Switzerland's efficient infrastructure and high productivity helped it clinch the top spot ©123RF
Switzerland's efficient infrastructure and high productivity helped it clinch the top spot ©123RF

Switzerland tops chart for supply chain resilience

26 July 2016

Switzerland and Norway were ranked as having the most resilient supply chains, while Venezuela and the Dominican Republic have the worst, a report has found.

In its third annual Resilience Index, insurance company FM Global ranked 130 countries on how vulnerable their supply chains are to disruption. 

The index compared a range of markers measuring economic factors, political risk, oil dependency, natural hazards, infrastructure and the quality of local suppliers.

“The year 2015 brought political, economic and environmental turmoil across the world,” the report said.

“Conflict in Syria continued, with approximately 9m Syrians now having fled the country… The dramatic fall in oil prices persists with no immediate end in sight [and] natural disasters… left death and destruction in their wake. For business executives, such events can disrupt their companies’ global supply chains,” it said.

Last year’s top two countries swapped places, making Switzerland the new occupant of the top spot followed by Norway.

The report said Switzerland’s position was a reflection of its efficient infrastructure, high quality local suppliers, high productivity and resilience to changes in oil prices.

Meanwhile, Venezuela stayed at the bottom of the list because of poor infrastructure, uncontrolled corruption and its exposure to “twin natural hazards” of wind and earthquakes.

Some of the biggest risers and fallers were affected by their changing resilience to oil prices, the report said. Two of the biggest risers, Armenia and Malawi, both increased their resilience to oil shock by improving their productivity.

Armenia moved 31 places up the chart from 83 to 52, and Malawi rose 27 places to 84. 

Some of the biggest fallers, such as Cameroon and Morocco, saw an increase in oil consumption compared to last year.

Colombia and Kuwait saw oil dependancy increase, despite consumption remaining steady, because productivity fell.

Cameroon fell 14 places to 103, Morocco fell 13 places to 89, Colombia fell nine places to 119 and Kuwait fell nine places to 59. 

Ukraine and Egypt both entered the bottom 10 this year because of their increased political risk, the report said.

Ukraine fell 18 places to 125 because “the integrity of the country continues to be threatened by a high degree of tension”, both within the country and from Russia.

However, the main cause of supply chain problems for the bottom 10 countries was their geographical location and the resulting natural risks.

Caribbean and Central American countries are particularly exposed to the “twin natural hazards of wind and earthquake”, the report said, singling out the Dominican Republic, Honduras, Jamaica, Nicaragua and Venezuela, not only for their high risk to natural hazards but also on their poor management of these risks.

Top 10 countries for supply chain resilience:

1. Switzerland

2. Norway

3. Ireland

4. Germany

5. Luxembourg

6. Netherlands

7. US (26 states not susceptible to natural hazards)

8. Canada

9. Australia

10. Denmark

 

Bottom 10 countries:

121. Honduras

122. Jamaica

123. Algeria

124. Egypt

125. Ukraine

126. Mauritania

127. Nicaragua

128. Kyrgyz Republic

129. Dominican Republic

130. Venezuela

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