The EPIC Framework Provides Structural Evaluation for Supply Chains.
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# The EPIC Framework: A Tool for Supply Chain Managers in a Time of Global Disruption
#### The EPIC framework provides structure for assessing supply chain readiness around the world.
University of Tennessee Knoxville Global Supply Chain Institute · September 20, 2024
Global supply chains face unprecedented risks, including environmental and climate-driven disruptions, geopolitical and regulatory measures, operational and technological disturbances, as well as economic and financial challenges. The rapid development of artificial intelligence (AI) and the threat of a new Cold War also bring new risks.
While supply chain managers have long been concerned about potential disruptions, the COVID-19 pandemic highlighted the importance of managing risk through end-to-end supply chain management. The scale of the pandemic affected all aspects of global industry supply chains.
Traditional risk management techniques, including checking for potential disturbances within specific areas, are considered inadequate as risks are pervasive. Supply chain visibility and mapping became a focus as managers worked to identify alternative resources, operational centers, and logistics assets to ensure continuous supply of goods and services.
EPIC framework (Image: University of Tennessee Knoxville Global Supply Chain Institute)
## The EPIC Framework
The University of Tennessee Knoxville’s Global Supply Chain Institute is dedicated to providing critical information on global supply chain risks for professionals. The EPIC framework was conceptualized in 2010 and first introduced in the book “Global Supply Chains: Assessing Regions with the EPIC Framework” published in 2014. Global supply chain managers benefit from this tool, which helps them evaluate supply chain location decisions and identify strengths, weaknesses, opportunities, and threats in different world regions.
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The EPIC framework provides a structure for assessing supply chain readiness across global regions from four dimensions: economic, political, infrastructure, and capability. The framework defines and explains these dimensions to assess their potential impact on the effectiveness of global supply chain management activities. It measures and evaluates countries’ and regions’ levels of maturity in supporting supply chain activities. Each EPIC dimension is assessed using quantitative scores based on data from public databases (primarily from the World Bank, such as the World Development Indicators, Global Governance Indicators, and Logistics Performance Index). Other indicators come from resources like the OECD, UIC, IDB, CEIC Data Company, IEA, and ITU.
The four dimensions of the EPIC framework capture key characteristics necessary for managing efficient and effective supply chains.
### Economic [E]
– The economic dimension evaluates a country’s economic output, future growth potential, ability to attract foreign investment, and stability in returns on investments made within the country.
– Variables used to assess the economic dimension include GDP and its growth rate, population size, foreign direct investment (FDI), exchange rate stability, consumer price inflation, and trade balance.
– These variables represent potential opportunities for organizations looking to engage in supply chain activities in that country.
### Political [P]
– The political dimension evaluates how the political environment supports supply chain activities.
– Variables considered under the political dimension include ease of doing business, bureaucracy and corruption, legal and regulatory frameworks, tariff barriers, risk of political instability, and intellectual property rights.
– These variables impact the environment for supply chain operations.
### Infrastructure [I]
– The infrastructure dimension tracks variables that strongly influence the structure and operational facilities of a supply chain. It represents the potential to leverage these activities.
– Variables considered under the infrastructure dimension are broadly categorized into physical, energy, and telecommunications structures.
– Physical infrastructure covers roadways, railway networks, and water and air transport activities. Energy infrastructure is responsible for power and fuel supplies. Telecommunications infrastructure is measured through telephone and internet structures and activities.
– Infrastructure facilitates trade, supports business operations, connects workers to jobs, creates opportunities in underserved communities, and protects the country from increasingly unpredictable natural environments. It directly impacts overall economic performance, particularly supply chain performance.
### Capability [C]
– The capability dimension evaluates the general level of supply chain skills among labor forces and logistics industries that make up an organization’s supply chain.
– Variables included under the capability dimension are labor productivity, labor relations, availability of skilled labor, educational levels of frontline employees and managers, availability and capabilities of existing logistics service industries, and speed of customs and security clearance.
– The maturity level of supply chain support provided by national logistics industries influences the ability to operate high-performing supply chains.
The increase in supply chain risks and rising uncertainty is alarming. Leaders can analyze the potential of removing one or more supply chain nodes rather than considering every risk that affects certain specific functions. Viewing the supply chain this way simplifies the risk management process, helping managers assess the impact of disturbances through war games. Managers can seek alternative suppliers, operational, and logistics providers or capabilities to manage unforeseen downtime.
Download our free paper to learn about all indicators for each dimension and country rankings in the EPIC index. In addition to data, we provide a summary of supply chain risks for each world region for supply chain managers. We also discuss major global risks across four primary categories: geopolitical and regulatory, economic and financial, environmental and climate-driven, and operational and technological.
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Visit ASCC to learn how to collaborate with the University of Tennessee Knoxville Global Supply Chain Institute to explore advanced concepts in supply chain management.
Download the white paper for more information on developing the next generation of supply chain planning talent.
## SC MR
(Image: Getty Images)
The EPIC framework provides structure for assessing supply chain readiness around the world by defining and explaining these dimensions to evaluate their potential impact on the effectiveness of global supply chain management activities.
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