A year ago we had GhostNet, a massive cyber espionage network rooted in China that went well beyond simple allegations of spying on Tibetan Institutions. After a 10-month investigation, a network of over 1,295 infected hosts in 103 countries was discovered that included computers at ministries of foreign affairs, international organizations, news media, and NGOs.
Then we had massive cyber attacks that originated in China, including one against Google last December, and now even Google is pulling out of the country (as it must do no evil).
And now, we find out that GhostNet was but a shadow of a much larger Shadow Network which has compromised sensitive data from at least 16 countries from compromised computers in at least 31 countries (including computers used at Honeywell and NYU), which have been used to gleam Indian missile defence secrets and Canadian Visa applications from its citizens travelling abroad (including applications from the UK). The full findings will be revealed today in Toronto, as the network was cracked by researchers at the University of Toronto’s Munk Centre for International Studies, the Ottawa-based security firm SecDev Group, and a U.S. cyber sleuthing organization known as the ShadowServer Foundation, the real-world Internet Lone Gunmen.
The Full Report is available on line on Scribd and documents how much of India’s defence network has compromised as the computers and systems of the National Security Council Secretariat, Military Engineer Services, Military Personnel (including the Artillery Brigade and the Air Force), Military Educational Institutions (including Army Institute of Technology, the Military College of Electronics, and the Mechanical Engineering College), India Strategic Defence and Force magazines, a number of corporations (including YKK India Private Limited, DLF Limited, and TATA), and Maritime India (including the National Maritime Foundation and the Gujarat Chemical Port Terminal Company Limited) were all breached.
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|JDA Focus 2010
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Orlando, Florida, USA (North-America)
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San Antonio, Texas, USA (North-America)
|Executive Management Conference
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|Montreal Manufacturing Technology Show 2010
Montreal, Quebec, Canada (North-America)
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Editor’s Note: Today’s post is a collaboration between the doctor and Dick Locke, Sourcing Innovation’s resident expert on International Sourcing and Procurement. (His previous guest posts are still archived.)
Japan is a strange little country. (If you don’t believe me, just watch this excellent video on Japan – The Strange Country form Kenichi on Fast Company. [Japanese Version Only at Present, but the Infographics are quite compelling on their own.]) Japan has always had a quirky consumer, who would spend ten times what an item was worth if it had a highly sought after designer logo and then subsist on udon [Japanese noodles] for a month because [s]he spent almost every yen she had on the overpriced cellphone or designer purse. Because of my fascination with the culture that loves to embrace almost contradictory extremes in its quirkiness, I was naturally drawn to a recent article on the new Japanese consumer in a recent edition of the McKinsey Quarterly.
In particular, I found the second sentence of the first paragraph to be quite remarkable, especially considering the evolution of the Japanese consumer over the last 30 years: celebrated for their willingness to pay for quality and convenience and usually uninterested in cheaper products, Japanese consumers are now flocking to discount and online retailers. Furthermore, the paragraph ended with a bang, noting that workers are even packing their own lunches, sparking the nickname bento-danshi, or “box-lunch man”. It’s been the sarariman, or “salaryman”, for years and years. That’s quite a shift. And then the article goes on to say that almost half of consumers are spending more time at home as the new sugomori, or “chicks in the nest”, which is remarkable for a culture where the sarariman would spend 12 hours a day in the office, then go for dinner and drinks with his colleagues, then go home for a few hours of family time and rest before repeating the cycle.
So what does this mean to your supply chain? This is where Dick Locke, Sourcing Innovation’s resident expert on Global Trade, chimes in.
By itself, not much.
Consumer behavior or other private behavior is less important than work-related behavior. Some of the more atypical Japanese work related behaviors are:
- High on ‘uncertainty avoidance’.
Manufacturing has never been very flexible because long forecast cycles are built into the system.
- Fairly low (for an Asian country) on ‘power distance’.
In spite of all the bowing, decisions tend to be made after multiple level discussions and consensus building.
- Constant communication with coworkers
… which can last long into the night.
The result of this and other behaviors has been a somewhat inflexible manufacturing process accompanied by highly precise conformance to shipping schedules and quality.
These behaviors are based on values, and values change much more slowly than manners, shopping habits and style of dress.
What would be a sign that the new consumer values are affecting the workplace? One would be a more adventuresome sourcing behavior at your supplier. Fifteen years ago companies tended to buy primarily from members of their own keiritstu, a family of companies with common ownership by the same bank. (There’s a story that’s probably loosely based on truth: A Japanese sales person was asked what market share of a product his company has. He replied “100%.” The questioner pressed on: What are your sales to Mitsubishi? The answer was “Mitsubishi isn’t in our market”.)
Look for more attention to getting the best suppliers regardless of ownership … or even nationality. This is problematic. Japanese don’t work well with other Asians because of Japan’s history of invading most of them.
Also, watch for signs of communication breaking down. Karaoke bars and nightclubs provided an important locale for communicating with co-workers when at-work communication was difficult. Based on the trends in the article, you should sell your stock in karaoke bars.
And finally look for recognition that flexibility is important.
So basically, this article is of high importance if you are selling in Japan. Buying there? Not so much, but keep it in mind.
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