Choosing a supplier or a manufacturing site, and evaluating supply chain operations, are critical tasks for any supply chain operation. Harder still, potential risk is a moving target, with threats both natural and man-made, internal and external to the organization. The threat of cyber attack, potential natural disasters, and possible supply chain failure top the list of risks, according to the 2017 FM Global Resilience Index which was released today.
The index, which is in its fourth year, ranks 130 countries and territories by their enterprise resilience to disruptive events. The online tool, which is freely available, allows users to investigate proactively 12 quantified resilience drivers related to each country’s economic strength, risk quality, and supply chain condition.
This year, FM Global added three new resilience drivers to the index. “We upgraded the index this year to reflect escalating threats that can make a lasting impact on business performance,” said Bret Ahnell, executive vice president, staff operations, at FM Global. “Any good index needs to be updated and improved. We didn’t know where the changes would take us, but it yielded meaningful information.” The new measurements are:
- Inherent cyber risk – Reflects a country’s vulnerability to a cyber attack and its ability to recover.
- Urbanization rate – Serves as a proxy for stress (on water supplies, power grids and other infrastructure) that would be exacerbated by natural disasters such as windstorms, flood and earthquakes.
- Supply chain visibility – Reflects the ability to track and trace consignments across a country’s supply chain.
Using the tool’s information, FM Global has identified the best and worst ranking for countries in terms of overall enterprise resilience. This year, Switzerland took the top spot (from number three last year) for its combination of infrastructure, local supplier quality, political stability, control of corruption and economic productivity. Luxembourg, Sweden, Austria and Germany rounded out the top five. Haiti, meanwhile, with its plethora of natural disasters and poor economic conditions, was at the bottom, dropping 5 spots from 125 last year. Chad, Ethiopia, Nepal and Venezuela were also at the bottom of the ranking. Download the whole ranking report here.
“A lot has happened this year to move countries up or down in the list,” said Ahnell. “Most of the movement are countries that in the past have been ranked below average. It’s interesting that supply chain factors describe a lot of the movement and change.”India, Indonesia, and Tanzania all moved up in the ranking by 13 to 18 spots do to infrastructure improvements in these countries, and improvements in supply chain visibility, he added.
Later this year, FM Global is planning to give each company in its client base a resilience score based on the ranking and where they are located. “There’s a lust after benchmarking information,” said Ahnell. “A lot of organization want to know how they compares against their peer group.”
— Hailey Lynne McKeefry, Editor in Chief, EBN