President Biden has called America to action on supply chain security – Now what are we going to do about it?

The Biden Administration’s Executive Order mandating a 100-day review of critical supply chains and its pending EO on cloud/cyber security are arriving not a second too soon. Never before have our physical and digital supply chains been as much of a national security issue as they are today. The team at Interos, which has been signaling the urgent need for greater transparency in our key extended supply chains — both to bolster national security and to foster economy prosperity — fully supports the administration’s forward-leaning call to action.

The question now becomes: how does the government and private sector, both singularly and jointly, better position themselves for operational resilience: the ability to avoid disruption in vital supply chains and to bounce back from massive shocks – such as the COVID-19 pandemic and the Solar Winds hack — when they occur? This is not only a matter of compliance, in this age of hyper connectivity: it is just good business.

Since the 1980s, global supply chains (first physical, and then digital beginning in the 2000s) powered globalization — integrating economies and crafting complex co-dependencies across corporations and governments. While the pace of globalization slowed following the 2008 financial crisis, that shock was insignificant compared to the events of the past year.

The ongoing COVID pandemic, global-scale cyber supply-chain attacks, and tectonic geopolitical shifts continue to upend the world order, transforming globalization and the fragile supply chains undergirding it. Today, critical and on-going semiconductor shortages, as highlighted in the Executive Order, threaten the auto industry with loss-inducing bottlenecks and imperil the future of emerging technology development. While concern over PPE shortages has abated somewhat since the height of the pandemic, the new administration has correctly flagged a review of critical vaccine supply chains, and it’s abundantly clear that ongoing vigilance here is imperative.

Supply Chain Visibility is More Important Than Ever

This flurry of activity, and the multifaceted nature of the concerns driving it, highlight the importance both of securing our supply chains and of taking action in a coordinated, strategic manner. To effectively address this crisis, we must adopt a modern comprehensive supply chain strategy, establishing a whole-of-government approach that encourages coordination and information sharing with industry.

More investment in supply chain awareness, launched from both the halls of key government agencies and from the C-suite, is required. This redoubled investment wave should stem not simply from any sense of “compliance” with White House mandates but rather from good-old common sense: a desire to protect the integrity of critical infrastructure and, when it comes to the corporate world, the Board’s fiduciary interest in securing the company’s top and bottom line…and the company’s reputation. Where the federal government once sorely lagged in investment in cutting edge cybersecurity technology, it cannot fail to do so today when it comes to investing in state-of-the-art supply chain risk management technology.

Indeed, these events of the past year underline the pressing need to adopt holistic tools leveraging emerging technologies that give a complete and up-to-the-minute picture of our supply chains, and the risk that often lies hidden within them. Without an accurate and real-time understanding of who we are truly reliant on, we cannot even begin to secure those relationships and pursue the much-needed, secure-supply alternatives. Technology exists, such as in the AI and Machine Learning powered platform built here at Interos, to instantly visualize extended supply chains down to the Nth tier, to continuously monitor a host of ever-changing risks, and to weigh alternative supply sourcing options (repositioning, reshoring) to solve for unwanted concentration risk. Yet, technology that yields broad and deep situational awareness of the supply chain is only part of the solution; an effective strategy lies at the core.

Supply Chain Security as a Top Strategic Priority

Admirably, within its first few months in office, the Biden administration has already moved to define the terms of the post-pandemic world order and its emerging norms, standards, and policies. It’s called for “resilient, diverse and secure” supply chains. A comprehensive and modernized U.S. supply chain strategy—one that is forged as a public-private partnership with serious input from the halls of corporate America and academia–will be foundational to this transformation, as supply chains uniquely cut across an array of challenges, including national security, public safety, economic growth, climate change and such increasingly prominent “ESG” issues as unethical labor practices.

To its credit, the outgoing Trump administration had issued a series of executive orders and policy responses to address the supply chain risks. These included executive orders addressing the information and communications technologyenergycritical minerals, and medical supply chains, as well as an unprecedented use of prohibitions and restrictions aimed at removing national security threats from U.S. federal and commercial supply chains. These actions were levied incrementally by the Treasury and Commerce departments, and provisions within the annual defense budget like NDAA Section 889 Part B that forbade agencies from doing business with companies using telecom equipment from 5 Chinese companies The Trump administration also oversaw the implementation of a different NDAA provision – section 1237 – which authorized the president to unilaterally ban 30 Chinese companies.

It’s worth noting that this isn’t just rare cross-administration continuity, it is cross-agency as well. The Biden administration is currently implementing a Trump-era rule enabling the Commerce Department to ban any technology-related business transactions it determines to pose a risk to national security. Additionally, in December 2020, the Department of Commerce added over 100 Chinese companies to their restricted entities list, which had seen the addition of over 350 Chinese companies over the preceding two years

Biden’s White House, however, has gone further and made it clear that supply chain security, in the wake of COVID, is a top strategic national priority and one that must yield tangible results through effective implementation. This renewed focus on supply chains also echoes the Obama administration, which should come as no surprise given that many Obama-era mainstays have returned to aid the Biden administration on the issue. To be sure, an integrated supply chain strategy is not just essential for pandemic responses.

The SolarWinds espionage-focused cyber breach – followed by the massive Microsoft Exchange and Accellion extortion-focused supply chain hacks — are just the latest reminders of the digital interdependencies across the government and private sector as well as the fundamental role of supply chain integrity to U.S. national and economic security. While there has been a significant increase in awareness and activity toward creating more trustworthy supply chains, a coordinated, whole-of-government strategy is necessary.

This again is why a coordinated and comprehensive supply chain strategy – one that includes allies across the globe — is so essential. The push for ‘Made in the USA’ is strong; identifying new ways to manufacture locally, to ensure trust in the software supply chain, and to boost economic recovery must be part of this strategy. But it cannot supersede collaboration with allies and like-minded nations in this transformed approach to worldwide extended supply chains.

What comes next?

What now can we do right here at home? How can we best respond to the EO?

In order for government agencies and companies to meet the challenge put forward by the Biden executive order on supply chain integrity, it’s imperative that they are able to do the following things:

  1. While not explicitly called out, agencies and companies will need to map out their entire extended supply chains to 4th, 5th, 6th tiers and beyond.
  2. Companies will need to be assessed against a wide range of risks, including defense, intelligence, cyber, homeland security, health, climate, environmental, natural, market, economic, geopolitical, human-rights or forced-labor.
  3. Risk assessment to include reliance on digital products that may be vulnerable to failures or exploitation, including via compromised software and hardware products.
  4. Risk assessment to include supply chains with geographic concentration risk/single points of failure, single or dual suppliers, or limited resilience, especially for subcontractors.
  5. Identification of warehouse, manufacturing, distribution and production sites whose location is at risk due to the factors outlined above.
  6. Identification or exclusive or dominant supply of critical goods and materials and other essential goods and materials by or through nations that are, or are likely to become, unfriendly or unstable.
  7. Identification of the availability of substitutes or alternative sources for critical goods and materials and other essential goods and materials.
  8. Identification of areas where civilian supply chains are dependent upon competitor nations.

Meeting these challenges will require an integrated approach to the supply chain and cybersecurity, leveraging emerging technologies that enable instantaneous supply chain discovery and continuous monitoring. Moreover, the challenges raised by the executive order will not be the last.

In this fast-moving era of supply chain uncertainty, the facts are simply:

  • Whether it’s the geographic concentration risk posed by the pandemic, or supply chain cyberattacks, or Chinese flagged companies, both government and industry need to focus on building resilience to prepare for the next system shock.
  • Given the ever-increasing globalization of our physical and digital supply chains, the United States must leverage advances in technology to both protect our resources and stay ahead of our adversaries.

Interos welcomes the opportunity to continue working with industry and federal agencies to address this critically important issue.

Jennifer Bisceglie, founder & CEO, Interos

50/50 by 2025: Interos pledges to address the Gender Gap

This grainy picture, taken 43 years ago near the Khyber Pass, a narrow route through the mountains that connects Afghanistan to Pakistan, shows a young girl standing by a car on the day that she became a refugee and immigrant.

This is my picture, age 12, standing next to two smugglers who agreed to bring my brothers and me from Kabul, through eastern Afghanistan to the Khyber Pass in 1978. My parents were unable to obtain passports for us and they had to find ways to get us out of the country, narrowly escaping the violence that followed the April Revolution.

In many ways, we were extremely fortunate. Long-standing friendships enabled my family, unlike many other refugees, to quickly find our way to Hamburg, Germany. Our parents ensured that we were quickly enrolled in language classes and then traditional schooling, easing the cross-cultural barriers refugees typically contend with. This marked the beginning of my journey as one fortunate enough to attend college and ultimately begin a career in Human Resources.

I consider myself extremely privileged to have, throughout my career, worked closely with many strong, smart and generous women leaders who encouraged my growth, provided mentoring, offered advice, and ensured that a more junior female colleague was able to build a career. The importance of growing the next generation of leaders, particularly women in tech, was instilled in me from start, and has endured in me to this day.

Today, as the Chief People Officer of Interos, one of my, and the company’s, foremost aspirations is that we will offer a diverse, equitable and inclusive environment to our team members. Together, under the leadership of our female founder and CEO, Jennifer Bisceglie, our mandate has been established: Interos will be 50% female by 2025!

Achieving this goal will not be simple, given the gender gap that exists globally both within and outside the tech industry.

The Gender Gap

According to the World Economic Forum’s Global Gender Gap Index, gender gaps in professional roles have been narrowing – nearly 76% of the gap in these roles have been closed globally.

Despite this progress, we are far from parity.  Per LinkedIn “across the three technical frontier role clusters” female workers hold just an estimated 26% of workers in Data and AI roles, 15% of Engineering roles and 12% of Cloud Computing roles. There is some hope that, with the rise of Data and AI jobs, this new technology profession will offer greater parity than the more established technology professions of Engineering and Cloud Computing.

Of course, establishing a goal is not quite the same thing as accomplishing it. We are announcing this goal because we want you to know how serious we are about making it a reality – and so you can hold us accountable to it.

So what are we going to do about it?

We’ve already several steps to start making this goal a reality. They include:

  • Establishing a diverse advisory board – Building diversity of people can start with building a diversity of leadership and thought. We’ve made significant progress here in adding two new female voices to our advisory board – Mary Cheney & Renee Wynn.
  • Establish relationships with diverse schools and building a pipeline of future female leaders through internship and hiring plans. Interos has identified 6 schools with high levels of diversity which include schools with majority female students and Historically Black Colleges & Universities and plans to offer students there internship opportunities with the company.
  • Continued Leadership – Only 17% of supply chain executives are women. Only 2.3% of venture capital funding goes to female founded companies. As one of the few executives defying both these odds, the continued leadership of Jennifer Bisceglie will also attract like-minded female professionals to join our ranks.

With this in our background – and with strong female leaders in place at Interos – we are poised to reach our 2025 goal.

Removing bias from supply chains: Using technology to improve how the world does business

By Vinay Kapoor, Interos VP of Product Management

Imagine for a moment, that you are in an exotic new land on vacation. I know it is hard to do this during a pandemic when we are locked inside our homes, but let’s do our best and let our imagination run wild. Now imagine that you get hungry and are looking for a nice place to grab some lunch. What would you do? Would you send a survey out to all the restaurants in the area so they can report how good their food is? Or would you rely on something smarter? The shocking truth is that while most people would not trust self-reported data full of human bias for their lunch, most supply chain resilience and risk management is done in this manner.

Back in the day, when you needed to find out who you did business with and if your supply chain was resilient, you would have relied on survey data or scoring that was run with Excel files under the hood. Furthermore, the best you could do was to get that information down to one tier. You may have known who you were directly related to, but you had no information on how deep the rabbit hole of your supply chain was and where it led.

At Interos, we have worked very hard to fundamentally change that approach and to help businesses understand their relationships with one another in a way that represents a departure from the status-quo — a new business model and a new way to solve this age-old problem. We use an automated platform that uses Artificial Intelligence and sophisticated models to find relationships and risks that even our customers did not know existed. We do it to a level deep enough that allows our customers to truly map and understand all of their business relationships in totality. The reason we went down the path of using AI was because we saw an inefficiency and bias that was introduced by the primarily manual approach of the past.

“If humans and machines are both error prone, then what can we do to build a better solution? ”

It is well known that as humans, we are prone to a number of cognitive biases. Not only do our conscious and unconscious biases impact our work, but they also tend to make us error prone. For us, it was clear that our customers could do better than relying on results that were incorrect and biased. We saw technology as an answer to this question.

We also recognized, however, that technology alone cannot be the perfect answer. Algorithms, too, are prone to bias, primarily driven by the quality of data being fed into the system. For example, an undergraduate at Georgia Tech found out that a robot she was trying to work with literally could not see her, because it had been trained with data from photographs of lighter skinned people.  Where does this lead us? If humans and machines are both error prone, then what can we do to build a better solution?

We ask ourselves these questions every day at Interos. The answer to these questions has led to the world’s first AI-driven platform for supply chain resilience that features a human-in-the-loop design, a white-box approach to AI and a robust methodology team that is dedicated to constantly improving our models for continuous improvement and removal of bias.

The solution to the problem we are trying to solve is not easy. Data on business relationships is not readily available in one or even a handful of data sources. The problem requires combing very large data sets from thousands of data sources that are both structured and unstructured. It is a problem that is uniquely difficult for a human-only or a machine-only approach and our solution elegantly combines both in a proprietary manner, including deep learning and cutting edge AI and Machine Learning models to help customers gain complete situational awareness.

The agile Interos platform allows our customers to dig several tiers deep into their supply chain and then identify risks, such as finance, cyber or operations, based on a proprietary graph and models that literally take the guess work and excel out of the equation. We allow our customers to make decisions that are driven by solid science and data, with the confidence that these decisions are free from bias and errors that you would see in the old, outdated way. In addition, our customers can even get alerts when a relevant event causes a ripple effect that can hit them in the future, well before it hits them. Our near-real time alerting system constantly keeps an eye on a number of well-defined events around the world and gives our customers an early warning system.

While all this can sound very exciting, what is even more exciting is that we are just getting started. With the power of our proprietary graph of business relationships in the world, our automated risk scoring models and our robust near real-time alerting based on global events, the possibilities are endless. Just like the joy from a nice meal, at your new favorite spot at that dreamy destination.

To learn more about how you can better protect your supply chains, click here. 

International Women’s Day: #ChoosetoChallenge Gender Disparity

Supply chain security is essential in addressing the most pressing challenges of our time – from the pandemic to climate change and from food security to national security – and requires a diverse range of expertise and backgrounds to tackle this growing range of challenges.

 Unfortunately, gender disparities in the supply chain workforce, including pay and leadership gaps, undermine our ability to rise to these challenges. On this International Women’s Day, the theme #ChoosetoChallenge should be a defining call to action for all of us in the supply chain industry to disrupt the status quo and together ensure greater gender diversity across all aspects of global supply chains.

The overall number of women in the supply chain workforce has remained steady at 39% according to a recent Gartner report. This number quickly dwindles when analyzing leadership positions. While the study found an increase from 11% to 17% of women executive leaders, the number of women in Vice President and Senior Directors roles dropped from 28% to 21%.

The gender disparity in salaries also is striking at all levels of the workforce, and then grows as women move up the corporate ladder. On average, a 2017 survey found men in supply chains earn 29% more than their female counterparts. This gap widened to 48% for women who had worked in supply chains 15 to 19 years. A separate study found the gap closer 16% on average and notes the increase of women entering supply-chain management.

Global Supply Chain and a Global Gap

Those studies largely focus on the corporate world in the United States and Europe, but supply chains have global reach. In fact, the gender gap extends well beyond the corporate leadership roles impacts many of the most vulnerable global workers. Approximately 190 million women work in global supply chains, many of whom are forced to contend with unsafe working conditions and salaries below living wages. COVID-19 has also disproportionately impacted these women in global supply chains, with additional economic hardship due to cancelled orders, layoffs, and workplace closures, not to mention the growing risk of domestic violence and increased virus exposure as primary caregivers. COVID-19 has also reversed the global trend of women in low-resource countries entering the workforce at unprecedented rates, and has reversed the last decade’s progress of women in the workforce in OECD countries as well.

Despite these disappointing statistics, there is room for cautious optimism. For instance, the previously mentioned Gartner study found that companies in the top quartile of gender diversity outperform other companies by 21% on profitability and 27% on superior value creation. A separate study explored conflicting findings on gender diversity and performance, and found that corporations based in countries with both normative acceptance of working women along with regulatory support experience better performance as gender diversity increases. When assessing global supply chains, country-level and cultural context is essential to consider

There also is a broader movement toward supplier diversity programs, wherein corporations explicitly seek suppliers with at least 51% of a company owned and operated by an individual or group traditionally associated underrepresented or underserved. Not only do these programs support greater competition and widen the pool of potential suppliers, but they also add agility to supply chains. Some studies have placed the ROI of supplier diversity programs around 133% depending on annual sales numbers. And as Environmental, Social, and Governance (ESG) considerations continue to garner greater attention and compliance requirements – such as the recent law supported by the German cabinet that mandates human rights and environmental considerations in global supply chains – supplier diversity programs will also contribute to greater compliance as well as stronger performance.

How Companies Can Show Their Support

There also are a range of ways corporations can signal their support toward gender diversity across their supply chains. In 2019, eleven companies announced their commitment to women’s empowerment across their supply chains and subsequent programs to help achieve their goals. The United Nations Global Compact – signed by over 16000 global companies – includes gender equality as a top priority in its sustainable development goals. Companies are delisted if they fail to uphold the standards established under the Global Compact, with subsequent reputational damage as well. Companies can also choose to adopt more female-friendly policies such as longer maternity leave options and adopting zero-tolerance policies for sexual harassment among many other measures.

These are great first steps, but more companies must #ChooseToChallenge the current status quo. As a tech company focused on supply chain risk, Interos is committed to enhancing the number of women in the tech and supply chain industries.  Founded by Jennifer Bisceglie, we are already shattering the norm as one of the few venture capital-backed female-founded startups, which historically account for only 2.3% of VC funding.  Our gender diversity numbers are also well above the average for tech companies, and we #ChooseToChallenge and #CloseTheTechGenderGap by achieving gender equity in the workforce within the next few years.

With supply chains now front and center in popular discourse, we must take advantage of this interest and help grow diversity across the supply chain workforce. As supply chain risk professionals, we know well the power of networks, and the ripple effects a few central nodes can have across the globe. Each of us can impact these gender imbalances and commit to building a diverse workforce on par with the collaboration and innovation required to address the most consequential challenges of our time.

NSCAI Report is a Call for US Leadership in Artificial Intelligence — for Supply Chain Security and Beyond

By Dr. Andrea Little Limbago, Interos VP of Research & Analysis

“We must reevaluate the meaning of supply chain resilience and security.” This is one of the many recommendations detailed in the 750+ page report released by the National Security Commission on Artificial Intelligence on Monday. Mandated within the 2019 National Defense Authorization Act, this independent commission was tasked with assessing U.S. readiness in artificial intelligence (AI), while specifically noting the requirements for U.S. leadership in advancing the development of AI for national security and societal benefits.

The report rings the alarm bells regarding the state of U.S. readiness in AI, while also stressing the need for powerful U.S. leadership in such a critical area. AI-enabled solutions will be the drivers of geopolitics and global markets for decades to come. Given this critical juncture in geopolitical and technological transformations, supply chain resilience plays a central role in the report’s AI roadmap toward advancing U.S. national and economic security.

“AI will not stay in the domain of superpowers or the realm of science fiction.”

For those who still view AI as something in the distant future, the report should be a wake -up call that the future is now. AI-enabled solutions continue to inspire and offer great potential for positive impact, but also already offer the foundation for widespread surveillance, repression, and misuse. It should not be viewed as science fiction but rather must be prioritized now and put to its most beneficial uses for national security and economic prosperity in democratic society.

Unfortunately, the report finds the U.S. is lagging behind and must act now to achieve AI readiness by 2025.

The report highlights the need to address the talent gap, institute organizational reforms at the Pentagon, and promote interoperability with allies and partners as foundational to preparing for this new world order. Modernizing the acquisition process and ensuring readiness to respond to domestic crises both are noted as critical to keep the economy functioning smoothly while advancing national security interest.  The need for these changes is urgent, as the pace of AI-driven changes continues to accelerate.

“The AI competition is also a values competition.”

Last June, Interos detailed the global transformations underway and the diverging paths toward techno-dystopia and techno-utopia. The report reviews this ideological battle between those who would use AI for advancing authoritarianism against those who would harness it for fostering and enhancing democracy. The AI report released this week highlights the need for U.S. leadership in shaping global AI norms, standards, and policies as part of this values competition. At its core, AI reflects the core values of a society, and we have already seen how it can fuel extremism, repression, and societal fractures.

Aware of these global transformations, the report notes the need for the U.S. to work with allies, partners, and the private sector to leverage the potential of AI to support democratic values as opposed to undermining them. At the same time, the U.S. must encourage innovation and collaboration to unlock the full, societal benefits of AI-enabled solutions – from curing diseases to addressing climate change to protecting civil liberties. As Interos discussed following the SolarWinds revelations, a major paradigm shift is required to best progress toward these opportunities while providing a counterweight to the global diffusion of techno-dictatorships. To do this, a networked approach is necessary.

 

“The U.S.-China competition is complicated by the complex web of supply chains.”

In concordance with last week’s executive order on securing our supply chains, the report repeatedly mentions the criticality of securing the supply chains fundamental to AI technology, especially microelectronics. “The federal investment and incentives needed to revitalize domestic microchip fabrication—perhaps $35 billion— should be an easy decision when the alternative is relying on another country to produce the engines that power the machines that will shape the future.”

The report returns frequently to the themes of reducing dependence on China (especially in the areas of hardware), building readiness and advancing innovation, and the need for a comprehensive federal approach to supply chain and data security. Decoupling entirely from the complex web of supply chains is extremely expensive, impractical, and also undesirable. Instead, the report advocates for targeted disentanglement as one element of reducing dependency on China, a path which requires the formalized implementation of trusted networks for it to succeed.

As part of this roadmap, the new AI report specifies the need for allies, partners, and the private sector in building trusted networks and specifically trusted supply chain networks. Importantly, reducing dependence must not be accompanied by economic nationalism; it requires collaboration across like-minded governments and the private sector. This collaboration must manifest in both the policy realm as well as through joint research and development and industrial policies that prioritize access to technologies, minerals, and medical supplies that are critical to societal well-being and national security.

“Looking to an AI-enabled Future.”

The report places AI as the engine of invention; those who best innovate and harness the power of AI will also shape the values and security of the post-pandemic world order. There is no time to spare in shaping this international technology order to favor democratic values and prosperity over repression and surveillance.

Technology will be the core driver of global markets and geopolitics. The report finds the U.S. lagging behind and encourages significant steps now to build readiness and competitiveness for this new world order. From building a digital corps to incentivizing U.S. technology competitiveness to restructuring global alliances and supply chains, the time for action is now. The U.S. – including both the private and public sectors – can either take leadership now in shaping this AI-enabled future or be shaped by it. At Interos, the operational resilience company, our Cloud-based platform leverages AI and machine learning to instantly illuminate the extended supply chains of government and private-sector organizations as well as to continuously monitor the manifold global risk factors impacting the nodes along those chains. 

To learn more about how you can better protect your supply chains, click here.