C. Warren Axelrod

Supply Chains at Risk

As I am writing this, a devastated Japanese nation is still struggling to recoup from the triple-whammy of earthquake, tsunami, and potential nuclear power plant meltdown. We need to wait until we know more of the facts before examining whether contingency planning was as good as it might have been in the face of catastrophes of such magnitudes. I do plan to return to the topic of catastrophe contingency planning at a later time but, in the interim, I point you to my chapter on “Responsibilities and Liabilities with Respect to Catastrophes” in the book Social and Organizational Liabilities in Information Security edited by Manish Gupta and Raj Sharman (IGI Global, 2009), which, due to it being the “Free Sample Chapter,” you can read at … http://www.igi-global.com/viewtitle.aspx?titleid=21331&sender=462d264d-7629-4504-a8c7-ef684703212c  As in the case of the BP Gulf oil spill, the Japanese government abdicated responsibility to the corporation owning the destroyed and destructive facilities, bringing to the fore the matter of what roles public and private entities should play in responding to catastrophes resulting from man-made structures.

Meanwhile, I would like to revisit supply chain integrity risks. To some degree, the topic is a reissue of outsourcing risk, which I examined in detail in my book Outsourcing Information Security (Artech House, 2004). However, focus on supply chains has increased as production is dispersed more broadly across the globe and as the complexity of software, products and services has greatly increased. The issue has again raised its ugly head as a result of the Japanese mega-catastrophe. In a mere week, we see the impact in the U.S. (General Motors), Thailand (Honda), Taiwan (Advanced Semiconductor Engineering), and Sweden (Volvo) as described in the March 18, 2011 Wall Street Journal article “Crisis Tests Supply Chain’s Weak Links” by James Hookway and Aries Poon. More details on the intentions to close GM’s Shreveport, Louisiana plant for at least a week are given in Nick Bunkley’s March 18, 2011 article “Lacking Parts, G.M. Will Close Plant” in The New York Times. The full impact of the supply chain woes are becoming increasingly apparent as each day goes by.

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