Malaysia Airlines plane crash in Ukraine – was it shot down?

We had a 'down the procurement pub' ready to go this morning but the levity doesn't seem quite appropriate now after the apparent shooting down of the Malaysian Airlines plane over the Ukraine yesterday.

Whatever the consequences, and whatever the cause turns out to be, first thoughts go to the victims, their family and friends - 300 lives gone just like that. At a time when my business colleagues and some close family members are taking long-haul, inter-continental flights, it is a reminder of the inherent dangers around traveling for hours in a small flying tube. Our condolences to everyone caught up in the tragedy.

But anyone interested in business, politics or economics will also inevitably be thinking about what will happen next. It is reported that amongst the 41 nationalities represented in the casualty list, 23 US citizens are dead, so how will Obama react if it is shown that  pro-Russian rebels in the eastern Ukraine are responsible for shooting down the plane?

At the very least, we are likely to see calls for stronger action against Russia in terms of sanctions, financial constraints and restrictions on Russian citizens, including business people. Up to now, Europe has been pretty half hearted in terms of taking action. The City of London is terrified of losing Russian oligarchs' billions (as is the football Premiership), and many European  countries are dependent on gas supplies from Russia. But now the need for a real response might outweigh the risk of the economic consequences, and we may see more significant steps taken - that's also a test for the UK's brand new Foreign Secretary, Philip Hammond.

Of course, a negative effect on London house prices might be the least of our problems if this drives an escalation in military action. Let's not speculate too much on that for now, but in terms of procurement and supply chain risk management, there are some steps procurement people need to be considering urgently.

What exposure is there to suppliers in Ukraine and the region, whether raw materials, outsourced services or sub-contractors? How might currencies react? What about possible effects on our customers - might that have knock on effects on supply chain requirements? An urgent piece of risk analysis is needed for many organizations this morning.

And whilst we're on the topic of risk assessment, it does seem surprising that commercial planes were flying over what is virtually war territory. It’s a bit late now to re-route flights – why wasn’t that done weeks ago?

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