Lazard paper warns global supply chains face O-ring-style single-point failures amid geopolitics

Lazard published “The New Supply-Side Era: The O-Ring Meets Geopolitics” on September 14, 2026, warning global supply chains face economy-wide single-point failures.

The analysis argues the key constraint is physical and network dependencies built during globalization, not traditional demand-side or 1980s-style supply-side dynamics.

The paper applies Michael Kremer’s O-ring framework, flagging that missing inputs can halt production far beyond the initial disruption.

Supply shocks may transmit slowly, with price effects emerging months or years later, complicating forecasting, planning, hedging and investment decisions.

The framework calls for policymakers, corporate leaders and investors to incorporate geopolitics-driven fragility into strategy, risk management and capital allocation.