Reference no: EM133349477
Case Study: Consider the risks of natural disasters (such as the Japanese tsunami) to global supply chains. However, as Supply & Demand Chain Executive (July 13, 2018) rightly points out, today's supply chains, though increasingly efficient, are highly vulnerable to digital threats. Since global organizations can support operations with partners in countries with varying infrastructure reliability, streamlining communications is a severe and sometimes impossible challenge to overcome.
In an era when the real-time transfer of information between international stakeholders is critical to a business, secure communications are the most important and the most frequently overlooked component to response planning. A recent survey found that supply chain managers are "very concerned" about data security, natural disaster, and war. As mass-connectivity has made it easier than ever to source partners, most businesses now have touchpoints across the global supply chain, regardless of their location or the markets in which they serve. This connectivity has brought tremendous financial, productivity, and efficiency benefits. However, it has also created a dependence on a globally-connected, real-time communication system with fears of disruption proliferating among manufacturers adopting JIT supply chains. What might start as a little ripple in a supplier country on the other side of the globe can become a wave of failure when issues reach a production facility.
So, in addition to natural disasters, cybersecurity is now a significant concern. Partnerships with third-party cloud services, off-premises data storage providers, unauthorized mobile device usage, email phishing, and aging infrastructure are all boosting risk. One in five firms in tech, defense, and aerospace, for example, use outdated browsers that make them vulnerable to malware. Email especially is inherently subjected to security threats. One survey found 77% of businesses expect to fall victim to email fraud in the next 12 months. Three-quarters also said that they had experienced at least one targeted email fraud attack in the past two years.
No entity within the global supply chain can prevent natural disasters and mass cyber incidents. However, they do need to be prepared, as we point out in the text.
Classroom discussion questions:
- What can operations managers do to prepare for these digital threats?
- What forms can the communications threats take?