Supply Chain Risk Management: What You Don’t Know Can Hurt You
In recent months “supply chain” has been increasingly top of mind – from the living room to the board room. Supply chain shortcomings are blamed for everything from shortages of goods to rising prices. And this makes supply chain management – already crucial prior to today’s volatile economic environment – absolutely mission-critical.
Since the Industrial Revolution, most businesses have been highly dependent on the chain of suppliers they work with. Stakeholders have always been expected to safeguard their supply chain by ensuring that raw materials arrive as expected, goods produced are shipped on time, and vendor payment protocols are robust.
Managing and mitigating the risks inherent in supply chain dependencies is an ongoing challenge – but one for which solutions exist. In this post, we’ll take a deep dive into what supply chain risk management entails, why it’s so complex, and how the right data in the right format at the right time can measurably mitigate risk.
What is supply chain risk and how is it managed today?
Supply chain risk management (SCRM) is the way that organizations identify, monitor, detect and mitigate threats to the supply chain – which is the network between the organization and its suppliers that enables the production and distribution of its products to buyers.
Traditional supply chains were largely physical – designed to move tangible goods. Today, most commercial activity has a strong online component, meaning that supply chains have both a physical and digital side. At the same time, it’s important to keep in mind that while cyber supply chain risk management is the newest and sexiest frontier of SCRM, risk in the digital age is never strictly virtual. Even when organizations adopt the tools, processes, and techniques they need to minimize the adverse impact of cyber threats and other IT or OT risks – the risks to the physical side of supply remain dire and demand solutions.
What are some of the threats that SCRM addresses?
Threats to the physical supply chain include material shortages, transportation problems, supplier financial failures, cost fluctuations, and natural and manmade disasters. On the cyber side, these threats include attacks designed to infiltrate or exfiltrate data or manipulate hardware, software, operating systems, and peripherals – i.e. cybercrime and cyberattacks like ransomware.
Other risks that SCRM can mitigate come from a different, non-criminal direction – regulatory liability. Regulatory fines and sanctions, direct legal action against organization executives, and massive damage in the court of public opinion when noncompliance is revealed – today these can pose existential threats to a business.
Thus, companies need to effectively manage risks to their physical and cyber supply chains for one overriding reason: to stay in business. Global markets are unforgiving and competition is cutthroat. With so many options available, today’s consumers and procurement professionals don’t hesitate to change suppliers. That makes supply chain risk management essentially a question of business continuity.
The challenges of SCRM
There are many challenges to effective SCRM. Many of these are technical – the nuts and bolts of delivery and shipping or the bits and bytes of network security. Yet some of the challenges go far deeper, touching on the one resource that fuels all businesses in the digital economy: data.
In SCRM as in many domains, what you don’t know can hurt you. Some experts even see data overload as the preeminent issue driving supply chain risk. The reason? In both digital and physical supply chains, the amount of data generated is staggering. Yet the transition from data to insights – from having data to understanding what it means – remains elusive.
Supply chain big data comes from both internal and external sources. Internal sources consist of data collected from multiple supply chain partners. This unstructured data originates in different organizations, from data sources – points of sales (POS), GPS trackers, and a multitude of locations, temperatures, and other sensors. This data is crucial to evaluating the health of supply chains, and there are a plethora of solutions that address this.
Yet there is another type of supply chain data, which is no less crucial but often overlooked. No business exists in a vacuum, and external data – data collected from the public, government, the dark web, and myriad other sources – can offer a valuable glimpse into the macro forces that shape supply chain health. This data set is far larger than the internal dataset, and far less structured. But external data like factors that impact exchange rates, impending regulatory changes, governmental decisions, real estate and investment trends, technological innovations, and information directly relating to third parties in your supply chain like sanctions and PEP lists – all these can have potentially massive impacts on the supply chain.
To effectively monitor supply chain risk in today’s global markets, stakeholders need access to timely, structured, curated, and comprehensive external data.
Web data can help
Continuous feeds of web data from providers like Webz.io offer comprehensive coverage of data that can reveal potential supply chain risks and fuel actionable insights.
Webz.io offers different structured data feeds that cover a wide range of sources – enabling organizations to thoroughly vet third parties and closely monitor existing and emerging supply chain risks, as they evolve. We offer:
Gov Data API – Fresh, complete and accurate data feeds of the latest governmental rules, legislation, regulations, ESG data, sanction lists, corporate filings, and more. We draw this data in real-time from government sites every day, in multiple languages and including historical data going back over a decade, and loop in data that specifically relates to your supply chain.
News API – News data from millions of sources, in more than 170 languages from across the web, including adversary data about specific third-party suppliers. We distill this data via NLP for the actual meaning and sentiment behind every article, in near real-time. Then we structure and enrich it so it’s easily readable by your existing systems.
Dark Web API – Real-time data from millions of deep and dark web sites, forums, marketplaces, and messaging platforms crawled daily in multiple languages. This enables quick profiling of threat agents, groups and relevant platforms, and specific suppliers in your physical and digital supply chains.
The Bottom Line
Supply chain risk management is multifaceted and complex, yet mission-critical. Data is among the primary challenges facing SCRM stakeholders. Obtaining the right data in the right format at the right time can go a long way towards mitigating risk to physical and cyber supply chains, and helping businesses not only thrive but actually survive.
Talk to one of our data experts today to find out how our coverage of government, news, and dark web data can keep your supply chain management solution one step ahead of threat actors.