mid-market reality. Published deliberately, on a monthly cadence.

— Brussels, May 2026