Geo-political Supply Chain Risk – Download Our Latest Risk Briefing Here

In the fifth (and last) of our series of short papers about supply chain risks, written in conjunction with risk solution platform providers riskmethods, we look at what we define as geo-political supply chain risk.

It's called Geo-political Risk – An Informed Global View Is Essential.

Those risks range through major world events such as wars between states and revolutions, terrorism and political unrest, as well as apparently less dramatic issues such as protectionism and tariffs. All of these though can have a major effect on businesses and therefore their customers.

It is often hard to predict where these events may fall, and even the experts can look pretty silly at times!  Egypt was named “outsourcing destination of the year” at the 2010 European Outsourcing Association Awards. In 2016, it won a similar award at the Global Sourcing awards. But the Arab Spring (which was predicted by very few “experts”) and the Egyptian Revolution of 2011 saw around 1000 people killed, and a military junta assume power. Egypt then elected an Islamist-led government from 2012/13, followed by another military coup-d’état, then a restoration of democracy in 2014. During this period, many manufacturers (including BMW) had to suspend operations at times in the country.

Who knows what might happen in 2017 in terms of North Korea, or Turkey or Venezuela? Even countries like Poland are displaying some worrying political signs which could fairly quickly make that a less stable country from which to source. And that's even before we consider the growing mood of protectionism, which may cause a major rethink for many firms in terms of how they structure their global supply chains.

It is impossible to predict accurately what will happen in terms of these geo-poltical questions, but in this short paper, we look at some of the issues and drivers, what the implications can be for buyers, and most importantly, what steps can be taken to best manage this type of risk. There is no magic bullet here, but there are steps that procurement and supply chain professionals can take to manage this risk category better.

You can download our paper here, free on registration.

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