The hidden cost of supply chain disruptions
The hidden cost of supply chain disruptions gets lost in expedited freight, excess stock, stockouts and meetings that drag on. Added together, entire margin points disappear.
By Mansour Niang, CEO & co-founder, Clevizio·Published June 18, 2026·7 min readKey takeaway
Poorly absorbed supply chain disruptions cost between 4 and 12 margin points a year, spread across expedited freight, excess stock, stockouts and crisis meetings. Because none of these costs is labeled "disruption" in the books, nobody adds them up. The fix starts with putting a number on them, line by line, before buying another tool.
A cost that shows up on no line of the P&L
When a supplier falls behind or a demand spike hits, the response comes at a price: expedited freight, excess stock tying up capital, lost orders. Yet none of these expenses carries a "disruption" label in your accounts. They are spread across existing lines, and nobody adds them up.
4 to 12 margin points, depending on your exposure
Across the scopes we have studied, the annual cost of poorly absorbed disruptions amounts to between 4 and 12 margin points. The range depends on how volatile your demand is, how reliable your suppliers are and how quickly you make decisions. The longer the decision takes, the higher the bill.
| Cost item | What it costs | Where it hides in your accounts |
|---|---|---|
| Expedited freight | Extra freight cost to make up for a delay | Transportation line, with no "disruption" label |
| Excess stock | Tied-up capital and storage costs | Working capital and logistics costs |
| Stockout | Lost sales, penalties, credit notes | Missing revenue |
| Crisis coordination | Repeated meetings and trade-offs | Spread across payroll |
What research says about the cost of disruptions
Research confirms the order of magnitude, and goes beyond it. McKinsey estimates that disruptions cost companies the equivalent of 45% of one year's profits over a decade. As early as 2021, Interos put average losses at $184 million per organization per year, and 94% of the companies surveyed reported a negative impact on revenue. The effect also travels downstream: every dollar lost by a disrupted company generates about $2.40 in missed sales for its customers. And the phenomenon is accelerating, with 38% more disruptions recorded in 2024 than in 2023, according to Resilinc. Your own exposure depends on your industry and your network, but the trend does not reward a wait-and-see approach.
Why nobody sees this cost
The reason lies as much in how accounting is organized as in habit. Expedited freight lands in the transportation budget, excess stock in working capital, the lost sale nowhere at all, and the hours spent in crisis meetings in a payroll line that breaks nothing down. Each department sees its share of the extra cost and treats it as the normal price of doing business, while financial control files these gaps as variances without tracing them back to their common cause. So nobody has the full picture, and a cost nobody sees never triggers an action plan. Yet leadership teams that have quantified it once never go back, because the number changes the conversation in the executive committee.
The real problem is not the forecast, but the decision that follows
Even a good forecast is wrong about one time in five, a ceiling we explain in our manifesto on the perfect forecast. Gaining 2 or 3 points of accuracy therefore does not change the game: margin is destroyed precisely in the cases the model did not see coming. What matters is the quality of the decision made when the forecast no longer holds.
How to put a number on your disruptions, item by item
The exercise takes only a few steps and requires no IT project. Pick a representative scope over the last six months. Go back through your expedited freight orders and isolate the ones that made up for an unexpected event rather than served a customer promise. Compare your actual average stock with your target stock and value the gap using your carrying cost rate. List the documented stockouts, along with the associated lost sales and penalties. Finally, add the time spent in crisis meetings, valued at the participants' fully loaded cost. The total is always a surprise, and that figure is what then lets you make investment trade-offs with full knowledge of the facts.
Quantify in order to decide
The first step is to put a number on the cost of your disruptions, before buying yet another tool. Once you know that figure, the trade-off becomes simple. That is exactly what a diagnostic simulation does.
This article starts from a conviction: the perfect forecast doesn't exist, what matters is the decision that follows.
- A cost that shows up on no line of the P&L
- 4 to 12 margin points, depending on your exposure
- What research says about the cost of disruptions
- Why nobody sees this cost
- The real problem is not the forecast, but the decision that follows
- How to put a number on your disruptions, item by item
- Quantify in order to decide
Clevizio
Clevizio is the decision layer that plugs into your existing tools: it detects disruptions, simulates your options and keeps a record of every trade-off. See how the decision copilot works.
Mansour Niang
CEO & co-founder, Clevizio
A question about your disruptions? Book 30 minutes with me to estimate what they really cost you, with no commitment.
Frequently asked questions
How can I estimate the cost of my disruptions?
By reconstructing, over a representative scope, the extra costs generated by the gaps between forecast and actuals: expedited freight, excess stock, stockouts, time spent. A diagnostic simulation quantifies it in 30 minutes.
Is a better forecasting tool enough?
No. No forecast is 100% reliable. The issue is the decision made when it is wrong, not additional accuracy.
What is the average cost of supply chain disruptions?
Studies converge on high figures: McKinsey puts the loss at 45% of one year's profits over a decade. In 2021, Interos estimated average losses at $184 million per organization per year. For a mid-market company, our observations put the cost of poorly absorbed disruptions at between 4 and 12 points of annual margin.
Finally put a number on what disruptions cost you every year.
Let's start by estimating what your disruptions really cost you. It's free, it takes 30 minutes, and you leave with a figure nobody in your company knows today.