Supply Chain Security

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Supply Chain Security

• Joseph L. Walden
• Colonel, US Army, Retired
• Supply Chain Research Institute

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Supply Chain Security

• We have proved to our management that good
  security is good business. Ann Lister of Texas
  Instruments

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Supply Chain Security

• Supply Chains are inherently complex, dynamic,
  and fluid, characterized by uncertainty,
  ambiguity, and friction. These characteristics
  cloud the operating environment they create
  risks

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Agenda

• What is Supply Chain Security
• Is it Important?
• Is it a Problem?
• Risk Assessment/Risk Management
• Leadership and Security
• Conclusions/Questions

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Supply Chain Security

• If you do things the way youve always done
  them, youll get the same things youve always
  got.
• -Darrell Waltrip
• NASCAR Driver

This is not your Dads Supply Chain!
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Important?

• September 11, 2001 - 2 billion per day lost
• Longshoremen Strike 300-500 ships backed up
• Potential loss of attack to major port - 20
  billion estimate

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Problem?

• Terrorism
• Obsolescence
• Pilferage
• Information Breach
• Proprietary Data Camera Phones Thumb Drives
• RFID Data Security
• 66 of Inbound US Sealift Containers arrive at 20
  Major Ports
• gt58 of all inbound US containers come through
  New York/New Jersey, Los Angeles, Long Beach
• 44 through Los Angeles/Long Beach in 2003
• Lengthening of Supply Chains coupled with
  Globalization

SCRI
9/21/2014
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Recent Headlines

• Container Security Expansion of Key Customs
  Programs Will Require Greater Attention to
  Critical Success Factors
• Security and Risk Strategy Become Integrated
  Top Trends for 2006, CIO Magazine, January 2006
• Computer Security Becomes More Critical CIO
  Magazine, January 2006

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Recent Headlines

• Supply Chain Security Poses Opportunities,
  Obstacles E-Week, Sep 23, 2005
• Supply Chain Risks Threaten the Worlds Biggest
  Companies Logistics Today Financial
  executives at some of the worlds biggest
  companies believe supply chain risks post the top
  threat to companies revenues.

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Purpose of Risk Assessment

• Identify those areas of the supply chain that
  are vulnerable to interruptions of support flow.

• People
• Processes
• Technologies
• External events

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Risk Assessment
The identification and of hazards assessment of
hazards to determine risk to include the
probability and the resulting severity.
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Risk Assessment/Management Steps

• Identify the hazards.
• Assess hazards to determine risks.
• Develop controls and make risk decisions.
• Implement controls.
• Supervise and evaluate.

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How do you identify your Supply Chain Risks?

• You have to know your processes
• Process maps
• Understanding processes
• Understanding where risks are
• Internal Risks
• External Risks

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What are your Hazards?

• Theft
• Pilferage
• Competition
• Information Systems
• Cell Phones
• Thumb Drives
• Camera Phones
• Disgruntled Employees
• Lack of Training

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Risk Management

• Identify the hazards.
• Assess hazards to determine risks.
• Develop controls and make risk decisions.
• Implement controls.
• Supervise and evaluate.

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What is Risk Management?

• Identify Risks
• Assess Risks
• Control Risks
• Balance Risk Cost/Operational Benefits

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Risk Management Does Not

• Does not take away the leaders/managers
  initiative or decision making ability
• Eliminate risk or establish a climate of zero
  defects
• Allow the leader/manager to violate any laws

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Risk Management Programs

• Mitigate Risk
• Eliminate Risk
• Consequences of Risk or Mitigation probability
  and severity
• Courses of Action Analysis Feasible, Suitable,
  Acceptable?
• Manage Risk not react to Risk!

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New Problem?

• There were no secure rear areas. General
  Joseph Heiser on Vietnam Logistics
• Sun Tzu Chapter 1, The Art of War

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Supply Chain Security

• Supply Chain Security must protect the path from
  the supplier to the customer.
• End to End Security
• End to End Visibility RFID
• Information Security
• Personal Daily Obligation
• Operational Security
• Security and Velocity

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The Leadership Connection

• Training
• Visibility
• Compliance
• Assessment
• Risk Management
• Know the system ? absolute!

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Leadership and Security
SC SECURITY
PURPOSE/ MOTIVATION
VISION/ DIRECTION
LEADERSHIP
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Conclusion

• Risk Assessment
• Risk Management
• Operational Security
• Supply Chain Success
• Leadership is the foundation!

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Supply Chain Security Final Thought
If master small things, Anything becomes
possible - Mr. Miyagi The Next Karate Kid