Homeland Security Watch

News and analysis of critical issues in homeland security

February 10, 2012

Supply chain leaders: You are invited, the courtesy of a response is requested.

Filed under: Private Sector,Strategy — by Philip J. Palin on February 10, 2012

Last week a former client — I had not heard from him in over three years — called me in a (typically) titanic rage.

With expletives deleted, he said something similar to: “@$%& can they be serious about supply chain security without involving me?  And @##$%! is this about increased redundancy, do they have any ##$%^ idea how much that could cost?”  And so on.

“Surprised to hear from you Gary,” I replied (not his real name).  “Been a long time.”

One of the reasons I retired was bombastic, reality-distorting,  self-serving, narrow-minded, tactically-driven, context-challenged so-called leaders like Gary.   When an American business implodes, it’s usually got more than one Gary scattered among its executive ranks.  They are a minority, but sadly very active.

Since he evidently reads this blog, I guess that bridge has been effectively burned and pushed into the chasm for better or worse.

Considerably more frustrating was an email received yesterday.   A national organization closely related to the supply chain industry had just completed a meeting of its government affairs committee.  At the meeting they reviewed the new National Strategy for Global Supply Chain Security.  The note distributed indicates they will take “a wait and see position until they can  determine whether  this is in fact a priority initiative for the Administration.”

Eleven months ago the squishy soft underbelly of the global supply chain was nakedly exposed by a hard-hit to an economically peripheral area of Japan.  In the fourth quarter of 2011 the same sort of expensive embarrassment was produced by Thai flooding.    These events seriously affected the bottom-lines of some top global brands. Billions of dollars in value and productivity evaporated.  Other examples could be offered, fortunately none — yet — involving crucial agricultural, industrial or financial keystones.

In the context of these real-world challenges the President personally signs-out a new National Strategy.  He sends a cabinet secretary to the World Economic Forum to unveil the new strategy.  He orders follow-on work to be done.

Many are arguing this is a top-tier national security concern.  The President sets out a fairly narrow time-frame in which to come back with an implementation plan.

To which at least some in  private sector respond with, “Well, let’s wait and see”.  I almost feel the need to join my former client in yelling !@#$%?

The United States has the most advanced domestic supply chain in the world.  It is fundamental to our economic competitiveness and our way of life.   We are a key player in a global supply chain that is increasingly complex and on which we more and more depend.  This is a national priority.  It is also — mostly — a private sector responsibility.

The National Strategy is explicit regarding its goal to “engage government, private sector, and international stakeholders. The purpose of this engagement is to seek specific recommendations to inform and guide our collaborative implementation of the Strategy.”

The President of the United States is asking for your help.  He is giving the supply chain community the opportunity to get ahead of this problem and shape the solution-space.  This is a fantastic moment for a good dose of enlightened self-interest.

Gary is a bomb-thrower, but at least he wants to be involved.  I hope some of his more constructive peers accept the invitation.

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Comment by William R. Cumming

February 10, 2012 @ 1:16 am

Interesting post! Thanks Phil. Let US know if any open source studies documenting disruption and impacts on supply chains by Fukishima and Thai flooding.

Do all MBA’s take courses on supply chain management or resilience to disasters by business continuity planning?

Comment by Philip J. Palin

February 10, 2012 @ 8:14 am


The supply chain is not a big part of all MBAs. But I don’t know the supply chain’s proportion of “mind-share” in MBAs overall.

Following are a few links related to the impact of the Japanese and Thai events on the supply chain during 2011.

Japan and the global supply chain: broken links (The Economist)

Supply chain lessons from Japan (Forbes)

Stress test for the global supply chain (New York Times)

Japan’s tsunami supply chain comeback (Financial Times)

Thai floods batter supply chain (Reuters)

Thai flooding cripples hard-drive suppliers (New York Times)

Japan Inc. Supply chain bleeds jobs (Bloomberg)

Thai floods threaten Japanese supply chain (Financial Times)

Supply chain disruptions: sunken ambitions (Financial Times)

Preparing for High Impact, Low Probability Events (Chatham House)

Comment by Philip J. Palin

February 11, 2012 @ 7:26 am

Overnight I received three emails on yesterday’s post. One reads:

Phil: I am disappointed by your attack on “Gary.” Over the years you have set a high standard for civility. In your dismissive treatment of this man you have failed to meet your own standard.

There was a bit more, but this was the basic thrust of all three notes.

I appreciate the critique. For what it is worth, I struggled with whether or not (and how) I should deal with my former client. I agree my rhetoric was dismissive. This is almost always bad practice.

To potentially exacerbate my error, I will confess that this was/is a kind of experiment. What is good practice in dealing with evil?

As some may have noticed, this has been a recent preoccupation, especially in regard to Syria.

So am I now accusing “Gary” of being evil? Yes, just as I am aware of my own tendency to evil… perhaps confirmed in yesterday’s post (but perhaps not). To make sense of this you might read the link embedded in the immediately previous paragraph.

Evil is tough to define. My working definition is a persistently self-interested manipulation of reality. It is the passive denying — or active warping — of reality that is the essence of evil.

I know Gary well enough to be sure this is standard-operating-procedure for him, and has served him well (others who happen to be nearby, not so much).

In the past with Gary and others like him I have, in an effort not to dismiss them, excused their behavior, explained it as a creative quirk, an entrepreneurial insight, a requirement of being in the “arena”, a sheep dog among wolves, etc., etc. And I have not been entirely wrong.

But when does my excusing become enabling? When do my rosy-colored glasses become a denial of reality just as evil?

Can I recognize evil, name it and deal directly with it? Can I do so in a way that does not dismiss and further divide? Evidently not yet.

Especially to new readers this will all seem over-wrought and hyper-ventilating… and maybe it is. (I feel fortunate it is the weekend when readership plummets.) But it is relevant to supply chain resilience in this way:

The pioneers of the modern supply chain have built a beautiful and wonderful thing. It provides an extraordinary service to humanity and promises even more. But along the way — in the manner of all human handiwork — there are faults and vulnerabilities… some may well be fundamental.

Obscuring or minimizing these faults is very human, especially when it is our own creation. But we must be careful or obscuring becomes denying and minimizing is transformed into defending… extending… even amplifying.

There are systemic vulnerabilities in the modern supply chain. It is in everyone’s longer-term self-interest to recognize this reality and do what we can to mitigate the potential harm.

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