Gaining a deeper understanding of macro supply chain risks

The conventional way of answering this is through qualitative analysis (particularly looking at political and economic policy), but this approach doesn’t take into account the huge amounts of quantitative data that exists to give far deeper and more rounded insights.

The team was then able to augment this qualitative research with more objective data-led methodology. They employed models of national influence to better understand the precise dependencies and vulnerabilities across the supply chain, from raw material extraction to component manufacture to the import of finished products, and so derive unique insights including tailored scoring of the dependency and asymmetry of bilateral trade relationships across countries and over time.

The team analysed the degree of influence and dependence of China and the US on lithium products from Chile, used primarily for LFP batteries, to identify implications for supply chain dependencies as US manufacturers shift to LFP batteries. This was understood in relation to the Chinese government’s prioritisation of the electric-vehicle sector and Chinese and US companies’ efforts to increase vertical integration close to lithium sources. 

Adarga's data-driven supply chain analysis is today enabling more effective, more nuanced policy decisions thanks to its synthesis of dedicated metrics for national influence within supply chains based on quantitative data and qualitative analysis of the technology, as well as the investment landscape and government policy. This analysis goes beyond simplistic measures of a country’s influence over a given supply chain to assess the interdependence of countries and companies at the levels of production, and of bilateral trade in specific commodities throughout the supply chain.