Immunizing your supply chain network from terrorism

With the unfortunate rise of terrorism in the last couple of decades, it is imperative that companies incorporate immunizing their supply chain networks as part of their core risk mitigation strategies.

I have listed down some of these mitigation techniques below:

1. For starters, you must opt for transportation insurance. This will protect them from other disasters or shortfalls as well.
2. You must look to distribute the risk by avoiding total dependence on any one particular transport medium (railways, airways or waterways). In case any one of these mediums is disrupted, they can still rely on the other one.
3. You must maintain adequate buffer inventory. An optimized point must be found between just-in-time principle and the just-in-case principle. Use of predictive and prescriptive analytic techniques can help you achieve this.
4. You must shorten their supply chains in terms of distance and the number of parties involved. This will reduce the vulnerability of the network as the attackers will then have lesser points of attacks. Conversely, it also reduces the complexity and is easy for the company to manage the supply chain.
5. You must build a strategic alliance with your suppliers and logistics providers and not just a business relationship. This will ensure that if need be they prioritize your consignment and the entire model stays stable (at least for your company).
6. You must collaborate and educate your suppliers and logistics providers about the associated risks and the mitigation techniques so that the strategies are deployed across the entire network.
7. Lastly, you must also collaborate with your customers (to whom you are the suppliers) so that they understand risks of the supply chain. If collaboration doesn't work, then you must incorporate clauses in your agreements to avert dire consequences.

Reference: http://spendmatters.com/2010/11/01/terrorism-and-the-supply-chain-strategies-for-coping-with-a-form-of-supply-risk-we-cant-ignore/

Ethics, Crime, and Google: Supply Chain Networks

I recently attended a panel discussion on Human Trafficking and Modern Slavery at the 2012 Harvard Social Enterprise Conference. The panel consisted of representatives from consumer product companies, such as The The Body Shop and Goodweave, who prioritize human rights considerations in their supply chain management and procurement practices. They spoke of the difficulty in ensuring that suppliers were engaged in fair labor practices or avoiding child labor with such a complicated global web of supply flow and numerous intermediaries. They shared their respective company’s approach to tackling this issue and how it can be translated into consumer loyalty. My takeaway from their presentations was that the goodwill value associated with corporate social responsibility is tradeoff with the higher cost associated with working only with suppliers and manufacturers to guarantee fair labor practices with their employees.

The final panelist, a fellow at the Carr Center for Human Rights Policy, Sidhartha Kara, shared his research on the changing nature of human trafficking criminal networks. His primary message was that technology, lower cost of transportation/travel, and increased communication is creating a sharp increase worldwide in human trafficking. His research focused primarily on sex workers and modern slavery/indentured servitude. When envisioning supply chain networks we often consider product component logistics or final product delivery, not webs of disenfranchised humans being shuffled from one country or region to another in a life of labor or oppression. What this panelist did not present was what is being done to address this shifting nature of criminal networks. That’s where Google comes in.

ARTICLE & VIDEO: “Technology versus traffickers: Nobbling nasty networks”

The March 2012 article and video (linked above) from The Economist online details how Google has been bringing together diverse stakeholders in the issue of criminal supply chain networks: governments, law enforcement, security experts, software engineers, former victims of human trafficking, heads of ports, and former criminals themselves. Google Ideas, a new in-house think tank, has been fostering strategies about to develop new applications to disrupt criminal supply chains such as the global arms economy. In examining the sinister facets of supply chain networks, we face the following questions:

To what extent should corporations be responsible for ensuring fair labor practices or sustainable sourcing in their supply chains?

What is the role of emerging technology in combating criminal supply chain networks?