THE MAGAZINE

Supply Chain Security

By Matthew Harwood

Mindful of how disasters like Japan’s earthquake and tsunami and Thailand’s floods disrupted business supply chains, the White House recently released a national strategy aimed at making an organization’s global supply chains more secure and resilient.

The six-page document encourages companies to identify threats early and plan accordingly in a cost-efficient way. Among its stated goals are strengthening the security of physical infrastructures, conveyances, and information assets by using layered defenses and integrating security into supply chain processes.

Many businesses don’t believe that the threat justifies a national strategy, and they fear that it will lead to more regulation at an economically vulnerable time. The White House says that it’s not an either-or proposition. “We reject the false choice between security and efficiency and firmly believe that we can promote economic growth while protecting our core values as a nation and as a people,” President Obama wrote in the letter accompanying the strategy.

Eric Holdeman, who runs an emergency management consultancy and blogs about maritime security at Emergency Management magazine, says that any efforts to improve resiliency will be looked upon by maritime stakeholders as a burden. “Everything now is about cost, cost, cost,” says Holdeman. “Anything that increases costs or slows down the process would be seen as a drag on the system.”

Carlos Velez, global security director for Johnson & Johnson, disagrees with that mindset and says that security improves profitability in the long run. “In terms of investment, any dollar invested in security will have a return on investment in the cost of insurance premiums, avoiding recalls, and maximizing the efficiency of the entire supply chain,” says Velez, who is also vice chair of the ASIS International Supply Chain and Transportation Security Council.

The problem isn’t really the White House strategy framework. Rather, it is a company’s fear of cumbersome implementation requirements and overlapping government actions.

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