Dive Brief:
- For the sixth year in a row, Switzerland is the country with the most resilient supply chains, according to the 2018 FM Global Resilience Index released Wednesday. The score is based on factors including infrastructure, supply chain visibility and supplier quality.
- On the flip side, Haiti, Chad and Venezuela have the least resilient supply chains.
- Natural hazards pose one of the greatest risks to global companies and supply chains in 2018, Ronnie Gibson, vice president of innovation at FM Global, told Supply Chain Dive.
Dive Insight:
Hurricanes devastated businesses and supply chains in the eastern part of the U.S. last year, but the region's strong resilience score (89 out of 100) produced relatively quick results and rebuilding, getting businesses back up and running.
Unfortunately resilience isn't as strong in every part of the world. For supply chain managers who work globally, understanding resilience is an important part of forming a risk management strategy.
"If you're in an industry that has many component parts from Asia ... you'll be especially interested in infrastructure," Gibson said.
Take Taiwan and the Philippines, for example. Both have significant exposure to natural hazards, particularly typhoons, but their quality of infrastructure are drastically different from one another. Taiwan ranks 22 out of 130 countries for infrastructure quality; the Philippines ranks 109.
"After the typhoon has gone through, what's it going to look like for shipping goods to the ports?" he said.
With Taiwan's better quality of infrastructure, it's likely to recover and rebuild more quickly than the Philippines. For supply chain managers, thinking about how quickly a country can get goods moving again after a disaster could be a factor in making sourcing decisions, Gibson said.
It may seem that if a country has poor supply chain resilience, why bother manufacturing or sourcing there?
For a rare and critical product, there may not be an alternative. Venezuela consistently ranks low on FM Global's index, but the country grows very rare species of plants that are used in the pharmaceutical industry.
"A low ranking country doesn't mean you don’t go there," Gibson said, "Just go there with your eyes open."
