Category Archives: Supply Chain

The Most Hazardous Countries for Business

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It’s a dangerous world for business people, and it is well known that some areas of the world are definitely more dangerous than others.

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Maplecroft, a risk intelligence organization, has released its analysis of the 175 most dangerous countries for business. Its Global Risks Index (GRI) measures a combination of different risks that have an impact on global operations, supply chains and distribution networks of corporations.

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The GRI takes into account the following risks:

  • Terrorism
  • Conflict
  • Macroeconomic Risks
  • Rule of Law
  • Resource Security
  • Vulnerability to climate change
  • Natural Disasters
  • Human rights violations
  • Poverty
  • Risks from pandemics and infectious diseases

Without much surprise, Africa takes the cake for being home to the most dangerous countries in which to do business. The top four are:

  1. Somalia
  2. DR Congo
  3. Zimbabwe
  4. Sudan

Other notably dangerous countries include Afghanistan, Nigeria, Iraq, Bangladesh, Pakistan and Yemen. The report pointed to the most dangerous countries’ weak governance, internal conflicts and regional instability among the reasons  It’s also important to note that “several of these countries, including DR Congo, Nigeria, Iraq and Pakistan, are owners of huge oil, gas and mineral reserves, which form important links in the supply chains of western and BRIC companies alike.” The following map indicates regions of risk from low to extreme:

worldmap

The report also mentions countries that, although not highly ranked as dangerous, are critical to supply chains. Those countries include the Philippines, Indonesia and India.

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The United States, Canada and Australia remain low risk.

Breakfast in Crisis

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The massive flooding that hit the Atlanta area last September has led to an unexpected consequence for breakfast lovers everywhere — a shortage of Eggo waffles. According to the Kellogg Co., the flooding forced the closing of their Atlanta waffle factory and coupled with equipment problems in their largest waffle factory in Rossville, Tennessee, this means that there will be few Eggos to leggo until sometime next year.

According to an Eggo FAQ on Kellogg’s website:

Eggo is working around the clock to bring everyone’s favorite waffles back to store shelves as quickly as possible. We hope to regain full distribution of Eggo products by the middle of 2010. This is a top priority for Kellogg Company.

This is not the first time this year that a factory disaster was thought to be responsible for a shortage of tasty treats. Back in June, the New York Post reported that an explosion at ConAgra Foods plant in North Carolina would lead to a scarcity of Slim Jims. Panic was averted, however, when the reports proved to be unfounded and the company was able to keep Slim Jims on store shelves.

Toys in the Attic

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The final price tag for Mattel’s 2007 recalls of Chinese-made toys that were found to contain lead paint could exceed $70 million after the toymaker and its Fisher-Price subsidiary agreed to settle a consumer class action lawsuit last week.

The latest settlement puts an end to 22 lawsuits and provides refunds for toy buyers and reimbursement for any lead testing expenses they may have incurred after testing their children’s lead exposure.

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Mattel will also create a new, court-monitored quality insurance program and donate 5,000 to the National Association of Children’s Hospitals and Related Institutions.

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The recalls prompted a new federal law mandating third party testing for lead and other harmful contaminants for all toy manufacturers (although the Consumer Product Safety Commission recently allowed Mattel to use its own labs) and was yet another example of the growing concern about the safety of Chinese-made products. In the past three years, consumers have seen defective tires and drywall, and contaminated toothpaste, pet food, milk, and medicine, in addition to the lead-painted toys, all of which were made in China.

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What’s in a Name?

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As we begin the week, the influenza outbreak continues to gather steam. According to the World Health Organization (WHO), 20 countries have officially reported close to 1,000 cases of A (H1N1) influenza infection.

Of these a little more than half are in Mexico, where 25 people have died from the disease. According to the BBC, more than 200 cases have been confirmed among 30 U.S. states, with more expected in the coming days. The disease remains at a level 5 WHO alert, one step below pandemic status.

With news like this, it’s easy to over-react. But it pays to keep some things – like the disease’s relatively low death rate thus far – in perspective.

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After all, this disease has also caused a fair amount of collateral damage. While the WHO does not encourage full-bore border closings or national travel restrictions as a reaction to the outbreak, it does suggest that people who are already ill should delay international travel.

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Likewise, groups such as RIMS have suggested restricting nonessential travel, and numerous airlines have reduced flights and have gone to using smaller planes.

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Mexico has been particularly hard hit by all of this, as would be any nation that relies on tourism income to any appreciable degree. Toronto certainly learned that the hard way during its experience with SARS.

Perhaps the most dramatic, and most unnecessary, reaction to the outbreak thus far has been the nationwide swine cull in Egypt, which illustrated just how hard the pork industry has been hit by this, and by extension, the secondary businesses (e.g., restaurants, grocery stores) it deals with.  Last week, the WHO advised against referring to the outbreak any further as “swine flu,” since it raised inaccurate notions over the safety of pork products. The European Union has done likewise.

This blog will also do the same, referring to the disease henceforth by its proper name, influenza A (H1N1). This denotes that the current influenza outbreak is a type-A H1N1 virus. To prevent further confusion, this blog has also edited past posts to change the name of the disease where necessary.