When your supply chain breaks, you lose revenue, market share, shareholder value and the integrity of the brand – damage against which you cannot insure. Given such financial stakes, here are 9 criteria you should consider to make your supply chain resilient. Your business is growing and you’re starting to look at locations for your next manufacturing plant. The new facility needs to be close to your customers and convenient for shipping with affordable labor, real estate and taxation. Your CFO and supply chain manager create a scorecard reflecting this set of criteria. They evaluate destinations and pick the winner. You sign off. If you haven’t looked deeper, however, you might be missing vulnerabilities that are making your supply chain fragile and putting your business at risk. Fragility is not what you want: When your supply chain breaks, you lose revenue, market share, shareholder value and the integrity of the brand – damage against which you cannot insure. “Strong economies contribute to resilient supply chains.” Given such financial stakes, here are 9 additional criteria you should consider to make your supply chain resilient. GDP per capita . Strong economies contribute to resilient supply chains. Per capita gross domestic product is useful when comparing one country or one state to another, because it shows relative performance. Political risk . Countries like Ukraine and Greece are experiencing conflict, upheaval and attendant economic issues that can jeopardize a business. What are the political conflicts in the countries you’re considering for a new plant? Also, do these regions have histories of terror or signs of increasing threats? (The World Bank offers helpful insights on political risk.) Oil intensity . How heavy is oil consumption in the regions you’re considering? The greater the consumption, the more vulnerable a country is to an oil shortage, […]
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