The following Supply Chain Matters commentary is also being dual posted for interest among the Supply Chain Expert Community.

 

This morning, Supply Chain Matters had the opportunity to attend an Economist Intelligence Unit (EIU) and HSBC Bank sponsored Executive Breakfast Series event titled Business without Borders. Leo Abruzzese, Global Forecasting Director for EIU provided many insightful economic insights regarding the current outlook among global countries and also moderated a panel consisting of:

 

- Michael Cahill, Managing Director for Marsh’s Global Specialties business unit that includes Trade Credit and Political Risk

- Raj Subramaniam, Senior Vice President, International Marketing at FedEx

- Tarun Khanna, Jorge Paulo Lemann Professor at the Harvard Business School

 

The title of Mr. Abruzzese’s presentation was quire timely and has pertinence to global supply chain executives: Digging Out- or Digging In for Another Shock? - Preparing for a Riskier World. 


The presentation confirmed what most of us involved in global supply chains already know, that Europe is already in recession.  The open question is how long, and how severe? Also noted was that the Chinese economy is slowing down and that the BRIC countries (Brazil, Russia, India, China) have collectively hit a brick wall in terms of prior economic momentum. The EIU adds the U.S. to that list as well.


In the area of business risk, most risk today resides in the developed world, due to high uncertainties related to Europe’s economy which represents one-third of the overall global economy. A chart indicating the ten countries with the highest current risk scenarios has Syria listed first, Greece listed fourth, Italy listed sixth, and Somalia listed as tenth.

 

More sobering from a supply chain risk perspective is Mr. Abruzzese’s indication that businesses should be paying very close attention to economic and political events in Europe over the next two weeks. 

 

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