This year, the world witnessed a series of protests in Lebanon, Spain, Chile, Ecuador, and even Egypt. Some of these protests persisted for weeks, others for months, while some are ongoing. This article will examine the relationship between geopolitical and social-economic systems in different countries, and how they can affect international trade, and more importantly the global supply chain.
For decades, the world has embraced globalization, which has made supply chains more interwoven rather than linear. It is now nearly impossible for a product to not have raw materials from diverse parts of the world. Hence, the social dynamics that affect political dynamics, and in turn, our supply chains and trade must be discussed. Here’s an example. There have been continuous protests for political freedom in Hong Kong. Although the demands have been met, the protests have continued. I can imagine how much businesses have lost as a result.
This trend happens across nations and affects citizens, regardless of whether they are in support of the protests or not. When a protest occurs, businesses are closed down, and the outflow of goods and services decreases, causing grave damage to the supply chain. As the geopolitical landscape changes, people will use protests to let their voices be heard. As the protests continue, the risk of doing business in affected countries will rise. Once goods and services stop crossing borders, commodities will be unavailable for people who need it. This poses a risk for supply chain managers globally.
A bigger challenge is the case that risk managers and supply chain managers rely on history to predict security and supply chain risk index. However, the recent protests have lacked a historical background, making it difficult to anticipate them. For example, the extended protests in Hong Kong couldn’t have been foreseen by anyone because Hong Kong has not taken such political risk to voice their concerns.
Supply chain managers and transportation managers have to take extra precautions when they are planning their supply chain. They must be aware of how the dynamics can change. I encourage supply chain managers and all others that work in the supply chain industry to be sensitive to global events and plan their supply chain processes to ensure that as much as they can, global protests do not affect the availability of goods.