Supply Chain is Risky Business: Save Your Seat at our 2024 Risk Intelligence Summit today.  

Filter by Categories
Interview
News
Filter by Tags
survey
Filter by Resources Categories
Report
White Papers

Month: May 2024

Interos Takes Center Stage at Supply Chain USA: AI’s “Golden Moment” for Resilient Supply Chains (3 Key Takeaways)

Posted on by Dianna ONeill

Photo: Interos Industry Principal Patrick Van Hull (far right)

As 600+ supply chain leaders converged on Atlanta, one concept dominated all others. “AI’s golden moment is upon us,” said Zero100 CEO Kevin O’Marah in opening remarks for the 2024 edition of Supply Chain USA.

More than a “moment,” supply chain AI has surpassed critical mass at warp speed.

According to Gartner, 74% of high-performing supply chain organizations partner with IT to establish robust data security mechanisms for leveraging AI/ML, compared to only 61% of lower performers. Furthermore, McKinsey’s “The State of AI in 2023” report found that 65% of respondents said their organizations have adopted AI capabilities for supply chain management functions.

Interos Industry Principal Patrick Van Hull emphasized this tectonic industry shift during his main stage conference presentation alongside senior supply chain and technology leaders from General Mills, Chevron, and Amgen.

Van Hull stressed AI isn’t just about navigating challenges, but about “using AI to empower individuals to create meaningful, impactful results.”

Here are three additional key takeaways he shared:

1- AI can expand the scope and narrow the risk aperture. Imagine a crystal ball that enables enterprises to see potential disruptions and offers more profound insights into their ecosystem. What about sharing insights across functions in common tools that continuously monitor for changes and enable on-demand reporting? Augmenting human intelligence with the analysis of vast datasets ensures that supply chain leaders have more visibility to understand what’s most material to their enterprise when making informed decisions that align to business goals.

2- Harnessing the data goldmine is all about understanding acute business problems and aligning technology like AI efforts to enable people to solve them. However, the success of these initiatives hinges on a crucial factor: executive buy-in. C-suite leaders need to champion AI integration into supply chain management, driving the necessary cultural and procedural changes that will shape and sustain the future of supply chain management.

3- Traditional supply chain systems can be complex, making it challenging to see beyond point-to-point transactions. At its core, any effective supply chain relationship makes interactions more accessible and impactful. AI enhances these relationships by breaking down silos and enabling seamless information flow. AI empowers all stakeholders to collaborate more effectively to improve operational efficiency and sparks innovation and continuous improvement across the value chain.

While there’s so much more to digest and apply, the initial insights from Reuters Supply Chain 2024 highlight that organizations can build resilient, efficient, and agile supply chains across multiple inflection points:

  • Supply chains mapping: AI rapidly maps interconnected supply chains to reveal hidden failure points
  • Hidden insights streamlined and consolidated: AI uncovers valuable information and patterns from massive datasets
  • Proactive, not reactive: AI enables enterprises to anticipate and address disruptions before they strike.

The key to success is expanding the value chain scope, measuring performance and impact in innovative ways, and aligning the right data management strategies and executive support. Especially with the increasing influence and utility of AI, organizations have never been more enabled to turn risks into opportunities and build resilient supply chains that drive value creation.

 

Bracing for the Worst Hurricane Season on Record: NOAA’s Dire 2024 Forecast and How to Secure Your Supply Chain

Posted on by Dianna ONeill

The National Oceanic and Atmospheric Administration (NOAA) has issued an unprecedented warning for the 2024 Atlantic hurricane season, predicting it to potentially be the most active and destructive on record. A combination of exceptionally warm ocean temperatures and favorable atmospheric conditions could spawn up to 25 named storms, compared to an average of 14, including four to seven major hurricanes, compared to an average of three. The Atlantic hurricane season runs from June 1 to November 30.

NOAA’s Alarming Forecast

NOAA’s 2024 guidance is based on several factors:

  • Near-record sea surface temperatures: The Atlantic Ocean is experiencing among its warmest temperatures ever recorded, providing an ideal breeding ground for intense storm formation.
  • A rapid transition from El Nino to La Nina Conditions: La Nina conditions are typically associated with above normal hurricane seasons in the tropical Atlantic
  • Low wind shear: Forecasters anticipate lower-than-average vertical wind shear due to a transition from El Nino to La Nina conditions, which can disrupt the intensification and tracks of hurricanes, leading to more robust storm systems that can strike the coast.

With these conditions in play, NOAA warns that 2024 could surpass the record-breaking 2005 season, which saw 28 named storms, including the devastating Hurricane Katrina.

The Escalating Toll of Climate Disasters on Supply Chains

The potential impact of an unprecedented hurricane activity is part of a broader trend of escalating extreme weather worldwide, with serious implications for global supply chains and business continuity.

These continued climate shocks have exposed the vulnerabilities of complex and interconnected global supply chains, underscoring the urgency of comprehensive lifecycle risk management to mitigate threats.

Organizations that lack the ability to gauge supplier exposure to hurricanes and other disasters risk paralyzing disruptions that damage brand, reputation, and profitability.

Leveraging Catastrophic Risk Technology

Interos’ groundbreaking Catastrophic Risk technology is an advanced solution to help businesses navigate extreme weather. This AI-powered innovation provides organizations with a comprehensive and continuous view of their extended supply chain, enabling procurement and risk leaders to proactively identify and mitigate risks from hurricanes, wildfires, floods, and other catastrophes.

As an example, New Jersey-based Cooper University Health Care leveraged Interos’ Catastrophic risk intelligence to get ahead of Hurricane Idalia in 2023 as it barreled toward an area in Florida where several of the company’s suppliers are based.

“Interos gave us the ability to track potential impacts before the storm hit,” says Thomas Runkle, VP, Supply Chain. “We identified three suppliers in the path, two of which provide products to our system. We discovered one placed a cutoff on orders with no notice. Having acted on the new risk map data, we reached out in time to get several days of orders placed before they were stopped due to the hurricane.”

By leveraging advanced supply chain risk intelligence and machine learning, Interos’ technology can visualize sub-tier suppliers impacted by a range of hazards, including weather patterns, climate, communication, infrastructure, and healthcare capacity.

This proactive approach empowers businesses to pre-plan months in advance and take necessary steps to minimize disruptions.

Interos’ Catastrophic Risk intelligence provides foundational risk intelligence to fuel key strategies for achieving climate-resilient supply chains, including:

  • Mapping to Diversify the Supplier Base: Explore alternative suppliers in different geographic regions to reduce reliance on a single location or region prone to climate disasters.
  • Real-time Risk Identification to Support Business Continuity Plans: Develop and regularly update comprehensive business continuity plans that outline strategies for maintaining operations during and after hurricanes, floods, wildfires, or other natural disasters.
  • The World’s Largest Knowledge Graph to Enhance Inventory Management: Understand your extended supply chain to support maintaining strategic inventory levels of critical components and materials to mitigate the impact of supply chain disruptions.

As the 2024 hurricane season approaches and the threat of climate disasters escalates, it is crucial for businesses to prioritize supply chain resilience and embrace AI-risk capability like Interos’ Catastrophic Risk Visibility technology.

By taking proactive measures and leveraging advanced lifecycle risk intelligence, organizations can better navigate the challenges posed by extreme weather events and ensure the continuity of their operations, while mitigating the staggering economic toll of supply chain disruptions.

 

Xinjiang Forced Labor Sanctions: Homeland Security Move Underscores Five Pillars of Combatting Unethical Labor in Global Supply Chains

Posted on by Interos

By Warren Smith & Dianna O’Neill

In a significant move, the U.S. Department of Homeland Security (DHS) announced additional sanctions and measures targeting forced labor practices in China’s Xinjiang region on May 16, 2024. These measures underscore the U.S. government’s commitment to combating human rights abuses and holding bad actors accountable.

They also highlight the growing international pressure on companies to ensure their supply chains are free from forced labor.

The new actions include:

  • Imposing visa restrictions on Chinese officials involved in repression and forced labor practices.
  • Expanding enforcement of the Uyghur Forced Labor Prevention Act (UFLPA) to cover more products and sectors; a total of 65 China-based firms are now banned under the act.
  • Increasing coordination with allies and partners to address forced labor in global supply chains.

The Complexities of Forced Labor in China

Global supply chains are grappling with the significant challenge of the prevalence of forced labor, notably in regions like China’s Xinjiang, a textile manufacturing center. Forced labor in China presents multifaceted challenges, including supply chain complexity, lack of transparency, legal and political obstacles, difficulty tracing raw materials, and the prevalence of subcontracting and informal sectors.

China’s economic landscape is deeply entwined with practices that many international observers and human rights organizations classify as forced labor. The situation in the Xinjiang Uyghur Autonomous Region has garnered particular attention, with reports suggesting that Uyghurs and other ethnic minorities are being coerced into working in various industries, from cotton fields to high-tech manufacturing sectors.

Five Key Strategies for Companies to Mitigate Forced Labor in Global Supply Chains

To address the issue of forced labor in their supply chains, organizations must take proactive measures to mitigate forced labor, and other critical ESG threats. Interos data shows executives estimate that ESG-related cost increases or revenue losses companies at $44M annually.

Here are five actions to prioritize:

  1. Conduct Comprehensive Supply Chain Mapping: Gain visibility into the extended supply chain, from direct suppliers to nth-tier sub-suppliers, to identify vulnerabilities. AI-first risk intelligence from Interos enables advanced analytics and real-time monitoring to scrutinize supply chains for regulatory violations and other ESG concerns.
  2. Implement Robust Due Diligence Processes: Develop and enforce rigorous due diligence procedures to complement technology-based assessments. This includes assessing suppliers’ labor practices through audits carried out by accredited third-party agency, worker interviews, and document reviews.
  3. Leverage Advanced Technology and Data Analytics: Utilize cutting-edge technologies like Interos’ platform, which evolve enterprises from lagging to leading indicators to drive proactive mitigation. Interos’ expanded ESG risk model monitors a range of critical attributes reflecting the multi-faceted nature of ESG threats, including forced labor, emissions, diversity, foreign ownership, and other critical attributes.
  4. Collaborate with Industry Partners and Stakeholders: Engage with industry associations, non-governmental organizations, and government agencies to share best practices, align efforts, and collectively address forced labor challenges.
  5. Promote Transparency and Accountability: Implement transparent reporting mechanisms, establish clear policies and codes of conduct, and hold suppliers accountable for violations through corrective action plans or termination of business relationships.

Case Studies: Accelerating Ethical Supply Chains with Interos

Interos survey data shows more than a third of leaders at large enterprises are stepping up their ESG investments, and over half acknowledged supply availability was paramount. Global organizations using Interos have gained a sharper picture of supply chain risks, enabling proactive strategies, yielding clear results:

  • A leading global airline leverages Interos to ensure the highest standard of ethics and compliance across its apparel supply chain and other sourcing channels.
  • A supermajor oil and gas company leverage Interos to ensure adherence to 30+ EU regulations related to labor, emissions, and other areas.
  • A major retailer utilizes Interos’ foreign ownership data to determine, reduce and remove slave labor from its product lines.

Interos is leading a broader supply chain risk revolution towards transparency and ethical responsibility across industry, enhancing corporate brand, reputation, and profitability.

By taking proactive steps and leveraging the Interos platform, organizations can navigate the complexities of forced labor in China, and elsewhere, to foster ethical, responsible, and adaptable supply chains that meet, and surpass, the demands of today’s interconnected economy. Across sector, technology and data will continue to play a crucial role in shaping responsible and risk-resilient supply chains, with companies like Interos, and its innovative global customers and partners, at the forefront of this transformation.

Read more on navigating supply chain ESG risk and complexity HERE.

 

 

U.S.-China Trade Wars Reignite: White House Announcement on New Tariffs References “Supply Chains” Eleven Times

Posted on by Dianna ONeill

Sweeping new U.S. tariffs on Chinese clean-energy products are inflaming tensions between the world’s two dominant economies, raising the stakes for risk leaders already navigating concurrent crises in the Middle East and Europe.

The sanctions announced today by the Biden administration target $18 billion in Chinese imports, quadrupling existing levies on Chinese-made EVs, while imposing new tariffs ranging from 50% on solar panels to 25% on other essential sectors including semiconductors, aluminum, critical minerals, batteries and more.

The White House statement repeatedly references shoring up U.S. supply chains amid anti-competitive practices from China, noting “China’s forced technology transfers and intellectual property theft have contributed to its control of 70, 80, and even 90 percent of global production for the critical inputs necessary for our technologies, infrastructure, energy, and health care—creating unacceptable risks to America’s supply chains and economic security.”

The new tariffs build on existing Trump-Biden Chinese sanctions, which the global think tank Tax Foundation estimates will cut long-run GDP by 0.21%, wages by 0.14% and employment by 166,000 full-time equivalent jobs.

The Ripple Effect: How Geopolitical Events Impact Your Supply Chain

 Whether fueled by trade disputes, military conflicts, or regulatory changes, political shocks can reverberate throughout global supply chains, disrupting procurement, production, and distribution.

This dynamic is exacerbated by complex and interconnected supply chains that hide multiple potential sub-tier failure points.

A U.S. Federal Reserve report reveals a heavy dependence on foreign suppliers across various industries, citing the automotive (23.7%), machinery and equipment (18.4%), basic metals (16.8%) and electrical equipment (16.5%) sectors among the top sectors relying on foreign value for exports. This globalized reality necessitates a proactive approach to supply chain risk management.

Beyond Borders: The Globalized Reality of Modern Procurement

 The key to strong collaboration with supply partners includes a heavy emphasis on real-time analysis of the extended supplier base – ensuring all stakeholders are positioned for economic success amid volatility.

Here are five strategies for securing supply chain lifecycle risk for maximum adaptability:

1. Implement Real-Time Monitoring and Intelligence

Real-time extended supply chain monitoring enables organizations to detect and gain intelligence for proactive actions from fluid risk events quickly. One leading global defense contractor used supply chain life cycle risk intelligence from Interos to identify concentration risk in a vital $5 billion weapons program, isolating and mitigating the threat in days, rather than weeks, before there was a ripple effect across the enterprise.

2. Transition to Leading Indicators

Moving from lagging to leading risk indicators ensures organizations keep pace with click-speed disruptions. Interos intelligence on another simmering political issue – China’s potential annexation of Taiwan – reveals U.S. companies have almost 70,000 direct (tier-1) relationships with Taiwanese suppliers. In the event of a Chinese attack, Bloomberg Economics estimates up to $10 trillion in potential losses, or about 10% of global GDP. Interos is the only solution to quantify and score enterprise risk to plan for a crisis at this level, enabling enterprises to tailor their risk register for threat management by exception, at scale.

3. Utilize Predictive and Prescriptive Insights

Supply chains are a big data problem built on massive data sets. By leveraging AI to consolidate and analyze trends, companies can proactively identify vulnerabilities and implement preemptive measures. For instance, a global energy company facing rising levels of ESG risk leveraged Interos’ platform to triple its supplier due diligence capacity in one year, without expanding headcount.

4. Invest in Advanced Supply Chain Mapping

AI-powered continuous supply chain mapping enables companies to proactively identity suppliers facing urgent geopolitical and other risks, at speed and scale. In the case of the Russia-Ukraine conflict, Interos’ platform enabled customers to instantly identify key sub-tier suppliers located in harm’s way for alternate sourcing.

5. Foster Collaboration and Information Sharing

Cross-enterprise teams including finance, operations, risk, procurement and sourcing play critical roles in next generation supply chain risk management. Establishing comprehensive and consistent communication channels for trusted risk intelligence is the foundation for speed and clarity in response. Interos ensures companies better understand and align against systemic threats within a single, intuitive platform.

These strategies are essential starting points in meeting the scale and scope of today’s global disruptions. By navigating multi-factor risk with foresight and innovation, organizations can secure their brand, reputation, and profitability – a win for stakeholder at every supply tier of the supply chain.

Read more about global supply chain threats and opportunities in Invisible Threats: Interos’ Annual Supply Chain Industry Risk survey.

 

Canada’s Updated B-10 Guidance Becomes Reality: Mastering Supply Chain Regulatory Challenges

Posted on by Dianna ONeill

Canadian financial institutions are grappling with stringent updated regulations governing third-party relationships. After years of development, the Office of the Superintendent of Financial Institutions (OSFI) formally implemented Guideline B-10: Third-Party Risk Management (TPRM) today.

Unlike its predecessor, B-10 adopts a nuanced risk-based approach spanning the entire lifecycle of supply chain risk, mandating broader accountability and N-tier visibility for organizations reliant on third-party vendors, suppliers, and partners.

B-10 reflects the broader transformation and maturity of TPRM, fueled by a wave of industry challenges:

  • Rising Cybersecurity Threats: Surging cyber-attacks on third-party applications pose serious threats to data and operations, with Gartner reporting 61% of all U.S. businesses were directly impacted by software supply chain attacks between 2022 and 2023.
  • Consequences of Noncompliance: Severe penalties, including fines, damage, and service interruptions, underscore the importance of compliance.
  • Financial Pressures and Digital Disruptions: digital disruptions ripple across interconnected digital supply chains, exposing organizations to unforeseen external shocks.

The TPRM threat landscape is constantly evolving. Organizations need to aggregate changing risk conditions, look for patterns, and prioritize vulnerabilities. Managing multi-tiered complexity at speed and scale is virtually impossible without next generation AI systems that transform systemic threats into strategic advantage.

Interos’ critical risk intelligence platform achieves this by continuously monitoring lifecycle supply chain risk to fortify critical capability.

  • Advanced Risk Identification: Interos customers can tailor their risk register to what matter to them, including critical compliance gaps, financial instability, cyber-attacks, and geopolitical threats – working with Interos’ platform, a top ten A&D customer identified compromised suppliers and alternative options within 24 hours of the initial signal highlight.
  • Continuous Monitoring: Real-time N-tier monitoring helps organizations pre-empt threats with actionable intelligence to get in front of emerging risk – a healthcare company used Interos’ catastrophic risk intelligence to pre-position inventory 24 hours before their vendor shut operations due to a hurricane.
  • Forward-looking Intelligence: Interos analyzes historical data and identifies patterns, speeding enterprise response and focus – one global financial used Interos to identify “repeat offenders” within their third-party network, gaining a 24-hour head start on a cyber vulnerability.
  • Efficiency and Scalability: Automation through AI streamlines due diligence, monitoring, and reporting – for onboarding alone, a leading global airline estimated a 40% efficiency improvement, projecting $250,000 in savings, using Interos.

Leveraging AI-powered third-party risk monitoring technologies is not just a competitive advantage but a critical necessity for global businesses seeking to safeguard operations, protect stakeholders, and ensure long-term profitability in an increasingly complex risk landscape.

Given the $3T annual economic impact of global supply chain disruption, companies cannot wait for the next crisis. Proactive strategies are the only way forward. Without real-time insight into N-tier supply chain lifecycle risk, shocks remain inevitable.

In the words of Interos Founder and Executive Vice Chair Jennifer Bisceglie, “Risk is a constant imperative. Companies must not overcomplicate their response; they can navigate fluid environments with forward risk intelligence that eliminates enterprise noise and empowers decisive action.”