In a recent article written by Adam Leach and posted on the SupplManagement.com website, our readers are reminded that businesses in emerging economies (i.e. China and India) have very high economic risk exposures to natural hazards because these nations lack the capacity to really cope with the impacts from and the effects of major natural disasters.
While that may seem to be just common sense logic, nonetheless, the BRIC group of economies – Brazil, Russia, India and China – all are expected to increase their share of economic output by +33% by 2020. And, therin may lie increased levels of risk associated with those forecasted levels of additional purchasing activities.
Hopefully, the buyers of those products and services will be doing their total risk management analysis homework to properly evaluate and mitigate relevant risk factors related to those purchases. The goal certainly would be to mitigate all risks and maintain proper contingency plans — and, to do that requires proper information input from reliable sources which are familiar with such supply chain management issues.
To begin the process of gathering such relevant information, purchasing and supply chain risk management team members should look into viewing The Natural Hazard Risk Atlas 2011 report, available on the Maplecroft website.
The Maplecroft report’s ‘Socio-economic Resilience Index’ ranks countries around the world in terms of the degree of risk created by their preparedness levels to deal with such natural hazard or disasters. The level of risk for this analysis was calculated by assessing a number of factors, including economic robustness, strength of governance, how well infrastructures were established, disaster preparedness levels and existence or non-existence of necessary building construction and safety regulations. While the report ranks the US and Japan as rather low-risk countries, China and India received high-risk ratings.
If you prefer to learn more about current debates and discussions which attempt to address these natural disaster and supply chain management related threats from a video content perspective, then you may want to view a recording of a recent debate session titled “Disaster Recovery – Lessons for Supply Chains”.
If applicable, please pass this information along to those supply chain management team members in your organization.
Photo courtesy of the Saber Middle East Blog (saber-mena.com)