U.S. Election Concern for Supply Chain Managers

The results of the Lehigh Business Supply Chain Risk Management Indexfor the fourth quarter of 2024 say that the overall risk to the supply chain has increased significantly since last quarter. Six out of ten risks are on the rise.

The data for the LRMI was collected before nearly 45,000 dockworkers went on a brief strike earlier this month at 36 U.S. ports from Maine to Texas. On Oct. 3, workers reached a tentative deal to suspend the strike until Jan. 15 to provide time to negotiate a new contract. Many of the surveyed supply chain managers noted the possibility and dangers of a strike.

"The worries about the U.S. elections and the potential effects on tariffs, trade wars, and regulatory restrictions on source materials, methodologies, or technologies may have been the major reason for government intervention to surge to the number one risk, the highest it's been in the past four years," said Zach G. Zacharia, Ph.D., associate professor of supply chain management and director of the Center for Supply Chain Research at Lehigh. "The threat of the strike likely affected overall economic and transportation risks as well".

"For the first time in over a year, Cybersecurity is not the highest risk but the second highest," said Zacharia. "Although it is still trending upwards, as are all top five risks from last quarter."

The LRMI was launched in 2020 by the Center for Supply Chain Research at Lehighand the Council of Supply Chain Management Professionalsin order to rank 10 broad categories of supply chain risks. According to Zacharia, the LRMI allows executives and supply chain managers to look ahead and prepare for risks that will become important in planning for the next quarter. The risk categories are cybersecurity and data, customer, economic, environmental, government intervention, operational, quality, supplier, technological and transportation disruption.

A unique feature of the LRMI is the opportunity to compare across all 10 risk categories directly against each other, instead of scoring each individually. When supply chain professionals take that approach, the top four risks for the fourth quarter of 2024 are cybersecurity, government intervention, economics and technological or competitive risk.

Another important aspect of the LRMI is that the quarterly reports include a sampling of candid comments from supply chain managers about each risk category that takes you beyond the numbers. Comments from this new fourth quarter report include:

• Increased risk is expected due to a possible ILA strike (maritime workers at container ports) and additional tariffs.
• Cybersecurity is still a risk not only because there are more malicious actors, but because companies (and government) find it difficult to allocate enough funds to deal with it.
• The presidential election will surely send economic shockwaves, regardless of the victor.
• We expect better energy prices and, therefore, decreased risks for transportation.
• Everyone still wants someone else to hold the inventory; and playing push the payables is just getting crazy.
• Tech is moving much faster in the supply chain space than other verticals, which leads to increased risk.
• Read more comments.

LRMI reports are available every quarter in March, June, Sept. and Dec.

To get the latest report for free and to find out how supply chain managers can take the LRMI survey for the next quarter go to: business.lehigh.edu/LRMI.

About the Center for Supply Chain Research at Lehigh
CSCRL bridges theory and practice to promote a collaborative exchange of ideas on critical issues affecting supply chain management. By leveraging Lehigh's faculty, students, alumni and industry partners, the Center brings the latest developments in research and best practices together to generate new ideas for education and future knowledge in the field of supply chain management. Learn more.

About the Council of Supply Chain Management Professionals
CSCMP's mission is to connect, educate and develop the world's supply chain management professionals throughout their careers. No matter where you are in your career development, CSCMP has the resources and network to help you achieve your goals. Learn more.

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