A version of this post was shared in August 2024 on the Global Supply Chain Institute blog, where supply chain professionals can find essential reading from leading researchers and scholars on the latest trends and topics relevant to global supply chain management. You can read the original post here.
In August 2024, the University of Tennessee Global Supply Chain Institute published the “EPIC Index Update and Country Risk Report,” a white paper by Alan Amling, Alex Rodrigues, and Sara Hsu based on research they conducted into supply chain disruptions for the Advanced Supply Chain Collaborative. Download the white paper.
Unprecedented hazards confront global supply chains, including those resulting from environmental and climate-related disruptions, geopolitical and regulatory acts, operational and technology disruptions, and financial and economic difficulties. There are also new hazards associated with the swift development of Artificial Intelligence (AI) and the possibility of a new Cold War.
Although supply chain managers have long been aware of possible disruptions, the COVID-19 outbreak brought to light how crucial risk management is throughout the whole supply chain. The epidemic affected every aspect of supply chains in every industry and region of the world due to its immense scope.
Since risk was present everywhere, traditional risk management strategies, which involved looking at possible disruptions in particular sectors, were deemed inadequate. As supply chain managers looked for secondary sources, operational hubs, and logistical resources to guarantee a steady flow of goods and services, supply chain visibility and mapping gained prominence
The Framework for EPIC
The Global Supply Chain Institute at the University of Tennessee in Knoxville aims to give supply chain experts vital knowledge on hazards associated with global supply chains. Conceived in 2010, the EPIC framework was first put forth in the book Global Supply Chains: Evaluating Regions on an EPIC Framework, published in 2014. A tool that assists global supply chain managers in evaluating their supply chain site choices by pointing out the advantages, disadvantages, opportunities, and dangers of various global locations is beneficial.
The framework known as the EPIC offers a paradigm for evaluating supply chain preparation from the perspectives of expertise, infrastructure, politics, and economy in various parts of the world. In order to evaluate these dimensions’ possible effects on the efficacy of international supply chain management initiatives, the framework identifies and explains each one. It assesses and gauges a nation’s and an area’s degree of maturity, particularly with relation to its capacity to facilitate supply chain operations.
Quantitative scores are utilized to evaluate each EPIC dimension, with the majority of the data used coming from World Bank databases that are accessible to the public (e.g., Logistics Performance Index, Worldwide Governance Indicators, and World Development Indicators). Further metrics were acquired from publicly accessible sources, including the International Telecommunication Union (ITU), the International Energy Agency (IEA), the International Union of Railways (UIC), the CEIC Data Company (CEIC), the Inter-American Development Bank (IDB), and the Organisation for Economic Co-operation and Development (OECD).
The fundamental qualities necessary for managing successful supply chains are encapsulated in the four aspects of the EPIC framework.
ECONOMIC [E]
The economy component evaluates the nation’s economic output, growth potential, ability to draw in foreign direct investment, and capacity to provide a consistent return on investments made within the nation.
The Gross Domestic Product (GDP) and its growth rate, population, foreign direct investment (FDI), exchange rate stability, consumer price inflation, and trade balance are the factors used to evaluate the Economy dimension.
These factors show the potential possibility for businesses looking to participate in the nation’s supply chain.
Politics [P]
The Politics component evaluates how well supply chain activities is supported by the political environment.
Ease of doing business, bureaucracy and corruption, legal and regulatory framework, tariff barriers, danger of political instability, and intellectual property rights are among the factors taken into account in the Politics component.
The environment in which supply networks function is influenced by these factors.
STRUCTURE [I]
The Infrastructure dimension monitors factors that have a significant impact on the management of the physical facilities and supply chain structures needed for operations. It stands for the possibility of utilizing these actions.
Physical, energy, and telecommunication structures can be used to broadly categorize the variables taken into account in the Infrastructure dimension.
The network of railroads, air and water transportation, and roads are all included in the physical infrastructure. Fuel and electricity supplies are handled by the energy infrastructure. The amount of structure and activity centered around the phone and internet constitutes the telecommunications infrastructure.
ABILITY [C]
The competency component evaluates the general supply chain skill levels of labor and the logistics sector in nations that may be included in the supply chain of an enterprise.
The labor productivity, labor relations, availability of skilled labor, management and line staff education levels, availability and competency of the current logistics service industry, and the speed at which customs and security clearances are processed are all included in the Competence dimension.
The capacity to run highly effective supply networks is impacted by the complexity of supply chain support offered by the nation’s logistics sector.
