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

2. Supply Chain Security
“We have proved to our management that good security is good business.” — Ann Lister of Texas Instruments
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3. 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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4. 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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5. 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!
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6. Important? September 11, 2001 - $2 billion per day lost
Longshoremen Strike – ships backed up
Potential loss of attack to major port - $20 billion estimate
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7. 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
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8. 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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9. 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.”
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10. 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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11. 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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12. 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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13. 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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14. What are your Hazards? Theft Pilferage Competition Information Systems
Cell Phones
Thumb Drives
Camera Phones
Disgruntled Employees
Lack of Training
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15. 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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16. What is Risk Management?
Identify Risks
Assess Risks
Control Risks
Balance Risk Cost/Operational Benefits
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17. 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
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18. 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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19. 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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20. 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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21. The Leadership Connection
Training
Visibility
Compliance
Assessment
Risk Management
Know the system → absolute!
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22. Leadership and Security
RISK
MGMT
ASSESSMENT/
TRAINING SC
SECURITY
VISION/
DIRECTION
PURPOSE/
MOTIVATION
LEADERSHIP
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23. Conclusion Risk Assessment Risk Management Operational Security
Supply Chain Success
Leadership is the foundation!
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24. Supply Chain Security Final Thought “If master small things,
Anything becomes possible”
- Mr. Miyagi
“The Next Karate Kid”
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