It is a known fact that we are in a new ‘world economy’, not through governments but on the level of common businesses.  Many small and mid-size companies need a how-to course on interacting with larger businesses.  Of course doing business in such a diverse environment is a trial unto itself as we’ve seen with a major US economic collapse and a 100% rise in oil prices. 

GEO-POLTICAL CHALLENGES
Does this observation make you realize the importance of the role that geopolitical instability plays on our supply chains?  Many companies are acknowledging this and putting it under risk preparedness for their supply chains.  However, it is more far reaching than merely our supply chains.  It ties into the physical and political requirements of a particular region.

For example we see the supply chain of oil in the Middle East.  Please review the chart below:

See all the United States flags that are dotted across the region. These are all the Middle East nations where the US has bases.  Despite the fact that, per our President, we are trying to move out of the region it remains a powder keg.

This chart gives a clear indication of US oil imports by geopolitical region.  Per the chart the US imports almost half of its oil from the Middle East and North Africa.  Any instability in these regions will most assuredly affect the oil pipelines and the supply.  The question that should be on the tip of everyone’s tongue is – What is the US doing to manage and mitigate the risks?  I’m sure I don’t know the answer but the point is that an item as important to the world economy as oil can be disrupted at the slightest provocation.

SOLUTIONS
Internally economic or accounting experts from each company must team with their supply chain risk counterparts to explore long term strategies.  For example:  how will the company handle its risk if all suppliers from one region take such a blow?

Companies must devise a global strategy to withstand regional unrest and ensure continuous of supply chains.  Prior to this global economic depression many supply chain strategies were based upon JIT (Just-in-Time).  But as credit markets and manufacturing dried up the lack of suppleness in the supply chains became apparent.  In addition, mergers and acquisitions are forcing companies to procure raw materials from the same region.

Each region of the world has its own geopolitical challenges tied to global trends.  It is the responsibility of the supply chain management to learn about the geopolitical issues in the regions they are operating in.  Tension can have an impact on raw material process and the supply chain even if there is not a direct threat.  A good deal of geopolitical understanding will go a long way to ensure a complete risk contingency program that will transport product to your markets.

Bio:

Expertise in lean six sigma manufacturing systems, inventory systems and process improvements functions. Accomplished in use of optimization models to determine least cost facilities and drill down to workflow details in support of process and profit management. Oversaw all Inventory Collaborate effectively with business managers to resolve variances, refine forecasts and identify opportunities for improvement.  While at Reckitt Benckiser, Linde Gas and Johnson & Johnson wore several hats including inventory manager, implementer and trainer of benchmarking and dashboard analytics, leader of cost optimization projects such as Lean and Lean Six Sigma, created and implemented cost and inventory metrics, collaborated across functional silos such as production, receiving, plant personnel and shipping to ensure inventory and cost systems integrity, wrote and implemented and trained staff on new Procedures to align with projects and continuous improvement leader.

Member of various accounting and operational trade associations such as; The Council of Supply Chain Management Professionals, The International Supply Chain Education Alliance and The Society of Cost Management.  My interests outside of my work are mostly outdoor activities like hiking, camping, tennis, etc., with a slight lean to gourmet cooking.