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

Supply Chain Security “We have proved to our management that good security is good business.” — Ann Lister of Texas Instruments 2/19/2019

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 2/19/2019

Agenda What is Supply Chain Security Is it Important? Is it a Problem? Risk Assessment/Risk Management Leadership and Security Conclusions/Questions 2/19/2019

Supply Chain Security This is not your Dad’s Supply Chain! “If you do things the way you’ve always done them, you’ll get the same things you’ve always got.” -Darrell Waltrip NASCAR Driver This is not your Dad’s Supply Chain! 2/19/2019

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 2/19/2019

Problem? SCRI 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 >58 % 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 2/19/2019

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 2/19/2019

Recent Headlines “Supply Chain Security Poses Opportunities, Obstacles” E-Week, Sep 23, 2005 “Supply Chain Risks Threaten the World’s Biggest Companies” Logistics Today – “Financial executives at some of the world’s biggest companies believe supply chain risks post the top threat to companies revenues.” 2/19/2019

Purpose of Risk Assessment Identify those areas of the supply chain that are vulnerable to interruptions of support flow. People Processes Technologies External events 2/19/2019

Risk Assessment The identification and of hazards assessment of hazards to determine risk to include the probability and the resulting severity. 2/19/2019

Risk Assessment/Management Steps Identify the hazards. Assess hazards to determine risks. Develop controls and make risk decisions. Implement controls. Supervise and evaluate. 2/19/2019

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 2/19/2019

What are your Hazards? Theft Pilferage Competition Information Systems Cell Phones Thumb Drives Camera Phones Disgruntled Employees Lack of Training 2/19/2019

Risk Management Identify the hazards. Assess hazards to determine risks. Develop controls and make risk decisions. Implement controls. Supervise and evaluate. 2/19/2019

What is Risk Management? Identify Risks Assess Risks Control Risks Balance Risk Cost/Operational Benefits 2/19/2019

Risk Management Does Not: Does not take away the leader’s/manager’s initiative or decision making ability Eliminate risk or establish a climate of zero defects Allow the leader/manager to violate any laws 2/19/2019

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! 2/19/2019

New Problem? “There were no ‘secure’ rear areas.” General Joseph Heiser on Vietnam Logistics Sun Tzu – Chapter 1, The Art of War 2/19/2019

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 2/19/2019

The Leadership Connection Training Visibility Compliance Assessment Risk Management Know the system → absolute! 2/19/2019

Leadership and Security RISK MGMT ASSESSMENT/ TRAINING SC SECURITY VISION/ DIRECTION PURPOSE/ MOTIVATION LEADERSHIP 2/19/2019

Conclusion Risk Assessment Risk Management Operational Security Supply Chain Success Leadership is the foundation! 2/19/2019

Supply Chain Security Final Thought “If master small things, Anything becomes possible” - Mr. Miyagi “The Next Karate Kid” 2/19/2019