Supply Chain Issues in Emerging Markets


Risk managers are beginning to think about how sourcing from emerging markets may increase their supply chain risk and limit their ability to respond to an event.


“Certainly there are a number of challenges that organizations are facing today if they think about managing supply chain interruption, specifically in emerging markets.”


Laurie Champion, Aon


Analyzing supply chain risk is a complex task, especially when it involves the fast-evolving dynamic environment of emerging markets. Business decisions about sourcing in emerging markets can change a company’s risk profile very quickly. Among the factors that must be considered in the analysis are local infrastructure, security, transportation and logistics, the regulatory environment and operational risks related to sub-tier suppliers. Another important aspect is the availability of people and other necessary resources when they are needed to respond to an event. In many organizations, the issue of business resiliency —taking into account the role of emerging markets in the supply chain — is becoming an integral part of enterprise risk management. Embracing an ERM approach creates opportunities to manage the risk better as well as improve operational effectiveness.


Copyright © 2012 by A.M. Best Company, Inc. All rights reserved. No part of this report may be reproduced, stored in a retrieval system or transmitted in any form or by any means; electronic, mechanical, photocopying, recording or otherwise.


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