The hallmarks of a global supply chain
By Scott Swartz, founder and CEO, MetraTech Corp.
No area of business has been more impacted by globalisation and the way in which business is transacted than the supply chain.
Against a backdrop of extreme market volatility and erratic market contraction and recovery cycles, supply chain executives around the globe have a challenging job in managing end-to-end supply chain planning.
There has been a massive shift in how companies view and use their supply chains to compete and gain market share. Distribution, manufacturing, invoicing and sourcing of materials have all been significantly impacted by the increased integration of a global customer and supplier base.
The pressure to reduce costs, acquire new customers and improve delivery times is causing companies to drive improvements in response times and maximise supply chain flexibility while also managing multiple supply chains.
According to a 2013 PWC Global Supply Study of 500 supply chain executives around the globe, the most pressing challenges include profitability, cost management, meeting customer requirements and supply chain flexibility. To develop a critical differentiation component, companies must create supply chains that can be tailored and responsive to customers, and multiple supply chain configurations that offer personalised service and pricing for each customer segment.
In addition, as companies expand into new high-growth markets such as Latin America, requirements like complex taxation, e-Invoicing and localisation also put pressure on systems.
2013 PWC Global Supply Chain Study
An optimised supply chain is the key to managing the changes brought about by globalisation and many companies are struggling with existing processes and technologies that are simply not up to the task.
For example, many companies need to have the flexibility to reroute inbound container shipments from ports experiencing capacity issues related to customs clearance and transshipping. What would seem like a simple task of rerouting inbound shipments to alternative ports has a dramatic ripple effect on the overall cost and efficiency of the supply chain network. To improve supply chain costs and performance, companies need quick visibility into the total cost and service implications of alternative ports of entry.
Pricing, features and brand recognition used to be what set a company apart in the market. With the commoditisation of products, companies are looking for improved ways to differentiate themselves in a global marketplace.
When product innovation and brands are no longer sufficient in commanding higher prices in the market, improvements and efficiency in the global supply chain through redesign and technology enhancements are critical and one of the few ways to improve profitability while remaining competitive.
Companies also have an opportunity to provide value-added services to meet the needs and increase revenue for more sophisticated customers. The competitive pressure to develop new products and bring them to market at the pace of business while continuing to manage legacy products has created an unprecedented need for system flexibility across the entire supply chain.
New requirements include:
Reduction in supplier sourcing and procurement costs
The ability to easily access information on suppliers simplifies the decision-making process; this is one reason why there has been an upsurge in online supplier and buyer community management, including outsourcing to companies that can maintain supplier data.
Global view and transparency of supply base
Companies require a single point of access for all supplier information for buyer-supplier communities. There is an opportunity for companies that can identify, qualify, evaluate and monitor suppliers so that buyers for large corporations can access reliable, qualified suppliers around the globe.
Reduction of supply chain risk
Quick assessment of suppliers' capabilities and financial, legal, health and safety, environmental and quality risks is a must across a global supply chain in order to easily pivot based on customer, competitive or local requirements.
Flexibility to support existing and new differentiated offerings
The billing partner and supplier settlement platform has to be flexible in supporting existing and new differentiated offerings, taxation, invoicing and other functions across a global base of customers, and not limit business model and reach to local markets.
Google and NIST Address Supply Chain Cybersecurity
As high-level supply chain attacks hit the news, Google and the U.S. National Institute of Standards and Technology (NIST) have both developed proposals for how to address software supply chain security. This isn’t a new field, unfortunately. Since supply chains are a critical part of business resilience, criminals have no qualms about targeting its software. That’s why identifying, assessing, and mitigating cyber supply chain risks (C-SCRM) is at the top of Google and NIST’s respective agendas.
High-Profile Supply Chain Attacks
According to Google, no comprehensive end-to-end framework exists to mitigate threats across the software supply chain. [Yet] ‘there is an urgent need for a solution in the face of the eye-opening, multi-billion-dollar attacks in recent months...some of which could have been prevented or made more difficult’.
Here are several of the largest cybersecurity failures in recent months:
- SolarWinds. Alleged Russian hackers slipped malicious code into a routine software update, which they then used as a Trojan horse for a massive cyberattack.
- Codecov. Attackers used automation to collect credentials and raid ‘additional resources’, such as data from other software development vendors.
- Malicious attacks on open-source repositories. Out of 1,000 GitHub accounts, more than one in five contained at least one dependency confusion-related misconfiguration.
As a result of these attacks and Biden’s recent cybersecurity mandate, NIST and Google took action. NIST held a 1,400-person workshop and published 150 papers worth of recommendations from Microsoft, Synopsys, The Linux Foundation, and other software experts; Google will work with popular source, build, and packaging platforms to help companies implement and excel at their SLSA framework.
What Are Their Recommendations?
Here’s a quick recap: NIST has grouped together recommendations to create federal standards; Google has developed an end-to-end framework called Supply Chain Levels for Software Artifacts (SLSA)—pronounced “Salsa”. Both address software procurement and security.
Now, here’s the slightly more in-depth version:
- NIST. The organisation wants more ‘rigorous and predictable’ ways to secure critical software. They suggest that firms use vulnerability disclosure programmes (VDP) and software bills of materials (SBOM), consider simplifying their software and give at least one developer per project security training.
- Google. The company thinks that SLSA will encompass the source-build-publish software workflow. Essentially, the four-level framework helps businesses make informed choices about the security of the software they use, with SLSA 4 representing an ideal end state.
If this all sounds very abstract, consider the recent SolarWinds attack. The attacker compromised the build platform, installed an implant, and injected malicious behaviour during each build. According to Google, higher SLSA levels would have required stronger security controls for the build platform, making it more difficult for the attacker to succeed.
How Do The Proposals Differ?
As Brian Fox, the co-founder and CTO at Sonatype, sees it, NIST and Google have created proposals that complement each other. ‘The NIST [version] is focused on defining minimum requirements for software sold to the government’, he explained, while Google ‘goes [further] and proposes a specific model for scoring the supply chain. NIST is currently focused on the “what”. Google, along with other industry leaders, is grappling with the “how”’.