Skip to content

OM in the News: The Weak Link in the Supply Chain

July 16, 2018

In Supplement 11, we discuss the risks of natural disasters (such as the Japanese tsunami) to global supply chains. But as Supply & Demand Chain Executive (July 13, 2018) rightly points out, today’s supply chains, though increasingly efficient, are highly vulnerable to digital threats.  Since global organizations can support operations with partners in countries with varying infrastructure reliability, streamlining communications is a severe and sometimes impossible challenge to overcome.

In an era when real-time transfer of information between international stakeholders is critical to business, secure communications are the most important, and the most frequently overlooked, component to response planning. A recent survey found that supply chain managers are “very concerned” about data security, natural disaster and war. As mass-connectivity has made it easier than ever to source partners, most businesses now have touchpoints across the global supply chain, regardless of their location or the markets in which they serve. This connectivity has brought tremendous financial, productivity and efficiency benefits. However, it has also created a dependence on a globally-connected, real-time communication system that has fears of disruption proliferating among manufacturers that are adopting JIT supply chains. What might start as a little ripple in a supplier country on the other side of globe can turn into a wave of failure by the time issues reach a production facility.

So, in addition to natural disasters, cybersecurity is now a major concern. Partnerships with third-party cloud services, off-premises data storage providers, unauthorized mobile device usage, email phishing and aging infrastructure are all boosting risk. One in 5 firms in tech, defense and aerospace, for example, use outdated browsers that make them vulnerable to malware. Email especially, is inherently subjected to security threats. One survey found 77% of businesses expect to fall victim to email fraud in the next 12 months. Three-quarters also said that they have experienced at least one targeted email fraud attack in the past 2 years.

No entity within the global supply chain can prevent natural disasters and mass cyber incidents. But they do need to be prepared, as we point out in the text.

Classroom discussion questions:

  1. What can operations mangers do to prepare for these digital threats?
  2. What forms can the communications threats take?
No comments yet

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Supply Chain Management Research

Andreas Wieland’s supply chain management blog for academics and managers

better operations

Thoughts on continuous improvement: from TPS to XPS

%d bloggers like this: