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Industry Updates

Should We Stress Test Supply Chains?

Most antibiotics used in the United States are manufactured in China, underscoring the threat coronavirus presents to supply chains.

Coronavirus is the global threat du jour. But remember back in 2008, when the world economy faced another big crisis? One of the responses to the Great Recession was to require banks to undergo “stress tests” to try to see whether they could withstand a similar threat in the future.

Writing in The Hill, Gary M. Goldfarb proposed that we take a similar approach to the supply chains of companies that want to list their shares on the stock market.

“As an investor, I would certainly want to know where a risk of supply chain disruption exists,” wrote Goldfarb, chief strategy officer of Interport Logistics LLC. “Government entities should require this of their vendors to make certain essential goods are not in the hands of others. And we should secure our medical supplies and the supply of essential items. A stress test would identify any risk.”

Goldfarb’s modest suggestion takes on a special urgency, considering that 97 percent of antibiotics used in the United States are produced in China.


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