The good news: Technology can address the issues of productivity, efficiency, visibility and risk. The challenge: When supply chain experts say "technology," they're talking about more than RFID tags, GPS and temperature sensors.
The world is changing at such a fast pace, people have to think on their feet. The risks are unprecedented. Emma Scott, Chartered Institute of Procurement and Supply
CIOs need to think about supply chain metadata -- the information about the supply chain that's stored, transmitted and updated in such a way that IT can help procurement experts monitor and protect all of the intricate, interconnected pieces of the supply chain.
"The world is changing at such a fast pace," sums up CIPS' Scott. "People have to think on their feet because the risks are unprecedented."
Monitor multiple points of vulnerability
Perhaps the biggest challenge relating to supply chain vulnerability comes from the unforeseen risk that any given link will fail, an increased scenario given today's extended, multi-tier supply chains. "The points of vulnerability are greater than they ever were," says Ben Zelinsky, director of the supply chain technology practice at PricewaterhouseCoopers. "Because supply chains are outsourced and subcontracted, controlling each point becomes more difficult."
Explains his colleague Glen Goldbach, director of operations and supply chain practice, "You may have protected yourself by having two tier-1 suppliers for the same component, but if the same tier-2 supplier serves both of them, and that company fails, you lose the entire chain."
At the same time, analyzing all the elements of an entire supply chain is "an arduous and complex task," says Goldbach. Even documenting something as simple as a fast food burger with just seven ingredients might involve as many as 20 tier-1 suppliers, and even more at the next tier down. "You have to understand where the potential is for failure and contamination."
It's not just a question within the food supply chain, either, as prevalent as that is in the news. Big-ticket items such as fashion, perfume, pharmaceuticals and wine face challenges of authenticity -- without knowing all of your suppliers, it's impossible to determine where counterfeit articles might have been introduced into the supply chain. "You'll never eliminate all your risk," says Icix's Smith. "You have to mitigate it."
Apply technology early and often
Technology can help CIOs efficiently untangle this web of risk and lack of visibility. The challenge CIOs face is applying technology -- or more commonly, multiple technologies -- to their specific industries.