Today's Biggest Supply Chain Threat?

PurchTips - Edition # 207 July 1, 2010

By Charles Dominick, SPSM

Are You Ignoring A Big Supply Chain Threat?

What if your most critical supplier suddenly had no Internet capabilities for an extended period of time? What if there suddenly was no Internet? How would your organization survive?

Think a long, worldwide Internet outage is impossible? Think again.

The Internet is showing signs of vulnerability at a time when business is depending on it the most. Last month, our website was brought down for days by a DDoS attack. (Student access to courses, though, was virtually uninterrupted thanks to the use of a backup site.)

When a site like ours gets attacked the way that "household names" like Twitter or CNN.com have, it shows that any supplier of yours could be a target. But website downtime is only the tip of the iceberg. I personally know of two companies whose entire Internet capabilities for employees have been down for months due to Internet security problems.

These types of situations are likely to become worse and more widespread. In the book "Cyber War," authors Richard Clark and Robert Knake write "If cyber warriors crash networks, wipe out data, and turn computers into doorstops, then a financial system could collapse, a supply chain could halt, a satellite could spin out of orbit into space, an airline could be grounded. These are not hypotheticals. Things like this have already happened."

Governments are responding to this threat. But part of the response may make you more concerned than at ease. For example, the Protecting Cyberspace as a National Asset Act of 2010, if passed into law, would give the President of the United States of America the power to shut down the Internet for up to four months.

Leading companies avoid depending too heavily on a single supplier due to risk. But, if all of your suppliers depend too heavily on the Internet, the potential for a long, worldwide Internet outage represents perhaps the biggest threat to your supply chain.

Are you prepared to conduct procurement in a world without the Internet? You better be.

I suggest that you research the vulnerability of the Internet, express to management any concerns about Internet over-dependence, and use these steps to develop a contingency plan for an "Internetless" supply chain:

• Ask your organization "How would we conduct business if the Internet was unavailable to anyone for an extended period of time?" Then, document those ideas and begin transforming the document into an actionable plan.
• Ask your critical suppliers "How would you conduct business if the Internet was unavailable to anyone for an extended period of time?" and require formal, documented responses. Scrutinize their responses and work with them to ensure readiness.

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