A pandemic risk index to improve supply chains decision-making between US and Mexico: A COVID-19 case study

The Social Vulnerability Index (SVI) developed by the Centers for Disease Control and Prevention (CDC), has been widely used as a benchmark to measure the state of vulnerability of counties across the United States. The SVI is integrated using a simple aggregation methodology on a set of variables reflecting the region's socioeconomic status, household characteristics, racial & ethnic minority status, and housing type/transportation. Due to its simple construction and inclusion of significant variables publicly available, the SVI has grown exponentially in popularity among organizations and government officials as a tool for decision-making, especially for resource allocation and for regional risk assessment. Furthermore, the COVID-19 pandemic brought a set of unprecedented challenges in the bi-national health between the United States and Mexico, particularly on the state of risk of supply chains. Since the North American Free Trade Agreement (NAFTA) became effective in 1994 and then renewed in 2020 as USMCA, Mexico has grown to be the biggest trading partner of the U.S., fast approaching a trade value of more than a trillion USD a year. For which conducting regional risk assessment following the SVI formulation can be a significant impact for multiple stakeholders and organizations. In this work, the formulation of the SVI is analyzed using a risk framework as a reference, to corroborate its applicability for decision-making, and to expand it to account for variables and processes impacting supply chains during the COVID-19 pandemic. This analysis shows that vulnerability is only one of three factors required to conduct risk assessment (i.e., hazards vulnerability, and consequences), needed to produce a baseline of reference to make informed decisions. A case study is also developed based on the use of the SVI during the COVID-19 pandemic for supply chains between the U.S. and Mexico, by introducing the formulation of a risk index that is compatible with the proposed risk framework. The first step to expand the SVI into a risk index for supply chains between U.S. and Mexico, was to reproduce the CDC methodology, followed by using an Empirical Cumulative Density Function (ECDF) aggregation methodology to justify it statistically, and then to illustrate its benefits and limitations when extended into a new risk index (accounting for the three required risk components). As a result, a bi-national risk index map is produced after harmonizing publicly available variables in the U.S. and Mexico, illustrating the potential to quantify the state of regional risk for supply chains and other path-dependent systems, and setting a reference to further improve it.