Dive Brief:
- Mutual insurance company FM Global released the 2017 FM Global Resilience Index Wednesday, which aims to help companies site facilities, choose suppliers and evaluate supply chain vulnerabilities.
- The index evaluates factors like political risk, control of corruption, infrastructure, fire hazard exposure, etc., to rank countries' resilience. The U.S. consistently ranked in the top 20 for enterprise resilience.
- New risk analyses on supply chain failures, cyber attack and natural hazards revealed apparel manufacturing hub Bangladesh ranks toward the bottom of the list (111 of 130), while Germany ranks among the top (5 of 130) for its companies' strong visibility into their chains.
Dive Insight:
The FM Global Index is a useful tool for visualizing risk, and understanding the factors that make certain countries more vulnerable than others. Overall, the tool analyzes data to produce a resilience rank on three main factors: economic, supply chain and risk quality — although they are all related.
As an example, the index splits the United States into three regions given geographic (rather, whether coastal or not) and economic differences: Central, East and West, ranked 9, 10, and 18 overall, respectively. Why the difference?
A closer look at the data reveal while the regions' economic and supply chain scores are identical, the regions' risk quality scores differ greatly. In that category, the Central region earned the top rank, whereas the East ranked seventh, and the West ranked 25th overall. It all comes down to exposure to natural hazards: while the East is subject to high wind hazards, and the West to earthquakes, the Central region has a more limited exposure, Bret Ahnell, executive vice president at FM Global, told Supply Chain Dive. The U.S. stands out, however, with its top 5 ranking in fire risk and supply chain visibility scores.
Overall, the index provides a model for understanding risk factors worldwide. "Operational managers — such as the risk or insurance manager, the supply chain manager, or the plant or facilities manager — can access the index to easily find where vulnerabilities in different countries may lie," Ahnell said.
