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Rodd Zolkos

FM Global's 'Resilience Index' ranks 130 countries' supply chain sensitivity

June 11, 2014 - 2:53pm

Supply Chain Sensitivity


FM Global has released a new Resilience Index that ranks 130 countries in terms of their susceptibility to supply chain disruptions and provides companies an online tool to assist in making supply chain decisions.

Johnston, R.I.-based FM Global developed the index with Oxford, England-based analytics and advisory firm Oxford Metrica using data from independent third-party sources as well as FM Global's RiskMark benchmarking algorithm, which measures the risk quality of more than 100,000 insured commercial properties around the world.

The index is based on nine factors: gross domestic product per capita, political risk, oil intensity — a measure of a country's vulnerability to changes in oil prices and supply, natural hazards exposure, the quality of the country's natural hazard risk management, the quality of the country's fire risk management, how well the country controls corruption, the quality of its infrastructure and the quality of local suppliers.

“These nine factors correlated the best and we felt gave us something that was legitimate and something that would be useful,” said Jonathan Hall, executive vice president at FM Global.

The online tool allows users to examine individual countries rankings and the factors contributing to those rankings from 2011 to 2014.

“From my standpoint it's about understanding the hazards,” Mr. Hall said. “Companies — once they understand the hazards — generally make good decisions.”

“We're very hopeful that this will be a big help to risk managers, CFOs and other business leaders,” Mr. Hall said.

The index, which will be updated annually, found Norway, Switzerland and Canada as the countries most resilient to supply chain disruption, while Kyrgyzstan, Venezuela and the Dominican Republic were the countries with the lowest levels of supply chain resilience.

In a statement, Margareta Wahlström, the United Nations special representative of the secretary-general for disaster risk reduction, said the index could also be valuable to countries trying to identify factors that could make them more disaster resilient.

View the FM Global Resilience Index.

 



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