Supply Chain and Risk Management: Identifying Global Hot Spots and Social Models

The ninth concept that I introduced in my “what’s next” at the ISM Risk Conference in July was that “identifying the next global hot spots and harnessing social approaches to understanding the shifting political and world landscape” can provide a distinct advantage to risk management. The highest-level example here is moving beyond just economic forecasts (or having a chief economist in a company, however valuable that can be in and of itself) to develop a perspective, informed by traditional sources of intelligence, as well as on the ground assets, including suppliers. For the former, one of my favorites is Statfor.

Such visibility can provide an integrated view into a range of areas to help forecast where organizations need to pay close attention, such as what countries will be hit hardest by economic uncertainty, volatility, and change (banking crises, high levels of unemployment/unrest, defaults, etc.). That’s one extreme of how to apply this type of visibility. Another is having visibility into such activity as potential and emerging supply chain regulations, CSR, and traceability that local regulation and labor practices/policy can bring. By staying in tune with local intelligence assets as well as social tools, companies can discern the potential for coming regulation long before policy becomes law. A lobbying ear to the ground would help here as well!

There’s no doubt that the ability to proactively identify hot spots and regions of concern also stretches to the political, including, for example, policy and practice based on the trade of raw materials (e.g., rare earth metals in China) and punitive responses to protectionism (e.g., tariffs). And, of course, it can also help to have an informed intelligence perspective on the potential for traditional (e.g., Iran, Iraq, Afghanistan) conflict as well as general civil unrest and the potential for terrorism to disrupt supply chains.

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