Supply chains are a vital part of any business—but not all supply chains are created equal. You can either have a centralised supply chain, a decentralised supply chain, or a hybrid supply chain modelーwhichever works best for your current business strategy. That goes to say that not all supply chains are ideal and resilient. 

What makes a supply chain resilient is its ability to resist and recover from any disruptions. 

In 2020, many supply chain managers lost sleep thinking about a number of threats to their supply chain. The COVID-19 pandemic, rising political tensions, and increasing fears of climate change meant companies were being stretched thin. 

In fact, more than half (66%) of organisations around the world changed their supply chain strategies to stay operational.

But you have to understand that supply chain resiliency also has something to do with their origin country’s economic and political stability. 

What do we mean by this? 

Businesses operate under their government, so how capable a country is in responding to situations like the pandemic affects the business’ resilience. And so, when a country is not resilient, there’s a higher chance that businesses will be vulnerable to disruptions. 

Recently, a Rhode Island-based mutual insurance firm FM Global released the 2021 FM Global Resilience Index, where they rated 130 countries and territories’ supply chains on global resilience. The index provides an overview of the potential business vulnerabilities and opportunities around the world. They based the countries’ resiliency based on the following:  

  • Economic stability based on GDP per capita 
  • Risk quality based on the country’s infrastructure
  • Supply chain conditions relative to exposure to natural hazards

By knowing a country’s supply chain resiliency, your company is better equipped to:

  • Select reliable suppliers in a resilient country as a means to minimise business risks and potential  disruptions
  • Find global suppliers to source your products from. Instead of relying on just one supplier, you can diversify and be more adaptable to changing market demands.  
  • Assess geographic markets to uncover untapped markets and customer base. 

Now that we know a little bit about how a supply chain can better face disruptions, let’s discuss the top 3 countries with the highest supply chain resiliency. By studying what they did right, you can learn valuable lessons to improve your own systems.

Top 3 Countries with Most Resilient Supply Chains 2021

In 2021, Western European countries were named to have the most resilient supply chains. The countries ranked higher in terms of political stability, infrastructure quality, and supply chain visibility. And so, this means that they provide businesses with an environment where they can operate seamlessly.  

Without further ado, let’s see which countries are dominating the supply chain resiliency this year. 

1. Denmark Supply Chain Resilience: Manufacturing Agility

With its high economic productivity, low fire risk quality, and oil intensity scores, Denmark holds the number one spot. Among 130 countries and territories, they rank highest in terms of supply chain resilience.

What contributes the most to their resilience is their adaptability. During the onset of the pandemic, Danish businesses were able to quickly change their manufacturing processes to meet the growing demand for personal protective equipment (PPE) in the healthcare sector. 

In fact, as soon as the word came in, over 500 Danish companies volunteered to produce PPE within 24 hours. They reacted quickly, too, committing to their promise just a few weeks into the pandemic. These volunteers included both small start-ups and global giants, such as Lego. This reaction clearly showcases the supply chain agility of the entire country.

Plus, the quick shift to meet demands showed the flexibility and stability of the Danish’ manufacturing industry. Their quick thinking allowed them to produce new products fast—without significant impact on their normal operations. 

In times of great need, the Danish were able to respond to customers’ needs and showed incredible resilience to external risks. As a result, they moved up two ranks on the most resilient supply chain list, securing the top spot this year.

2. Norway Supply Chain Resilience: Infrastructure Quality

Next up, we have Norway, it ranks second on the list as the country has a high score. The strong economic productivity, low corruption, and excellent risk mitigation plans give Norwegian company’s a leg up from the rest. This means that Norway’s supply chain has an infrastructure able to withstand natural hazards and large business disruptions.

For instance, the pandemic hit Norway’s seafood industry heavily. This was especially apparent when Chinaーthe world’s largest producer, consumer, and exporter of seafoodーreduced its consumer demand. The lockdown and travel restrictions also contributed to the disruption, affecting the demand and distribution of seafood. 

Instead of scratching their heads and worrying about what to do with all the excess seafood, Norway had a solution. Norwegian seafood companies were able to redirect their salmon products to another seafood-hungry market.

Instead of selling to China, they shifted marketing efforts to Brazil. As a result, Norway’s exports of farmed Atlantic salmon reached 1.1 million tonnes in 2020—an amount valued at $7.44 billion. 

Norway’s excellent infrastructure and steady supply chain visibility helped them weather the pandemic and address disruptions quicker. In fact, by the end of 2020, Norway reached a GDP of just 1.4% below its pre-pandemic levels—an impressive accomplishment amidst the chaos. 

To put it simply, Norway’s great supply chain infrastructure helped them avoid facing severe economic losses in their most important market—the salmon industry. By rapidly and effectively pivoting to a new market, they kept their industry alive and it thrived. 

3. Luxembourg Supply Chain Resilience: Healthy Economy

Luxembourg secured its high position on the most resilient supply chains thanks to its high economic productivity and political stability. 

Luxembourg’s stable economy is due to its excellent infrastructure as they have better long-term development and growth perspectives for small, medium-sized, and large companies. Because their economy is so stable, it is resilient to external shocks like the pandemic.

For example, when the pandemic came along, the Commission de Surveillance du Secteur Financier (CSSF) used a pragmatic approach to quickly and smoothly transition operations into a work-from-home set-up. The CSSF serves as the financial regulator in Luxembourg, ensuring the safety of the financial sector even in sudden disruptions.

The financial industry in the country was able to embrace digitalisation and new communication methods seamlessly. By being successful in doing so, the financial sector continued the daily operations of many businesses, despite the disruptions brought by COVID-19. As a result, supply chains in the country were able to operate with minimal disruptions. 

Additionally, Luxembourg has low exposure to natural hazards, which means there’s a lesser risk of business disruptions. In fact, there’s only a 10% chance of damaging earthquakes in the next 50 years. This is considerably low when compared to areas along fault lines with high earthquake risks, like San Francisco or Tokyo. 

In other words, Luxembourg did everything to minimise disruptions, but still prepared for the worst.

Key Takeaways

Countries differ in the level of supply chain resiliency, and it depends on how well they can adapt to the changes around them. Based on the three winners in the list, we see that a resilient supply chain is agile—able to shift operations, adopt new business models, and recover from the biggest of disruptions.

Now, it’s your turn.

As a supply chain manager, you need to remember that your supply chain’s resiliency determines your company’s long-term success. Your priority is to strengthen your supply chain to serve your customers. Partnering with the most resilient of suppliers out there helps improve your company’s performance and reputation.

Not sure where to look? You can start with our team at Good for Life.

We bring you closer to the top three supply chains in this list by connecting you with sustainable and reliable suppliers. We also have agile technologies to help protect and enhance business operations, ensuring that nothing can stop you from becoming successful.

Let’s improve your supply chain and help it perform its best. Contact us today!