Professor argues for connection of global supply chain networks in new publication

Given its size and complexity, the global supply chain can be a challenge to navigate successfully.

Thomas Choi, AT&T Professor of supply chain management and recently named Regents Professor at Arizona State University's W. P. Carey School of Business, remains at the global forefront of the upstream side of supply chains, in which a buying company interfaces with many suppliers organized into various forms of networks.

Along with worldwide thought leadersAnton Pichler, Vienna University of Economics and Business; Christian Diem, Vienna University of Economics and Business; Alexander Brintrup, Institute for Manufacturing, University of Cambridge; Francois LaFond, Institute for New Economic Thinking and Mathematical Institute, University of Oxford; Glenn Magerman, European Center for Advanced Research in Economics and Statistics, Université Libre de Bruxelles; Gert Buiten, Centraal Bureau voor de Statistiek, The Hague/Heerlen; Vasco M Carvalho, University of Cambridge, Centre for Economic Policy Research and Alan Turing Institute; J Doyne Farmer, Institute for New Economic Thinking and Mathematical Institute, University of Oxford and Santa Fe Institute; and Stefan Thurner, Santa Fe Institute, Section for Complex Systems, Medical University of Vienna and Supply Chain Intelligence Institute Austria. , Choi co-authored an article in the journal Science that proposes new collaborative efforts between nations, their public institutions, international organizations, the private sector, and scientists using the latest data and recent methodological advances to reconstruct a large share of the global firm-level supply network.

Choi says understanding this data and working with countries is crucial for addressing significant societal issues.

“Since mapping this network is probably going to keep improving, it's essential to start a dialogue about the responsible management and efficient application of these data for the benefit of the world's population,” he said. “This means working with nations to create a reliable and thorough picture of global supply chains.”

Choi and his co-authors wrote that a global supply chain map could enhance green transition management, reduce tax evasion, strengthen human rights, identify systemic risks and design secure basic provisioning systems.

“Though data limitations have reduced research, it has improved our understanding of how supply chains operate,” Choi said. “Although detailed information is available for individual ‘focal’ firms with known direct suppliers and customers, this information is not connected to the rest of the economy and does not allow for a network perspective. However, when examining the impact of supply chains on macroeconomic phenomena like gross domestic product, business cycles or inflation, the available data is usually restricted to highly aggregated relationships between various industrial sectors' inputs and outputs."

The article describes how the global economy consists of more than 300 million firms, connected through an estimated 13 billion supply links that produce most goods and services. That’s why analyzing the world economy at the firm level has long been inconceivable, even more so its complex network of supply chain linkages.

“This weakness has left us unprepared to make quick and informed decisions, causing, for example, extended shortages in raw materials and critical medical supplies during the COVID-19 pandemic,” Choi said.

He and his co-authors recommend integrating various datasets and creating analytical tools to create a reliable and comprehensive picture of global supply links that can be utilized for policymaking. A powerful global coalition of diverse stakeholders, including national governments, statistical agencies, international organizations, central banks, the commercial sector and the scientific community, is needed to advance this agenda.

“Supply chain data can be weaponized if in the wrong hands, so requiring strict data security and privacy standards would also be essential,” Choi said.