The Most Dangerous Supply Risk of All

What's the worst supply chain risk known to man? Bird flu -- nope, it has not figured out a permanent way to leapfrog to mammals, at least not yet. How about the Axis of Evil, you say? Given the individual and highly personal delusions of Kim Jong-il and Ahmadinejad, I'd say there's more evil than axis at this point. And while the two of them -- and toss in vote rigging Hugo while you're at it -- are certainly a longer term threat to supply chains worldwide, the very near term is probably less of a concern. But what about physical infrastructure -- or the lack of it -- throughout developing economies like India? That, too, in my book, is but a temporary risk issue that we'll look back on when we recall the dirt-road days of the past twenty years from now.

So what is the most dangerous supply risk of all known to man? I'd say that it is man itself. But this time, in the form of government regulation -- even if the regulation or public policy, is in fact, the right thing in the end, for all of us. Consider how, according to an esteemed Gartner source quoted in this article that the, "Laws designed to curb the environmental impact of computer parts will disrupt complex global supply chains unless companies themselves are more stringent." The problem is that countries across the globe are adopting different standards at varying paces which could very well result in "longer lead times, part shortages and rising prices for non-compliant parts over the next two years." In the article, Gartner analyst Meike Escherich suggests that companies should adopt the most stringent laws as standard operating procedure, lest the tougher laws of one country shut down an entire supply chain.

And don’t think for a minute that Asian countries will be any less strict when it comes to enforcing environmental policies for production and waste disposal. According to the article, "A spate of new green manufacture legislation is due to be enacted across the world. China's law, which Gartner says is stricter than Europe's, comes into force in March next year. Japan has had an active law for six years, and Gartner says that South Korea, China, Australia and California will soon adopt even more green manufacturing legislation."

So perhaps when it comes to supply risk, we're our own worst enemy after all.

Jason Busch

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