Elsewhere, the impact of rising oil costs in Q4 has driven up the costs of other commodities. 2016 saw a trend of persistently low commodity prices disrupted when OPEC restricted supply, pushing oil prices up by $10 per barrel in Q4. This worsened the cash flow crisis for oil exporters in Eastern Europe and Central Asia, the Middle East, North Africa and Sub-Saharan Africa. This increase in transport costs is encouraging businesses to have shorter supply chains although it remains to be seen how long the new agreement will hold. Contribution to global risk in the Middle East and North Africa increased from 9.08 at the beginning of the year to 9.09 in Q3.
John Glen, CIPS Economist andDirector of the Centre for Customised Executive Developmentat The Cranfield School of Management said:
“The UK’s decision to leave the European Union and the election of Donald Trump reflect a growing trend of protectionism in the global economy. For this reason alone, supply chain risk is set to increase further in 2017.
“Amidst exchange and commodity volatility, currency hedging will remain vital, while contingency plans must be put in place to protect supply chains from foreseeable trade barriers. Re-shoring supply chains will be an increasingly attractive prospect in the months to come. But, these are uncertain times for supply chain managers and there is no quick fix for the months ahead.
“It is more important than ever for supply chain managers to listen to their suppliers, develop closer relationships with them and to monitor any changes, so they can react quickly and ensure their supply chains remain resilient.”
Bodhi Ganguli, Lead Economist, Dun & Bradstreet:
“Dun & Bradstreet’s Global Risk Score measuring supply chain risk rose to an all-time high in Q4 2016, reflecting a rise in political and economic risk.
“Uncertainty stemming from significant trade and foreign policy changes implemented by the new US government will be one of the main drivers of supply chain risk over the next few quarters. The process of Brexit is also set to start in Q1, and will roil the current supply chain environment in Europe. Emerging markets dependent on trade will also be affected by both these factors and commodity price fluctuations remain an ever-present threat to global supply chains.”
Notes to Editors:
About the CIPS Risk Index, powered by Dun & Bradstreet:
First launched in April 2014, the CIPS Risk Index, powered by Dun & Bradstreet, is a composite indicator of pressures acting upon supply chains globally. The Index analyses the socio-economic, physical trade and business continuity factors contributing to supply chain risk across the world, weighting each score according to that country’s contribution to global exports.
The Index helps sourcing professionals understand the risks to which their supply chains are exposed, articulate questions and scenarios for key suppliers, inform assurance activities, check the readiness of contingency plans, support the negotiation of risk transfer in contracts, and establish factors which may impact the financial stability of tier one and sub-tier suppliers upstream. Regular production of this Index will help procurement and supply professionals communicate and justify risk-informed sourcing decisions and support effective Supplier Relationship Management.
About the Chartered Institute of Procurement & Supply:
The Chartered Institute of Procurement & Supply (CIPS) is the leading international body representing purchasing and supply management professionals. It is the worldwide centre of excellence on purchasing and supply management issues. CIPS has a global community of 115,000 in 150 different countries, including senior business people, high-ranking civil servants and leading academics. The activities of purchasing and supply chain professionals have a major impact on the profitability and efficiency of all types of organisation and CIPS offers corporate solutions packages to improve business profitability. www.cips.org, @CIPSnews.
About Dun & Bradstreet:
Dun & Bradstreet (DNB) grows the most valuable relationships in business. By uncovering truth and meaning from data, we connect our customers with the prospects, suppliers, clients and partners that matter most, and have since 1841. Nearly ninety percent of the Fortune 500, and companies of every size around the world, rely on our data, insights and analytics. For more about Dun & Bradstreet, visit DNB.com.
Contacts:
Deborah McBride
Dun & Bradstreet
(973) 921-5714
mcbrided@dnb.com
Investors –
Kathy Guinnessey
Dun& Bradstreet
973-921-5892
Kathy.Guinnessey@dnb.com
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/2016-the-year-of-economic-nationalism-as-supply-chain-risk-reaches-record-high-300406407.html
