Protecting the Global Supply Chain

The phrase global before supply chain is almost becoming redundant. Few major companies remain which conduct their operations in a single country.

Research of 191 companies, 56 of which have c-level executives dealing with their supply chain, found 64 percent have suppliers in China and 56 percent have suppliers in Europe, according to Aberdeen Group.

The US federal government has now moved, protecting these global supply networks from being simply a business priority to a key national security issue.

Secretary of Homeland Security Janet Napolitano launched the National Strategy for Global Supply Chain Security at the World Economic Forum in Davos.

As was demonstrated by the disruption by the Japanese earthquake, tsunami and subsequent nuclear fallout, a national disaster quickly has the potential to turn into a wider one where the supply chain is concerned.

The government also stresses the need to protect the supply chain against international terrorist and criminal networks who are seeking to "exploit the system or use it as a means of attack" in an attempt to mar economic growth and productivity.

Need For Protection

Napolitano said it is essential global supply chains are strengthened to ensure they continue to operate in an efficient manner during times of crisis, are able to recover quickly when any disruptions do occur and continue to facilitate international trade.

To achieve these goals, the strategy focuses on two overarching principles; a stronger and more coherent approach from all departments of the United States government and other major stakeholders, and an improved take on risk management.

In the accompanying forward, President Barack Obama notes: "The global supply chain system that supports this [international] trade is essential to the United States economy.

"We reject the false choice between security and efficiency and firmly believe that we can promote economic growth while promoting our core values as a nation and as a people."

He continues: "The federal government cannot achieve this alone. Partnerships with state, local and tribal governments, the private sector and the international community are critical to realising our shared goal of building a new framework to strengthen and protect this vital system."

Implementing a Strategy

The United States government sees its mission in this area as encompassing two main goals; promoting the secure and efficient movement of goods and fostering a resilient supply chain.

On this first goal, it will seek to resolve threats early, improve verification and detection, enhance the security of infrastructure and conveyances and maximise the flow of legitimate trade. On the second, it is looking to mitigate systemic vulnerabilities through risk management and promote trade resumption policies and practices.

The comprehensive approach it takes to achieving these goals is based on "the worldwide network of transportation, postal and shipping pathways, assets and infrastructures", encompassing "points of manufacturing, assembly, consolidation, packaging, shipment and warehousing, as well as supporting communications infrastructure and systems".

The government will galvanise action by integrating federal efforts, fostering an all-of-nation approach to the issue and thinking globally by enhancing international coordination.

To manage the supply chain risks, the strategy focuses on understanding and addressing vulnerabilities that can be exploited, utilising layers of defence against both traditional and emerging threats and adapting the country's security posture to deal with evolving threats.

A six month engagement period is now due to commence with the international community and industry stakeholders, to ensure how it can be implemented in a cost effective manner.

For all the benefits global outsourcing brings with it – even though some of these may begin eroding – an international supply chain will always bring with it risks.

The Japanese earthquake and Icelandic ash cloud, which brought European airspace to a standstill, could not have been foreseen. Building safeguards into the supply chain will help, but it is securing against international agents which is likely to have the greatest impact.

Now the vulnerabilities of the global supply chain have been identified, they must be addressed.

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