One of the most important aspects of managing a supply chain is ensuring there is a consistent supply. A single point of failure can throw off an entire system's balance. Many companies now seek to diversify and expand supply chains to prevent the halt of goods, but that poses its own risks. According to the 2016 Manufacturing Report conducted by Sikich, only 1/3 of manufacturers conduct testing on a regular basis to ward off cyber threats.
Many supply chains have linked systems digitally, with digital barcode scanners to monitor supplies and supply chain management software being integrated at every level of the business. Integrating systems makes business sense, but having connected systems also leaves the manufacturers vulnerable. If a cyber attack is able to infiltrate one level of the supply chain, it will have better access to every level.
Without performing regular checks to assess risk, vulnerability only increases. The growing trend of mechanizing everything may be helpful, but do not underestimate the human element. Keep in mind the rate of advancement that technology has made in the last half-century; it does not take long for the latest software to become an industrial antique, and thus very easy to hack.
Consider the Washington Metropolitan Area Transit Authority - known collectively as the DC Metro or WMATA - a system first created in the 1970s that was expected to run completely on automation in the very near future. The Metro's creators underestimated the leaps and bounds automated technology would make in the coming decades, and the rate that the technology they first used would become obsolete. Train conductors were called on to use their best instincts to prevent accidents rather than the automated systems, placing great strain on a work force trained to rely on outdated electronic monitoring tools. This lead to severe problems for the train line, including mechanical failures, fires and several high-profile derailments.
While the WMATA is not strictly an issue in a supply chain, it does provide an excellent example of what happens if a supply chain is not properly monitored. This spring, the Metro announced massive closures to make vital repairs to its intricate system, causing uproar from local residents. Properly updating the system as needed and careful monitoring may have spared the public transportation giant a lot of time, money and embarrassment.
Monitoring and assessing risks throughout supply chains is crucial in part because as supply chains become more advanced they become more vulnerable. Jim Wagner, partner-in-charge of Sikich LLP Distribution and Manufacturing process, had this to say: "Warding off cyber threats, including cyber-espionage, is a top corporate priority across industries, but manufacturers and distributors need to do much more to protect their patents, designs and formulas, as well as their private company and employee information." Increasingly, protecting supply chains is seen as less of an IT risk and more of a risk to the business as a whole.
Using software to monitor systems is important and practical, but equally as crucial is staying current with the best methods for tracking cyber security, and creating a business culture that encourages people to remain vigilant. The human element is perhaps the most important part of any system of management, but especially with something as intricate as a supply chain. Recently, Wayne State University School of Business announced a partnership with the Detroit Auto Industry to create a supply chain logistics management program that would provide education for four and two year programs, with additional emphasis on immersive programs for current employees in the industry to learn the latest technological innovations. Continued assessment of cyber security is a must for the industry, if it is to continue expanding and evolving.
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