CIOs need to think about supply chain metadata -- the information about the supply chain that's stored, transmitted and updated in such a way that IT can help procurement experts monitor and protect all of the intricate, interconnected pieces of the supply chain.
"The world is changing at such a fast pace," sums up CIPS' Scott. "People have to think on their feet because the risks are unprecedented."
Monitor multiple points of vulnerability
Perhaps the biggest challenge relating to supply chain vulnerability comes from the unforeseen risk that any given link will fail, an increased scenario given today's extended, multi-tier supply chains. "The points of vulnerability are greater than they ever were," says Ben Zelinsky, director of the supply chain technology practice at PricewaterhouseCoopers. "Because supply chains are outsourced and subcontracted, controlling each point becomes more difficult."
Explains his colleague Glen Goldbach, director of operations and supply chain practice, "You may have protected yourself by having two tier-1 suppliers for the same component, but if the same tier-2 supplier serves both of them, and that company fails, you lose the entire chain."
At the same time, analyzing all the elements of an entire supply chain is "an arduous and complex task," says Goldbach. Even documenting something as simple as a fast food burger with just seven ingredients might involve as many as 20 tier-1 suppliers, and even more at the next tier down. "You have to understand where the potential is for failure and contamination."
It's not just a question within the food supply chain, either, as prevalent as that is in the news. Big-ticket items such as fashion, perfume, pharmaceuticals and wine face challenges of authenticity -- without knowing all of your suppliers, it's impossible to determine where counterfeit articles might have been introduced into the supply chain. "You'll never eliminate all your risk," says Icix's Smith. "You have to mitigate it."
Apply technology early and often
Technology can help CIOs efficiently untangle this web of risk and lack of visibility. The challenge CIOs face is applying technology -- or more commonly, multiple technologies -- to their specific industries.
Ports America, for example, utilizes optical character recognition (OCR) cameras to scan each container's equivalent of a license plate; RFID tags to match the contents with the trucks; and GPS sensors to identify equipment locations and plan movement.
CIO Johnson, who says he has increased the percentage of investments versus maintenance in his IT budget devoted to supply chain issues over the last few years, says he is exploring these technologies to improve safety as well. One example is having dock workers clip GPS sensors to their safety vests and utilizing the positioning systems to manage the locations of both people and containers, so that if there's even the remotest chance of a container being with a few yards of an unsuspecting worker, an alarm could sound or equipment could be shut down.
Beyond safety and risk-mitigation concerns, the system has the potential to cut costs and delivery times. "A majority of our operating costs relate to managing productivity in the loading and unloading of ships. If we can work with our shipping partners and their customers to better streamline the information flow, we can build a process so that shipments have the proper release and clearance, and we can unload it from the ship right onto the truck."
Everyone derives benefits in that scenario: the ship is unloaded faster, the logistics carrier waits a shorter time, and the customer gets the shipment faster, Johnson says.