“Global Supply Chain Resilience”
A Panel Discussion Moderated by Shirley Ann Jackson, Ph.D.
President, Rensselaer Polytechnic Institute
World Economic Forum Annual Meeting 2013
Thursday, January 24, 2013
Thank you. Welcome to our discussion today on the topic of resilience in global supply chains. Global supply chains and associated transportation systems are the backbone of our world’s economy. They support and sustain the commerce that enables companies to serve customers; to create value; to expand into new markets; to grow and create jobs.
Like all infrastructure systems, however, these global supply chains are not immune to disruption or failure.
Different industrial sectors are exposed to varying degrees of risk. But the borderless nature of manufacturing today relies on increasingly interdependent networks of raw materials, production, transportation, and distribution. This network rests on financial capital, human capital, energy supply, etc. Climate events have a major impact. The interdependencyso vast and precariously balanced that one triggering event could result in unforeseen and unintended collapse of the entire structureis increasing our vulnerability to global supply chain risk. One of the first steps in mitigating this risk is codifying and quantifying these interdependencies.
Other vulnerabilities and potential disruptions rest in politics, and include cross-border regulations, customs, special permits, free trade agreements, and other policy-driven programs.
Disruptions hold the potential to impact every corner of the global economy, from multinational corporations, to our favorite hometown restaurants. The consequences are not trivial. The World Economic Forum has said company share prices have been shown to fall an average of 7 percent when faced with supply chain disruption.
It is not within our capabilities to prevent all future disasters. Nor to foresee and plan for every single situation that may lead to supply chain disruption. It, therefore, is imperative to secure a better understanding of past, current, and emerging risks. It is important to understand the intersecting vulnerabilities they drive, and how they interact to create cascading consequences. This knowledge will help to inform the development of new and better tools to quantify, model, and simulate these risks. This is a key area we want to explore in our session. Ideally, this should inform new policies, procedures, and strategies to help mitigate the effects of future disruptions, and to drive new frameworks for resilience.
Today, we have gathered a group of distinguished speakers to discuss how industry, government, and academia can help to make this happen. Our primary task is to answer: How are new approaches in risk management creating global supply chain resilience? Some related questions we wish to address are: How do supply chain risks differ across sectors? Where do they intersect? What are emergent risks? What new technologies, frameworks, and approaches can be leveraged to increase resilience across the ever-increasing complexity of global supply chains? What is possible? And how can we engineer that possibility into existence?
Let me introduce our panel.
- Stanley M. Bergman, Chairman of the Board and CEO, Henry Schein, Inc.
- Marcelo Claure, President, Chairman of the Board, and CEO, Brightstar Corp.
- Koji Sekimizu, Secretary-General, International Maritime Organization.
- Tarek Sultan Al Essa, Chairman and Managing Director, Agility, Kuwait.
- Safwan Masri, Vice President, Global Centers, Columbia University.
1. Where are the greatest vulnerabilities in the global supply chain?
2. What are the variations in vulnerabilities by sector energy sources and other commodities, food, consumer goods, etc.?
3. Where are the most serious intersecting vulnerabilities? The intersections are critical in understanding how the sectors link based on the supply chain of materials, energy, use, disposal, etc.
4. How does life cycle analysis contribute as a key aspect of sector risk assessment?
5. How can the risks be quantified/monetized?
6. What types of public-private partnerships can be employed to mitigate supply chain risks, to protect workers’ rights, to sustain the environment, and to help in covering losses?
7. What opportunities are there for data sharing, understanding vulnerabilities, etc.?
8. What models that are currently used in academic settings and in orthogonal fields could be applied to assist the private sector?
9. What is the role of data analytics and big data in understanding likely vulnerabilities and how they are interconnected? What sectors are likely to be particularly impacted by data analytics?
10. How do global supply chain vulnerabilities translate into security risks in both the public sector and the corporate sector?
11. What are the global regimes related to supply chain and how do they need to be strengthened?
12. What are the liabilities related to fulfilling customer demands and how are these related to predictability, real-time availability, and the mitigation of risk?
13. Broadly, what do we need to know to assess supply chain risk and resilience? Where is there a threat of disruption? What are the concerns about security?
Source citations are available from the division of Strategic Communications and External Relations, Rensselaer Polytechnic Institute. Statistical data contained herein were factually accurate at the time it was delivered. Rensselaer Polytechnic Institute assumes no duty to change it to reflect new developments.