Supply Chain Fragility Threatens Construction’s Recovery
The British construction industry, like many others, took a big hit during 2020, courtesy of the COVID-19 pandemic. Resource acquisition was in disarray, prices of finite stock soared, and trades(wo)men were, at times, barred from entering the workplace. It was a bad time to be in the trades.
This year, the industry is looking to power its post-COVID economic recovery, and a recent report by Turner & Townsend highlights exactly how they can do so: through the integration of sustainability strategies ─ a move that is absolutely critical to strengthening the supply chain and achieving the country’s net-zero targets.
Supply Chain Fragility Reported
The company’s latest (UKMI) shows a cautiously positive outlook for the construction industry, tempered by risks of inflationary pressure. But apparently, at the very core of the sector’s medium to long term success is its approach to dealing with decarbonisation and building back greener. In a way, you could say that construction, one of our most archaic industries, needs to shed its reptilian skin and adapt to modern standards.
The report states that a concerted effort by the industry to focus on decarbonisation will not only support the environmental imperative to reach net-zero, but it will also create a commercial case to do so too.
Diving into the depths of the residential sector rather than commercial, the report indicates that, by the end of 2023, there will be large scale options for cost-neutral net-zero retrofit schemes. Therefore, the challenge must be for new housing schemes to achieve the same targets where the marginal cost will effectively be nil, creating a major scale-up in delivery.
Previous Deflation and Incoming Inflation
The UKMI also took a look at the outlook for inflation in the years to come. Back in 2020, there was a yin and yang effect; inflationary pressure was balanced with deflationary constraints on both demand for resources and construction activity ─ due to social distancing regulations across the country and the increased cost of materials. As a result, 2021 is apparently set to tip towards inflation.
Why? Because the construction industry should be heading back to its normal level of productivity. According to Infrastructure Intelligence, “High government infrastructure spending is behind Turner & Townsend’s prediction of a 1.5% increase in infrastructure tender prices in 2021 (up from 1.0% in 2020). But for real estate tender prices, a 0.0% inflation rate is expected (up from -2) as new orders remain weaker.”
On its own, a quick uptick in inflation in an era of fragile finances could frustrate a ‘’ recovery, but more importantly, the fragility of the global supply chain and an industry that is still heavily reliant on government financial support is cause for concern. Therefore, with demand and output both set to rapidly increase, clients need to monitor their exposure to further supply chain disruption, potential company insolvencies, and cost increases. “Resilience and capacity can be built into the supply chain with the right investment and innovation into green technologies, retrofitting and sustainable building to capitalise on the business opportunity around net zero.”
Paul Connolly, UK managing director of cost management at Turner & Townsend, said: “Construction has a vital role to play in building back the economy in 2021, but its ability to deliver is threatened by the fragility of the supply chain and cost pressures as we move into the next phase of the recovery. Addressing the latter goes hand in hand with how we face up to the looming threat of the climate emergency.
“If a crucial tipping point on cost can be reached by the residential sector as early as 2023, it could pave the way for the wider real estate industry to follow. But to achieve this, industry must act now to uphold its part of the bargain and break its low margin, low investment cycle and change how it builds capability. We need to embed net-zero throughout the supply chain, accelerate investment and innovation and scale-up sustainable products procurement and processes so we can deliver a UK fit for a greener future,” he added.
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”’.