Insurer FM Global’s Resilience Index ranks countries most and least exposed to different dimensions of supply chain risk, having measured their resilience to supply chain disruptions.
The survey data examines nine key drivers of supply chain risk and groups into three categories: supply chain, risk quality and economic factors.
South Africa’s score of 57.6 comprised supply chain factors at 47.6, risk quality factors at 73.1 and economic factors at 37.8.
Scores are between 0 and 100, with 0 representing the lowest resilience and 100 being the highest resilience.
FM Global examined the following supply chain factors:
Perceptions of corruption (the extent to which public power is exercised for private gain) – South Africa ranked 60th, with a score of 34.9.
Perceptions of general infrastructure (transport, telephony and energy) – South Africa ranked 61st, with a score of 47.5
Perceptions of the quality of local suppliers – South Africa ranked 40 with a score of 60.7. Perceptions of the quality of our local suppliers have declined since 2012’s ranking of 23 (with a score of 69.7) and 2014’s rank of 30 (with a score of 65.6).
South Africa’s risk quality score is boosted by the country’s low exposure to natural hazards such as earthquake, wind or flooding – the Republic ranked 25th with a score of 96.1 (In 2012 and 2014 the score was 92.8)
In terms of economic risks, South Africa’s gross domestic product (GDP) per person (total population) ranks the country 73rd, with a "high risk" score of only 5.3 (6.8 in 2014 and 6.7 in 2012). Also, South Africa has become increasingly vulnerable to oil shocks (shortages, disruption in supply and price hikes). Ranked 92nd in 2016, 73rd in 2014 and 63rd in 2012, the decline could be attributed to currency volatility against the dollar and annual labour union strikes at refineries.
Supply chain risk is one of the leading causes of business volatility. The FM Global Resilience Index is designed to help supply chain executives evaluate and manage unknown risk potentially inherent in the countries they rely upon, so they can prioritise their risk management and investment efforts.