'SCAN' (Supply Chain Alert Notification) Monitoring System

Single Market Economics Papers

23 Pages Posted: 22 Mar 2023

See all articles by Afonso Amaral

Afonso Amaral

Department of Engineering an Public Policy; Center for Innovation, Technology and Policy Research, IN+

William Connell Garcia

KU Leuven - Faculty of Business and Economics (FEB)

Francesco Di Cometi

Independent

Cristina Herghelegiu

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES)

Date Written: September 2022

Abstract

This note proposes an indicator-based mechanism in order to monitor the evolution of supply chains in the European Union (EU) and identify potential distress. Current events, such as COVID-19 or the Russian aggression against Ukraine, have highlighted the need for a better risk assessment of supply chains, particularly in strategic areas, with the ultimate goal of detecting disruptions as early as possible to avoid potential adverse effects on the economy and society. The proposed monitoring system is entitled “SCAN” (Supply Chain Alert Notification) and its main goal is to identify significant inflationary pressures and/or shortages, resulting from imbalances between demand and supply. This data-driven system could alert policymakers on possible supply chain disruptions, which can occur for specific products and sectors. The SCAN is first applied at the product level, where supply chain disruptions start to materialise. In order to be able to have targeted conclusions, we illustrate how this mechanism performs by focusing on a set of important commodities in two strategic settings – i.e. production of solar panels, commodities affected by the Russian invasion. The SCAN is then applied for the universe of sectors to capture signals of distress with more important aggregate consequences.

Keywords: Supply Chain Disruptions, Critical Raw Materials, Trade Flows, International Trade, National Security

Suggested Citation

Amaral, Afonso and Connell Garcia, William and Di Cometi, Francesco and Herghelegiu, Cristina, 'SCAN' (Supply Chain Alert Notification) Monitoring System (September 2022). Single Market Economics Papers, Available at SSRN: https://ssrn.com/abstract=4390581 or http://dx.doi.org/10.2139/ssrn.4390581

Afonso Amaral (Contact Author)

Department of Engineering an Public Policy ( email )

Pittsburgh, PA 15213-3890
United States

Center for Innovation, Technology and Policy Research, IN+ ( email )

Lisbon
Portugal

William Connell Garcia

KU Leuven - Faculty of Business and Economics (FEB) ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

Francesco Di Cometi

Independent ( email )

Cristina Herghelegiu

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES) ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 114
Brussels, B-1050
Belgium

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