Globalization and Supply Chain Security: The Mining Transportation Case
2012-12-18 The decade ahead is defined by threats which are once generated by globalization and are based in geographical realities.
The globalization dynamics create vulnerabilities and proliferation challenges; geography provides the flash points where such dynamics are translated into conflict.
A good corrective to getting carried with away with globalization assertiveness — the concept of the flat world comes to mind — is the recent book by Robert Kaplan, The Revenge of Geography.
Geography informs, rather than determines. Geography, therefore, is not synonymous with fatalism. But it is, like the distribution of economic and military power themselves, a major constraint on— and instigator of— the actions of states.
Kaplan, Robert D. (2012-09-11). The Revenge of Geography: What the Map Tells Us About Coming Conflicts and the Battle Against Fate (Kindle Locations 621-623). Random House, Inc.. Kindle Edition.
A good example of this crossing function of globalization and geography is the role of maritime transit in the global mining industry.
In the most recent issue of Strategic Insights, Charles Dumbrille, Chief Risk Officer in D-Tel International examines supply chain security in the extractive industry.
The articles underscores that supply chain security is a global issue; yet, it is often overlooked when businesses look abroad for opportunities. For companies in the extractive sector, it is easy to forget the importance of looking not only at the deposits below ground, but also at what is happening above ground. This is especially true when examining the supply chain and how it affects production in the world’s high-risk, ‘complex’ regions.
As Dumbrille cautions:
In today’s economic climate, with emerging-growth markets outperforming developed economies, it is important to note that the most impressive performance occurs in countries that are rich in natural resources, thanks in no small part to China’s growing demand.
At the same time, we see what seems to be no end of growing risks: political instability and violence in the Arab world, the weakening of the European Union (EU), and diminishing political freedoms and human rights in many regions despite mounting pressures and demands from the international community.
With a greater understanding of what is happening politically, socially and economically on a global scale, we can start to consider what a mining industry supply chain looks like in regards to the security risks that occur along the way. Keeping all this in mind, those in the industry must determine how supply chains can be tweaked and altered in ways that can help prevent violence and eliminate abuses.
For a chance to read the full article and the most recent issue go to the following link: