Daily Archives: January 3, 2013

Risk – The More Things Change, The More They Stay the Same V – Technology

In our last post, we indicated that the World Economic Forum had recently released its 7th annual Global Risks report, it’s 2011 edition. This report was filled with risk, dozens of risk divided into five categories to be precise. Today, we are going to discuss the top technology risks from a Supply Management perspective.

Two of the biggest Risks Haven’t Changes Since Last Year:

Online Data and Information Security, specifically the risk of a
Massive Incident of Data Fraud or Theft

Every week we hear about another data breach at another retailer. What we don’t often hear about, because consumers aren’t directly affected, is yet another network intrusion at a Global 3000 or Global Financial Institution. While the average hacker might want your credit card, the average hacker employed by organizations that resort to corporate espionage wants your data — and your Supply Management related data in particular — or all of your corporate customer’s data. What are you making? What are the specifications? Where? With who? When are you shipping? From Where? With what carrier? And who is buying? And where are their bank accounts located? If any of your confidential data finds its way to your competition before you’re ready to release a new product, the losses could be crippling. What if your competitor is able to use your plans to jump-start their development of a better version and beat you to market? What if thieves intercept your critical shipments and sell your product on the black market? And if your customers data is exposed, and their accounts are hacked, good luck staying in business if all you have is inventory no one else wants but the company’s that just went bankrupt thanks to your lack of security. While a consumer’s financial solvency depends on her credit card information being kept secure, your organization’s financial solvency often depends on your Supply Management data and your customers’ financial data being kept secure.

Critical Information Infrastructure Breakdown /
Critical Systems Failure

Face it. It’s impossible to manage a global supply chain without modern supply management systems and the information infrastructure that supports them. What happens if your primary data centre gets taken out? What happens if your headquarters loses power for 48 hours? What happens if the land lines fail and the one satellite that carries cellular signals for your (remote) location stops responding? The minute your internet goes down, your business stops. Literally. And since your information infrastructure could breakdown as the result of a (power) grid overload, a data centre failure, an environmental disaster, or a terrorist action, all of which can not be predicted (or prevented in many situations), this is a significant risk that requires risk mitigation plans be in place and ready to go at a moment’s notice.

These two risks have become an even greater threat to your organization and round out the top 4:

Cyberatttacks and Cyberwarfare is on the rise, and the chances of it significantly disrupting your business and your supply chain are on the rise. As early as 2009, reports appeared that indicated that China and Russia had infiltrated the U.S. electrical grid and left behind trojans that could be used to disrupt the system. If the entire power grid can be taken offline, there goes your data centre. And even if the grid is safe, a concentrated attack on top level internet domain name servers can take down the internet for days. The recent GoDaddy outage, which some blamed on the Anonymous Collective, but which GoDaddy stated was a DNS upgrade error, took down thousands of sites for almost a day. McAfee might be hoping that the Anonymous Collective will decline in 2013, but I wouldn’t bet on it. And given the state of the current economy, I would bet that incidents of cyber-ransom, where thieves hijack your internet domains and electronic data and demand money for their safe return, will be on the rise.

Mineral Resource Vulnerability

China dominates the rare earth metals marketplace, controlling 90%+ of the supply of some of the critical rare earth metals needed for modern electronics. What will happen if they decide to cut off supply from the rest of the world? What will happen if the Somali pirates and the organized crime cartels figure out that these mineral and metal shipments are even more valuable than drugs, guns, oil, and finished iPads and turn their attention to these shipments? Are you prepared for supply shortages that will shut down your electronic and information technology hardware production lines?