Paving a New Road for Logistics Security

Article by Tom Serres

Business is challenging enough without the entire world affixing a suspicious eye on your operations. As a recent Bloomberg investigation has taught us, supply chains in their current state are fraught with security gaps. Consequently, small breaches can quickly dismantle brand name and loyalty, market capitalization, and competitive advantages.
Every company must take proper steps to ensure secure, efficient, reliable, and flexible supply chains in a complicated, busy  marketplace. Modern commerce is evolving at a rapid pace, only becoming more complex as consumers become more demanding of companies, wanting the order they just placed from their smartphone in a matter of days, not weeks, and without any logistical bumps along the way. If a company can’t provide a seamless experience, the customer will find someone that can.
Therefore, it is imperative that firms establish the technological foundation today for tomorrow’s prescient, agile, and intelligent logistics systems. Although Animal Ventures has spoken of those cognitive supply chains in the past, we thought it would be particularly useful to revisit the Bloomberg story in a hypothetical context, one where the manufacturer in question deployed technology to maximum effect, and examine the likely results.
While the accuracy of Bloomberg’s investigation has subsequently come under scrutiny, the lessons companies can cull from it stay fully intact. Machine trust is the key component to a decentralized economy and cognitive supply chains. Half measures are insufficient in providing the security, efficiency, and agility to navigate the complexities of digital commerce.

Lessons Learned

Maybe the subcontractor at the center of Bloomberg’s investigation used the most advanced security systems in its production facility. Maybe the manufacturer itself performed extensive due diligence on all of its vendors, subs, and partners to address security issues. Or maybe the story itself unfairly paints a negative portrait of how the events actually unfolded.
Whatever the case, no one has questioned the possibility of such a thing happening, just the way the Bloomberg’s framing. Thus, exaggerated or precise, companies and industries are well-served looking at the investigation through an educational light. Any engagement with current events would reveal modern supply chains as rife with gaps in communication and security, endangering the viability and trust of all involved.

Utilizing Technology

Let’s examine the circumstances detailed by Bloomberg from a different angle, one that utilizes the individual components of a cognitive supply chain rather than the segmented and distant pieces that modern logistics networks still rely upon for trade. Blockchain would create an impenetrable, immutable data throughput between the manufacturer and all of its vendors, lending complete transparency to provenance within the system.
Transactions would also be secure, scrutinized, and transparent between all parties. Additionally, they’d be bolstered by smart contracts, which would continually ensure each participant within the network adheres to predetermined guidelines. Such a system creates an atmosphere of accountability and compliance, forcing everyone involved to meet consistently high standards.
Furthermore, technologies like AI and IoT provide additional security measures, where AI could continually analyze products as they leave assembly lines for quality control and even the slightest hint of tampering. IoT sensors would monitor the entire facility, keeping constant track of all logistical assets and discerning anything atypical. If Super Micro’s supply chain had employed these technologies to foster accountability and security, it would have been significantly more secure.

Cognitive Supply Chains Are Simply Better

The collective use of these technologies forms the foundation of the cognitive supply chains of the future. Communication and security are seamless, eliminating the inevitable latencies of a system built around human trust. Like it or not, a supply chain reliant upon humans is inefficient and susceptible to error, information gaps, and fraud. The stakes are far too high for such potential pitfalls.
The early adopters will be the ones who establish a competitive advantage. Between the security advantages that would have either eliminated or, at the very least, significantly reduced the repercussions detailed in the Super Micro story, as well as the efficiency of a system that learns with time and repetition, cognitive supply chains are highly advantageous. Firms can choose to take the necessary steps to solidify their future viability or relegate themselves to the heap of also-rans.
Editor’s Note: This is the final entry in a five-part series exploring the future of supply chain integrity. Please check out Part One, Part Two, Part Three and Part Four. Also, take a look at AV’s white paper for more insight into the future of logistics and security.