What do Norway, Qatar and Finland have in common? They’re ranked among the top 10 countries that are most resilient to business supply chain disruption, according to the 2015 FM Global Resilience Index, issued today by business property insurer FM Global, headquartered in Johnston, R.I. Tajikistan, Mauritania and Venezuela rank in the bottom 10 of countries least resilient to business supply chain disruption.
According to FM Global, the index is the first data-driven tool to rank the supply chain resilience of 130 countries and territories around the world to help executives prioritize where they should focus their risk management and investment efforts. The index aggregates nine drivers of resilience into three factors: economic, risk quality and the supply chain itself.
- Economic factor drivers are gross domestic product (GDP) per capita, political risk and oil intensity, which is a measure of a country’s vulnerability to changes in oil prices and supply.
- The risk quality factor consists of a country’s exposure to natural hazards, the quality of its natural hazard risk management and the quality of its fire risk management.
- The supply chain factor looks at how well a country controls corruption, the quality of its infrastructure and the quality of local suppliers.
Business decision-makers use the Resilience Index to develop insights into the risks and opportunities in their supply chain, better guiding their operating strategies in four major areas:
- Selecting suppliers based on the supply chain risk/resilience of the countries in which they’re located
- Deciding where to locate facilities
- Evaluating the resilience of the countries in which existing facilities are located
- Assessing the supply chain resilience of countries in which customers’ facilities are based
For governments evaluating their country’s attractiveness for foreign investment, the index can help them determine where to invest in strengthening infrastructure or to adopt new standards to strengthen natural hazard and fire risk management, for example.
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