We Don’t Know What Makes Supply Chains Work

The Colonial Pipeline hack really drives home what I recently wrote about how most companies don’t think strategically about their supply chain connections. At a fundamental level, we don’t have any idea what makes supply chains work. Some of you with years of experience or advanced degrees may not like to hear it, but it’s true.

This matters because increasingly hackers and other actors are going take advantage. The Ever Given’s havoc on global supply chains looked like a major and unanticipated disruption to supply chain professionals. To ransomware attackers and other opportunists, this was a neon sign indicating how many vulnerabilities exist in global supply chains, and also that they are worth a lot of money.

In supply chain management, we are arriving at a “reflective moment” for supply chain leaders. We have a global pandemic, blocked canals, and occasional weather (thinking of Texas) as evidence of how accidental supply chain disruptions and inefficiencies will continue and likely become even worse, but those are going to pale in comparison to the human-caused disruptions.

We have ransomware attackers and pirates that are malicious, but other human actions are less malicious yet no less pernicious: tariff wars, labor strikes, politically motivated changes to company ownership and intellectual property rules, and the rise of more nations desiring to compete on the global stage for affluence.

There exists a technology that promises to shed light on how supply chains work while simultaneously providing security to our connections and address many of the issues associated with disruptions to our inter-connected world: blockchain. The United States is woefully behind developing blockchain, one of the key challenges being how to monetize it. We need to develop standards of inter-operability, data formatting, and security, among other things. We need the security, and we need the transparency, and we need the promised efficiency and automation that blockchain can facilitate. Most of all, we need the insights into supply chain connections and efficiencies that blockchain will provide.

It will do more harm than good if we develop strategies that increase the value and productivity of supply chain connections if those connections are not secure, like setting a picnic atop an anthill. With the initiation of 5G and the impending appearance of quantum computing, we have a world that will become more interconnected right when the computing tools appear that would maximize the potential for unraveling its security.

It’s time to sit back and consider strategies to launch our information infrastructure into a new era of security, transparency, and inter-connectivity. They can no longer be taken for granted.

SC
MR