Supply chains for iilicit products: Case study of the global opiate production networks

Abstract

In 2014, approximately 0.4% of the global adult population used illicit opiates (e.g. opium, heroin). Ninety five percent of these drugs were supplied by three global supply chains: the Afghanistan network, the Golden Triangle network, and the Mexico-Columbia network. The supply from these networks is insufficient to satisfy the demand. This paper analyzes the three supply chains (1) to understand how supply chains for illicit products operate and (2) to determine the elements in the supply chains that restrict the supply. Following the global production network (GPN) framework, the paper examines how product value is created and captured, markets and demand, networks, distribution routes, supply, inventory, and cost. The paper finds that the current high rate of seizures is the primary cause of the insufficient supply, that there is no easy way to increase supply, and that the most expedient solution is to boost the existing supply using additives (e.g. fentanyl). The paper gives insight into the characteristics of low capability supply chains and how increases in capability brought about by adapting to new conditions affects their design and operation.

Keywords

• global supply chains
• global production networks
• case study: illicit drugs