How to handle supply chain disruptions: A financial playbook for CFOs

Supply chain disruptions aren’t new. But when you're managing suppliers across currencies, each disruption compounds — operational delays trigger FX exposure, payment timing uncertainty, and erode margins. So what can you actually control?

The short answer: your currency exposure, your payment visibility, and how closely you monitor supplier health.

In this guide, we'll cover the primary causes of supply chain disruptions, the financial impacts on your business, and the practical strategies to keep your margins intact. Consider this the playbook to help CFOs and finance leaders protect margins and build financial resilience when suppliers, logistics, and global trade all seem to be working against you.

What are supply chain disruptions?

A supply chain disruption is any event that interrupts the normal flow of goods, materials, or information through your supply network. These disruptions can hit at any point, from raw material sourcing and manufacturing to logistics and final delivery. And the scope of disruption has expanded beyond individual incidents.

According to recent data, major disruptions now occur on average every 3.7 years and typically last over a month. In 2024, 80% of organisations reported experiencing supply chain disruptions that affected their operations.

Why do they keep happening?

The drivers are increasingly global and interconnected, which means a problem in one region quickly becomes everyone's problem. Understanding these causes is the first step toward building supply chain risk management strategies that actually work.

What causes supply chain disruptions?

The causes fall into four broad categories: geopolitical, environmental, technological, and operational. Any one of these can cascade into the others, creating compounding effects that are difficult to predict.

External factors like geopolitical tensions and global trade shifts

Geopolitical tensions have become the dominant driver of supply chain instability. The rules change faster than procurement teams can adapt.

Consider the 2025 US tariff announcements, with proposed rates of 46% for Vietnam, 32% for Indonesia, and 24% for Japan. New regulations and new laws appear with little warning, and trade agreements that seemed stable suddenly aren't. Even if your direct suppliers aren't affected by a trade war, their suppliers might be.

Borders close, trade lanes shift, and suddenly your carefully negotiated contracts become liabilities.

Recommended reading: For a deeper look at how businesses are responding, take a look at our guide on how to navigate global trade disruption.

Natural disasters and extreme weather

Natural disasters have always disrupted supply chains, but extreme weather events are increasing in both frequency and severity. In 2024, adverse weather and natural disasters ranked as the third most common cause of supply chain disruption globally.

A single hurricane can shut down manufacturing facilities across entire regions. Even when your direct suppliers aren't affected, the significant impact on shared logistics infrastructure extends lead times across the network.

The disruption caused by natural disasters extends beyond the immediate event. Insurance claims, rebuilding timelines, and capacity constraints create aftershocks that last months.

Cyber attacks and technology failures

Cyber attacks have become a predominant risk in modern supply chain operations. Ransomware can halt production, corrupt data and expose sensitive supplier information.

Technology failures aren't just external threats either. Internal system outages and data integrity issues create similar disruptions. Ironically, the same technology that powers predictive analytics also creates new vulnerabilities.

For example, consider what would happen if your ERP goes down. Payments freeze, orders stall, and visibility disappears. The more connected your systems are, the more points of failure there are.

Labour shortages and transportation bottlenecks

Labour shortages and logistics bottlenecks have become structural, not cyclical. Maritime shipping delays compound across the entire network, with one port backup creating weeks of downstream delays. Freight rates spike during capacity constraints, directly impacting procurement costs.

Common bottleneck points include:

• Port congestion and container shortages
• Driver and warehouse worker shortages
• Air freight capacity limits during peak demand

Each bottleneck creates cost pressure and payment timing uncertainty that finance teams must absorb.

What are the effects of supply chain disruptions on business continuity?

The effects tend to hit three areas: direct costs, currency exposure, and customer relationships. And plenty of businesses underestimate how these impacts compound.

Let’s take a look at each of these in more detail.

Increased costs and margin erosion

The most immediate effect of supply chain disruption is that costs go up.

Raw materials pricing becomes volatile, and procurement teams pay premiums for available inventory. Higher prices get passed through the chain or have to be absorbed by your margins.

Supply chain disruptions lead to increased shipping costs when available capacity becomes scarce. FX spot rates can spike during acute shortages, and those costs rarely come back down quickly.

But cost increases are only the first-order effect. Currency movements often compound the damage.

Supply shortages and currency volatility in parallel

Disruptions rarely hit in isolation.

For example, EUR/USD swung nearly 10% in early 2025. If you were paying suppliers in dollars during that swing, you were experiencing double the impact: higher input costs combined with an unfavourable exchange rate. That means margin compression from two directions simultaneously.

You're paying more for materials and getting less value for each euro spent.

Industries with thin margins feel this strain first, but it affects every business with international exposure. When the global economy shifts, demand patterns change, supply constraints emerge, and currency moves happen at the same time.

Delayed deliveries and customer relationships

On top of delayed deliveries impacting operations, disruptions can damage customer trust.

Empty shelves or missed deadlines harm customer relationships, reduce satisfaction, and damage brand loyalty in ways that take years to rebuild. Certain products are more vulnerable as well, like complex assemblies, custom orders, and seasonal goods, where timing is everything.

The challenges extend beyond immediate delays. Customers find alternatives. Contracts include penalty clauses. Operations teams scramble to manage exceptions.

Can you recover that trust? Sometimes. But the financial cost of recovery is often higher than the cost of prevention.

Why CFOs are becoming supply chain architects

More and more, the CFO role is expanding beyond financial reporting into supply chain architecture. Finance leaders are no longer just reacting to disruption — they’re actively designing systems to mitigate the impacts.

According to PYMNTS Intelligence, 60% of firms addressed tariff challenges by tightening coordination with partners. This isn't about replacing procurement teams. Rather, it's about enabling informed decisions that procurement can't make on its own.

What do CFOs uniquely control?

Currency exposure across the supplier base. Financial stress testing for disruption scenarios. Working capital optimisation tied to payment terms. Financial metrics that connect supply chain health to business leaders. These all require management expertise that operations leaders don't always have — but modern CFOs do.

The bottom line? Supply chain resilience is becoming a finance function.

4 risk management strategies for global supply chains

So what should be your key actions moving forward?

In this section, we'll cover four strategies that build structural resilience and discuss why all four working together is better than choosing just one strategy to adopt.

1. Diversify suppliers across regions and currencies

Supplier diversification is table stakes, but most companies stop at geography. The strategic approach means diversifying across currencies too, not just countries.

If all your suppliers invoice in USD, you have concentration risk even if they're in different regions. A proactive approach means building relationships before you need them.

Maintaining a diverse supplier portfolio allows organisations to switch suppliers in less impacted regions during disruptions. This creates supply chain resilience and natural currency balancing through currency risk strategies.

Diversification to mitigate disruption requires ongoing relationship management, not one-time sourcing.

2. Build inventory buffers for critical materials

Businesses are increasingly adopting "just-in-case" strategies like strategic stockpiling to protect against potential disruptions. The trade-off is real: inventory buffers tie up working capital, but shortages cost more.

The question isn't whether to buffer. It's which materials and how much to buffer.

Use rolling forecasts to model scenarios and optimise buffer levels for different risk profiles. Because manufacturing and production can't wait for procurement to find alternatives during a crisis.

3. Use real-time data to spot potential disruptions early

Real-time data is only valuable if you know what signals to look out for. Emerging technologies like predictive analytics can flag supplier issues before they become crises.

A few early warning signals CFOs should monitor:

• Cash flow metrics showing payment delays from your customers

• Supplier lead time changes

• Freight rate spikes in key corridors

• E-commerce demand signals that predict capacity strain

Real-time insights let you adjust before the disruption hits your operations. The goal isn't predicting every disruption — it's improving your reaction time.

4. Monitor supplier financial health for warning signs

Your suppliers face the same external factors you do, and their financial health affects your operations directly.

According to RapidRatings, 39% of private company suppliers could move to a higher risk rating under tariff stress. That's a crucial signal for any CFO managing vendor relationships.

Warning signs to monitor here would be:

• Increased Days Payable Outstanding (they're delaying their payments)
• Communication pattern changes
• Personnel turnover in key roles
• Declining credit ratings

These signals are essential for early intervention. Monitoring supplier risks requires resources, but it's crucial to ensure resilience. Regular accounts payable analysis reveals supplier payment behaviour changes before they become your problem.

How to protect margins with FX risk management

Here's the financial toolkit for supply chain resilience: three capabilities that give CFOs control. Locking rates, holding currencies, and tracking payments work together to create cost certainty during uncertainty.

Lock in exchange rates with forward payment contracts

When you can't control supplier prices, you can still control what those prices cost in your home currency.

Forward payment contracts let you lock in exchange rates for future payments, effectively removing currency uncertainty from the equation entirely. If you're working with iBanFirst, you'll have three types to consider:

• Fixed forward payment contracts work when you know exact dates and amounts

• Flexible forward payment contracts work when amounts are known but timing varies

• Dynamic forward payment contracts lock a floor rate while keeping upside potential

The right choice depends on your payment patterns and risk tolerance. In a volatile world, rate certainty becomes a competitive advantage.

Hold and pay in local currencies with multi-currency accounts

Multi-currency accounts create flexibility, which means smoother supply chain operations.

Hold supplier currencies without immediate conversion, then pay in their local currency when timing is right. This creates natural currency matching. If you earn EUR and pay EUR suppliers, you've reduced exposure without any active management.

For example, a German importer holding USD can wait for better rates rather than converting the moment funds hit their account. Plus, paying suppliers in their local currency often leads to better terms and faster processing.

Track international payments for supplier visibility

When payment tracking amounts to "it'll arrive in 2-3 business days", suppliers get nervous and relationships strain. True payment visibility reduces friction during chain disruptions.

What payment visibility enables:

• Proactive communication with suppliers ("your payment will arrive on Tuesday")

• Faster issue resolution when problems occur

• Evidence trail for dispute resolution

Visibility builds trust, and trust matters when supply is constrained. During disruptions, suppliers prioritise customers they trust. Payment transparency earns that priority.

The CFO's supply chain disruptions checklist

At this point, supply chain disruptions aren't simply one-off events that may happen every few years. In fact, 22% of businesses reported over 20 disruptive incidents over a 12-month period in 2024.

Here's what to review before the next disruption hits your supply chains:

• Currency exposure: What percentage of supplier payments are in foreign currencies? What's covered by forward payment contracts?
• Supplier concentration: Where's your geographic and currency concentration risk?
• Financial health monitoring: Which critical suppliers need closer watching?
• Payment visibility: Can you track international payments in real time?
• Buffer levels: Are inventory buffers adequate for your highest-risk materials?

For global supply chains, especially, this should ultimately become a continuous process, not a one-time exercise. Ideally, you run this review quarterly at least.

Partner with a payment provider you can trust

For CFOs managing international supplier payments, the right financial infrastructure makes the difference between absorbing shocks and amplifying them. That's where providers like iBanFirst come in.

With iBanFirst, you can:

• Lock in exchange rates with forward payment contracts
• Hold and pay suppliers abroad in 25+ currencies with multi-currency accounts
• Track every international payment in real time
• Access human FX specialists when you need expert guidance

Request an account and see how iBanFirst supports supply chain resilience for finance teams managing global operations.