Summary of DNB webinar on Supply Chain Risk in Global Environment


Global operations dictate being subject to issues beyond your supply chain control.  Supply Chain recent history demonstrates impact of items beyond suppliers control: (i) shortening of supply chains - due to oil price impacts, > transport costs, piracy impacts and (ii) diversification of supply chain - japanes quake, and economic issues like inflation and currency volatility.

Initial assessment of 3 areas demonstrates need to look beyond supplier centric models for risk purposes, take into account the global environment, and monitor specific country risk.

 Latin America: still seeing growth.  political risks higher due to state involvement in govts (Venezuela) and larger state hand in hydrocarbon sector (Brazil) may add to uncertainty.  Uncertainty impacts imports, exports, payments, and overall trade decisions. Ability to improve predictability of supply chains of substantial benefit.

Western Europe: Growth highly uneven, and debt risks for certain countries dominate.  Public sector links in the private sector increase risks (uncertain or unpredictable actions). Concern that sovereign banks will multiple debts associated with few countries (Portugal, Ireland, Greece, Spain).

Asia/Pacific: best overall growth opportunities.  Concerns of potential internal inflaction, likely increase in interest rates.  Market risk premiums and a balance of payment problem(s).

Often visible signs evident, but ignored...ability to integrate risks (political, economic and commercial) will improve stability and predictability of supply chain. Identifying specific risks (compliance, capacity, regulatory, delivery cycles, etc.) and use of information management on how to provide relevant data to all players, will identify mitigation strategies (countermeasures) most likely to succeed.