The Trouble With Supply Chain Security

The Trouble With Supply Chain Security

by Vivek Sood

February 4, 2019

I know that Supply Chain Security is not the top of mind of anyone. Least of all for people who are so busy all day, every day that they barely have time to take a meal break.

I am, of course, talking about the supply chain managers. The mobile does not stop ringing from the time they take it off silent in the morning, to the time they are ready to crash. If it is not a customer calling about “another botched-up delivery”, it is one of the service providers calling about ‘another unpaid invoice”.

Literally, hundreds of things can go wrong as millions of things are moving around 24X7. And, sometimes they wrong, all at once. Like when a customer threatens to walk away, AND, a supplier takes you to court.

Nobody thinks of supply chain security until it is too late

Who has time to think of Supply Chain Security in the midst of all this? Only those who are most serious about their careers in the supply chain.

“Why is that the case” you ask? I think, by the end of this article the answer will be crystal clear to you.

Listen, I have written in many places earlier that the traditional supply chain model is gradually failing and will be relaced by a suplly chain model which is radically different.

It is true! Think about Sears, and all the others who were blindly copying Sears in the 80’s and 90’s. It gives me no pleasure to name all the favourites of the yesteryears in this context.

Anyway, you would have to be living under a rock not to know the names I am talking about. And, by the end of 2019, there will be many more names to add to that list.

But, this article is not meant to compare and contrast the supply chain models of yesterday, today and tomorrow. I will write a different article soon to cover that important point.

2019 is different

The point to pay attention is that 2019 is edgy. Things move slowly, but in a ‘definitive direction’. And this is the main point – careers are more important today, than in the past 20 years.

Nothing has bigger impact on a career than a major incident in the supply chain. What’s a major incident?

Take a look at the 1 minute video below to get a sense of the issue:

When everyone is scrambling around for answers…

But, sabotage is not the only type of potential incident that can hit your supply chain. There are many other types of potential incidents.

In fact, in a project last year we identified at least seven types of potential supply chain risks – each with very complex supply chain implications.

Threats To Supply Chain Security

Even making a list of all the different types of potential supply chain security breaches and related incidents is difficult. One you go past the most obvious ones – where do you stop? And, how do you neatly group them?

Take a look at the figure below:

(Source: Global Supply Chain Group’s SUPPLY CHAIN SECURITY REPORT – 2019)

the risk assessment and mitigation work in supply chain is extremely painstaking and thorough. All the projects that we have done which involve this kind of work have left me dissatisfied despite the projects being quite lucrative, and enlightening.

Why do I say that?

Because no matter how much you know – you cannot make a list of everything you don’t know that can happen. And that is just the trouble with the qualitative part of supply chain security and risk management.

On the quantitative side, it is even worse.

Try multiplying infinity by infinity. How do you assess the probabilities of something that has never happened before, but is likely to happen at some point in future? And, then how do you assess the full repercussions of that event, up and down the supply chain?

There is a tendency in our planning to confuse the unfamiliar with the improbable. (Thomas Schelling)

Did you know that in 2000 Ericsson permanently lost its pre-eminence in mobile phones market to Nokia mainly due to a fire in a chip factory owned by Philips. This is no place to tell the full story. That story is told on page 9 of my book The 5-STAR Business Network.

How did Nokia lose its crown to Apple due to its supply chain missteps is another story worth talking about. As is the story currently underway, how Apple is losing its crown due to its supply chain missteps.

But I digress. Let’s get back to the talk of supply chain security. People ask me why is supply chain security is such a dismal state that only by sheer providence (and goodness of population in general) we do not more incidents.

ABC of ‘Supply Chain’ “Security”

The main reason is this – most security professionals do not even know ABC of supply chains, and most supply chain professionals bother about only ABC of security.

A secondary reason is that it is just too difficult to secure supply chains with the current level of resorcing in most companies.

Think about this:

The truth is that there are so many moving parts in today’s supply chain that it is impossible to keep track of them all with the current level of supply chain resourcing.

And, companies are always reluctant to give more resources for anything, especially something as ‘unproductive’ as security, unless justified by a bulletproof spreadsheet vetted three times over by the most painstaking auditors.

Who will cop the blame for breaches of Supply Chain Security?

All this would not matter in the past when everyone could pretend that every security breach incident was a one-off, “could not be foreseen or prevented” kind.

Today, irrespective of whether it could be prevented or not, everyone – regulators, governments and public – are hyper-vigilant, and clamour for someone to blame. And guess who is going to cop most of the blame? The person who cops most of the blame when anything goes wrong in the entire supply chain – The Supply Chain Manager.

That trend is only going to escalate. And, that is the “Trouble With Supply Chain Security”.

Notes:

  1. We have created a supply chain security survey which can give you more ideas on important aspects of Supply Chain Security. If you are interested, here is the link for the survey.
  2. We also have a report titled Global Supply Chain Group’s GUIDE TO SUPPLY CHAIN SECURITY. If you are interested in this report, write to info@globalscgroup.com

Copyright - These concepts, frameworks and ideas are copyright of GLOBAL SUPPLY CHAIN GROUP from the time of their creation. Do NOT copy these without permission and proper attribution.

Notes:

  1. These ideas and concepts will be usually expressed by our thought leaders in multiple forums - conferences, speeches, books, reports, workshops, videos and training. The date shown above the article refers to the day when this website was last reformatted. This blog post or article may have been written anytime prior to that date. 
  2. All anecdotes are based on true stories to highlight the key points of the article - some details are changed to protect identification of the parties involved. 
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Vivek Sood

MORE INTERESTING READING
  • Supply Chain Security – Very Interesting article- I really appreciate this line “Only those who are most serious about their careers in the supply chain.”
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  • A pivotal objective of any supply chain network security exertion is to advance the convenient, productive progression of genuine trade while shielding and verifying the inventory network from abuse just as diminishing its weakness to disturbance. For instance, Ryder’s initiative in transportation and supply chain network security implies that customers can anticipate the largest amounts of security crosswise over tasks and responsibilities.

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