Supply Chain Risk Management Methods Lag Behind New Risks—and Costs are Rising

Monitoring Frequency

Supply chain shocks are causing debilitating effects on large organizations, especially financially. This impact alone is enough to cause significant damage. With so much on the line, businesses need to know if their current supply chain risk management (SCRM) tools and processes are up to the challenge.

Our new whitepaper, “Supply Chain Disruptions and the High Cost of the Status Quo,” based on a survey of 900 enterprise decision makers about their risk management practices, found:

  • Only 34% assess their global supply chain on a continuous basis.
  • The remaining 66% do so every month or less.

That means the majority or organizations are operating with large gaps in their supplier visibility and risk mitigation solutions. As discussed in a previous post, that vulnerability is costly:

  • On average, global supply chain disruptions cost enterprise-level organizations $184 million in lost revenue per year.

Assessment Methods

The frequency of measurement depends on the type of SCRM methods an organization uses —manual or automated. The former measures supply chains on an irregular basis and at one point in time, while the latter provides feedback in real time on a continuous basis. Nearly three quarters (74%) of organizations use manual methods at least some of the time, with only just over a quarter (26%) solely using automated methods.

There is a current reliance for infrequent monitoring in all sectors. The enormous financial impact many suffer proves current methods are ineffectual, and organizations need to focus on switching to more automated methods because they are still blind to many of the shocks occurring in their supply chain.

Therefore, it’s not surprising that the majority of decision makers (63%) admit that they need to make improvements to their ability to continuously monitor their supply chains.

 

Visibility is currently a critical weakness among many organizations, especially the ability to see in-depth across sub-tiers in the supply chain. Automatic methods can alleviate this deficit in organizations’ supply chain risk management systems. In fact, when asked to name the benefits of using a fully automated method would be, 64% rank supply chain visibility (ecosystem awareness) as the greatest benefit.

Automatic methods may help to reduce the financial burden brought about by disruptions, with two other benefits which rank highly including cost avoidance (56%) and cost reduction (56%). What is clear is that all supply chain decision makers (100%) believe there are benefits to using automatic methods.

Organizations should view an effective and robust monitoring system as essential. Current methods are likely inadequate at preventing large-scale financial damage as a result of supply chains shocks. Those who employ the most efficient methods are likely to be in the best position to protect themselves going forward.

Get More Data on SCRM/TPRM Practices and Improving Risk Mitigation

Our paper goes into more detail on the importance of visibility and supply chain risk management needs, as well as what current practices are helping organizations mitigate risk and which are not up to the task. Get all the insights here.

As Disruptions Grow, So Does the Quest for Better Supplier Risk Management

The diverse and successive nature of supply chain shocks is challenging every organization. Combine that with the high costs associated with disruptions and businesses have a loud and clear wake-up call: better supply chain risk management and improved monitoring are critical needs in today’s environment.

It’s therefore no surprise that supply chain risk management and resilience are going to become increasingly important to organizations. Our new whitepaper, “Supply Chain Disruptions and the High Cost of the Status Quo,” based on a survey of 900 enterprise decision makers about their risk management practices, found:

  • 50% of all surveyed organizations say supply chain risk management (SCRM) and resilience will be their top business priority in two years’ time—while just 39% say they are top priorities today.

As SCRM becomes more critical, the frequency with which those at the board-of-director level discuss the topic reflects this. Overall, over two-fifths of boards (21%) are talking about supply chain risk on at least a weekly basis, with 78% doing so at least monthly.

Supply Chain Visibility

A crucial element of supply chain risk management is the level of visibility that organiza­tions have throughout their supply chain. The less the organization can see across its supply chain, the less it can accurately predict. Intuitively, organizations experience more significant fallout due to disruptions when visibility into their supply chains is lower.

With that being said, it’s not a surprise that the vast majority (88%) of organizations say visibility into their global supply chain is more important now than it was two years ago. The succession, and at times, overwhelming number of recent shocks and related impacts demands that greater importance is placed on visibility.

However, while decision makers note the value that visibility into supply chains can provide them, this does not necessarily translate across the different tiers in an organization’s supply chain.

In fact, visibility levels drop off sharply below the second tier of organizations’ supply chains:

  • 80% say their organization has instantaneous visibility/the ability to continuously monitor their supply chains in the second tier
  • This drops to only 50% at the third and fourth tiers, and only 22% say they can do this at the ninth tier and below

Get More Data on SCRM/TPRM Practices and Improving Risk Mitigation

Our paper goes into more detail on the importance of visibility and supply chain risk management needs, as well as what current practices are helping organizations mitigate risk and which are not up to the task. Get all the insights here.

Supply Chain Disruptions Cost Millions—Here’s How they Add Up

Ensuring supply chain risk management (SCRM) methods are robust enough to keep threats at bay and help organizations stay secure is a critical need today. But a succession of large shocks—including the COVID-19 pandemic, multiple high-profile cyber breaches, and ongoing international trade disputes—have exposed deep supply chain vulnerabilities and revealed shortcomings in SCRM and third-party risk management (TPRM).

Surprisingly, when shocks do occur, little is known about the true extent of the disruption, the wider organizational costs, or damage extending beyond that of a financial nature. Our new whitepaper, “Supply Chain Disruptions and the High Cost of the Status Quo,” based on a survey of 900 enterprise decision makers about their risk management practices, fills in many of those knowledge gaps:

  • On average, global supply chain disruptions cost enterprise-level organizations $184 million in lost revenue per year
  • 83% have suffered reputational damage because of supply chain problems

Looking Deeper at Disruption Data

Our survey found that supply chain events impact geographies and industries in unique ways.

The average revenue loss rises to $228 million for U.S. organizations, compared to UK and DACH where it costs $146 million and $145 million, respectively. There is also a large difference between sectors, with disruptions costing those in IT and technology ($194 million) and aerospace and defense ($193 million) more than financial services, where the average cost to revenue drops to $164 million. However, no matter the location of the organization or the sector they operate within, these costs are an unsustainable and debilitating expenditure.

The cost of supply chain disruptions extends beyond an organization’s revenue, as brand, reputation, and customer perception are also negatively impacted. It’s therefore no sur­prise that more than four in five (83%) of those surveyed say their organization has suf­fered reputational damage as a result of supply chain disruption. Again, those in the U.S. see the most severe impact in this regard, where 87% have suffered, compared to organi­zations in the Nordic countries where 77% say the same.

Understanding Supply Chain Risk Factors

The number of supply chain shocks has grown in recent years. Each disruption proves troublesome for organizations who are likely still reeling from the effects of the previous one. In fact, fewer than 1 in 10 enterprise organizations (6%) say they have not been impacted by supply chain disruptions over the past two years. We can attribute these disruptions across a variety of supply chain threats, with risk spread fairly evenly across all factors. To illustrate this, over the past two years, decision makers report that shocks have been spread across cyber risk and breaches (52%), financial risks (50%), and environmental/social/governance (ESG) (41%), among others.

Decision makers understand the critical need to use SCRM and TPRM to protect themselves against all types of supply chain risk. More than four in five (88% to 81%) believe it is important to guard against all six risk factors. This demonstrates that even if they are not directly impacted by every threat, decision makers understand the wide-ranging sources of disruptions to their supply chains.

Get More Data on SCRM/TPRM Practices and Improving Risk Mitigation

Our paper goes into more detail on the importance of visibility and supply chain risk management needs. It also includes current practices that are helping organizations mitigate risk. Get all the insights here.

Press Release: Interos Raises $100 Million to Protect Supply Chains from Disruption

NightDragon leads the round, which values Interos at more than $1 billion, making it one of the few female-led unicorns

ARLINGTON, Va., July 22, 2021 (GLOBE NEWSWIRE) — Interos, the supply chain risk management and operational resilience technology company, today announced Series C financing of $100 million led by NightDragon. Current investors, including Kleiner Perkins and Venrock, are also participating. This financing brings Interos’ valuation to over $1 billion, and establishes the company as a unicorn.

Female-led Unicorns Are Extremely Rare

Interos, led by CEO Jennifer Bisceglie, becomes one of the few female-led unicorns. According to Crunchbase, “Female founder-CEOs run only 4% of the ‘unicorn’ startups valued at more than $1 billion. Which means that, proportionally, these successful venture-backed female founders are even more rare than female Fortune 500 CEOs, who currently run 7.4% of the country’s largest companies.”

Global Supply Chain Severely Strained Impacting Both Businesses and Consumers

The new funding will help Interos accelerate its business at a time when supply chain vulnerabilities are front and center for companies around the world, following major supply chain shortages due to the pandemic and cyberattacks on organizations like SolarWinds, Kaseya and Colonial Pipeline that put company operations at risk. A severely strained global supply chain is translating to consumers as countless product shortages and to businesses as heavy bottom line and reputational impacts. The Interos Annual Global Supply Chain Report recently revealed that supply chain disruptions cost large companies, on average, $184 million a year, and 83% have suffered reputational damage.

Interos Protects Global Supply Chains from Disruption

An early warning system to identify developing disruptions and supplier problems in real-time is critical to driving business operational resilience, macro economic growth, public safety and national security. Numerous Fortune 500 brands, the U.S. Department of Defense, and NASA are using Interos’ artificial intelligence and machine learning-based cloud platform, which serves as this early warning system. The platform allows customers to instantly map their global supply chains to the Nth tier, continuously monitor those suppliers, flag supplier problems in real-time, and model ripple effects so problems can be quickly resolved before disruption occurs.

Interos Proactively Reveals Physical, Cyber and ESG-Related Supply Chain Risks

The recently updated Interos platform monitors for both physical and digital supply chain issues across  dozens of risk categories, including financial, operational, governance, geographic, and cyber factors. The platform also monitors ESG-related risk factors, such as unethical labor practices and greenhouse gas emissions. The U.S. SEC is developing new ESG reporting requirements for public companies, but this type of risk is currently a major, but unnecessary, blind spot for organizations.

Supply Chain Risk Now a Board Imperative

Global supply chain risk has become a board-level imperative with 78% of respondents to the Interos survey reporting their boards now confer on this topic at least once per month. While 39% say supply chain risk is their business’ current top priority, 50% say it will be in two years.

“COVID-19 and other macro and digital supply chain disruptions over the past year have caused boards of directors and other leaders to awaken to the tremendous impact supply chain disruptions can have on operational resilience, business performance and reputation,” said Jennifer Bisceglie, CEO of Interos. “Manual and annual supply chain risk monitoring is urgently moving to automated and continuous, and that can only be accomplished through AI/ML-based technology. This funding will allow us to accelerate our mission of helping organizations fix supply chain issues before they cause operational disruption.”

Interos Experiencing Explosive Growth

Interos has logged a compound annual growth rate of 303% in the last two years. It notched a 104% increase in its annual recurring revenue in 2020 over the previous year and recorded 132% growth in the number of employees over the same period.

“Over the past year, we have seen that supply chain risk represents one of the biggest gaps for cybersecurity and business resiliency in history,” said Dave DeWalt, Founder and Managing Director, NightDragon. “We are proud to partner with Interos to accelerate their business and help companies around the world close the gap when it comes to supply chain risk.”

About Interos

Interos is the operational resilience company — reinventing how companies manage their supply chains and business relationships — through our breakthrough SaaS platform that uses artificial intelligence to model and transform the ecosystems of complex businesses into a living global map, down to any single supplier, anywhere. Reducing months of backward-looking manual spreadsheet inputs to instant visualizations and continuous monitoring, the Interos Operational Resilience Cloud helps organizations reduce risk, avoid disruptions, and achieve superior enterprise adaptability. Businesses can also uncover game-changing opportunities to radically change the way they see, learn and profit from their relationships. Based in Washington, DC, Interos serves global clients with business-critical, independent relationships across their primary operational areas: supply chain, financial, cybersecurity, regulatory and ESG compliance, and geographical. The fast-growing private company is led by CEO Jennifer Bisceglie and supported by investors Venrock and Kleiner Perkins. For more information, visit www.interos.ai.

About NightDragon

NightDragon is an investment and advisory firm focused on growth and late-stage investments within the cybersecurity, safety, security and privacy industries. Its platform and vast industry network provide unparalleled threat insights, deal flow, market leverage and operating expertise to drive portfolio company growth and increase shareholder value. The NightDragon team has more than 25 years of operational and market expertise and was founded by Dave DeWalt and Ken Gonzalez, who served as senior executives leading technology companies such as Documentum, EMC, Siebel Systems (Oracle), McAfee, Mandiant, Avast and FireEye. For more information, visit www.nightdragon.com.

Biden’s latest supply chain order expands ban on US investment in China

The steady pace of commercial and investment restrictions continued yesterday with the Biden Administration’s latest Executive Order, “Addressing the Threat from Securities Investments that Finance Certain Companies of the People’s Republic of China”. This latest Executive Order follows the same pattern of accelerated industrial policy we’ve been detailing as the uptick continued throughout 2020 and into 2021. However, there are some notable differences with this Executive Order that only adds to the growing complexity of the regulatory landscape as geopolitical and national security concerns intersect with economic and industrial policy, with widespread ramifications across supply chains.

An All of Government Approach

There has been a growing all-of-government focus on supply chain and cybersecurity resilience, with an unprecedented focus on excluding or banning commercial or investment relationships with specific companies (and often their subsidiaries and affiliates) deemed either a national security threat or facilitators of human rights violations, or at times both. From the Department of Commerce’s Bureau of Industry and Security Entity Lists to Section 889 of the 2019 National Defense Authorization Act to the Department of Treasury’s Office of Foreign Assets Control, there have been over 350 Chinese entities with whom U.S. companies and/or federal government partners are prohibited from engaging in commercial or investment relationships.

Subtle Changes from Previous Orders

This Executive Order similarly includes investment restrictions, however there are some nuances that do deviate from previous additions. It builds upon November’s Executive Order 13959 which prohibited financial transactions from entities identified by the U.S. government as “Communist Chinese military companies”. That November Executive Order, in turn, was informed by several lists produced by the Pentagon last year and in January in accordance with Section 1237 of the 1999 National Defense Authorization Act requirement for the Pentagon to produce and update a list of Chinese companies identified by the Pentagon with links to the Chinese military. However, some of the entities on the Section 1237 lists have since sued the U.S. government for inclusion on the list, and Xiaomi has since been removed from the list following their lawsuit.

In the latest Executive Order, the companies listed under last year’s Executive Order, also referred to as the Non-SDN Communist Chinese Military Companies List (Non-SDN CCMC), have been superseded by the Non-SDN Chinese Military-Industrial Complex Companies (Non-SDN CMIC) list introduced by yesterday’s Executive Order. To this end, several companies previously listed on the Non-SDN CCMC list are no longer listed on the Non-SDN CMIC list. However, there are 59 companies in total on the Non-SDN CMIC list introduced in yesterday’s Executive Order and the scope was expanded beyond just those with connections to the Chinese Military to also include those in surveillance and technology, including Huawei and Hikvision. Moreover, the Non-SDN CMIC list will be fully under the purview of Treasury, rather than Defense, and will take effect on August 2, 2021.

What Comes Next?

With a focus on countering surveillance and repression, yesterday’s Executive Order demonstrates a continued focus on building trustworthy and secure supply chains, especially in the areas of emerging technologies. In fact, with a G7 Summit only a week away, the U.S. may take the opportunity to coordinate industrial policies and restrictions on capital flows with allies and like-minded partners. As geopolitical tensions continue and vulnerabilities and dependencies across supply chains emerge, these kinds of restrictions are likely to persist as the new normal in a post-pandemic global order. Unfortunately, there is yet to be an openly available, one-stop-shop integrating these lists. Interos continues tracking and updating our restrictions data and analysis, providing holistic and evolving insights into this ever-changing global regulatory landscape.

The Resilience Operations Center: Understanding Risk and Identifying Assets

The following is an excerpt from “The Resilience Operations Center: A New Framework for Supply Chain Risk Management.” Download the ebook or request a print copy here.

An organization’s ability to create operational resilience depends on agile and informed teams, intelligent use of data, and fast adaptation to changing circumstances. The Resilience Operations Center (ROC) framework—which updates supply chain risk management (SCRM) and third-party risk management (TPRM) approaches—helps deliver on those requirements. Whether you build a virtual or organizational ROC, it will be the foundation you rely on when facing adversity and will empower your organization to deliver for all stakeholders, no matter what challenges arise.

Laying the ROC Groundwork

Risks are everywhere in today’s landscape. The ability to identify ongoing and emerging threats and vulnerabilities and proactively adapt and respond to them through resilient behaviors can help your business thrive. Nowhere is this more important than in your approach to managing operational risks arising from supplier outsourcing decisions.

Organizations need to focus on the operational resilience that is derived from building a joint business-supply chain ecosystem. The concept of a supply chain ecosystem is at the center of effective management of supplier risk in our complex, constantly evolving world. Resilience is the ability to mitigate the consequences of unplanned events, manage adversity, and navigate manmade as well as natural disasters. Resilience demands forecasting and planning for different scenarios while continuously evaluating key organizational risk factors. Connectedness—a willingness to understand your suppliers’ interests, build trust, and act together with them for the strategic good of all—contributes to resilience.

Aligning SCRM/TPRM with Strategic Priorities

Aligning your SCRM or TPRM program with strategic business objectives can help you achieve supply chain operational resilience. As a risk management practitioner, you must understand which assets are critical to your business. To begin identifying them, ask the following questions:

  • What are your industry’s critical assets?
  • How are they used?
  • How are they derived, manufactured, and transported?
  • Where are information assets stored, sent, and shared?
  • Who has access to your assets at each step throughout the supply chain process?

Critical assets vary across industries, and could include the following:

  • Financial services: Banking customer Personally Identifiable Information, including name, address, and account number
  • Healthcare: Patient Protected Health Information, including name, date of birth, and Social Security number
  • Retail: Customer payment card industry data, including card number, expiration date, and Card Verification Value
  • Pharmaceuticals: Proprietary drug formulations
  • Manufacturing: Process patents and other proprietary information

This knowledge, combined with risk appetite (the amount of risk a business is willing to assume to achieve its strategic goals), allows you to implement effective, efficient, and resilient business operational strategies. This provides the ability to prevent disruptions in service or product delivery. It also enables organizations to minimize the impact of and recover quickly from unforeseen events, including unlikely black swan events.

Identifying Key Business Operational Risks

Which operational risks are greatest for your organization? Not all risks are created equal, and they vary by industry. Once you have identified the risks, you need to understand how the organization is monitoring and responding to them.

  • Financial: Trending, growth, solvency, soundness
  • Operations: Bankruptcy resiliency, counterfeiting, business cost trends
  • Governance: Compliance practices, including U.S. and international regulations, country-specific risks, management turnover
  • Geographic: Pandemic impact, corruption and political violence concerns, infrastructure stats
  • Cyber: Data breaches and emerging cyber risks

To achieve resilient operations, you need to expand your horizons to include the operating environments within your extended supply chains, including all tiers and their risk factors. This process should be ongoing so you can spot and address current and emerging risks before they affect the business.

Beyond the obvious cybersecurity and disaster recovery/business continuity risks affecting the supply chain, you should consider geographic and concentration risks, financial disruptions, operations process risks, geopolitical instability, regulatory changes, and gaps in SCRM programs. Environmental, social, and governance (ESG) risks also need to be addressed. This requires working with suppliers to proactively communicate and exchange information to create a strategic advantage and safe operating environments for all participants. The end goal is being able to respond quickly to protect the business and its customers.

More Disruptions are Coming—Get the ROC Book

The Resilience Operations Center book goes into more detail on these and other topics, including identifying stakeholders, telling your SCRM story, and creating business value through supply chain relationships. Get a copy of the book here and put your supply chain and your organization on the road to operational resilience.

Biden EO on Climate-related Financial Risks Sends Clear Mandate to Clean Up Global Supply Chain

Hot on the heels of the recent Cybersecurity Executive Order (EO) and February’s order on securing the supply chain, on Thursday, May 20th, the Biden administration published another EO, this time on climate-related financial risk. The order instructs federal agencies to take steps to identify and mitigate the financial impacts of climate change to citizens, federal programs, and businesses.

The order outlines the clear danger posed to global supply chains by climate change. It also articulates the need for quantifiable metrics to assess climate-driven supply chain risk and financial risk, as well as the need to integrate those metrics into broader risk models.

The need for addressing these long-standing risks is clear. 2020 saw an unprecedented rise in climate-related natural disasters. In the first 9 months of the year alone, 16 weather disasters caused well over $1 billion dollars in direct damages, and untold losses in terms of supply chain disruption. In some places, sea levels are rising as fast as an inch per year. While no single government action can address the staggering impact these disruptions have on supply chains and economic activity, the EO is certainly an impressive and thorough start.

Breaking Down the EO

Beginning with an overview of policy objectives, the EO directs senior policy advisors, the Secretary of the Treasury, and the Director of the Office of Management and Budget to develop, within 120 days, a comprehensive strategy for the “measurement, assessment, mitigation, and disclosure of climate-related financial risk.” There are certainly immediate steps agencies can take to identify their own risk, but any realistic measurement of the true impact of climate-related financial risk must include a deep and continuous analysis of an agency’s supply chain.

The order also makes a clear call for better information sharing of climate-related financial risk information, instructing the Financial Stability Oversight Council (FSOC) to facilitate “the sharing of climate-related financial risk data and information among FSOC member agencies and other executive departments and agencies as appropriate.” This kind of information sharing has historically proven to be a challenge in and outside the federal government, with many organizations struggling under the burden of siloed, legacy systems that use inconsistent metrics and monitoring methods.

This EO makes a clearer case than ever for agencies to adopt common-use tools that can monitor climate-related financial risk, and seamlessly share that information for maximum, government-wide benefit.

The order further instructs several federal agencies to begin a comprehensive review of existing climate-related financial risks to “ensure that major Federal agency procurements minimize the risk of climate change, including requiring the social cost of greenhouse gas emissions to be considered in procurement decisions and, where appropriate and feasible, give preference to bids and proposals from suppliers with a lower social cost of greenhouse gas emissions.”

Measuring the Social Impact of Climate-related Financial Risk in Supply Chains

The EO also immediately directs the Federal Acquisition Regulatory Council (FARC) to consider amending the Federal Acquisition Regulation (FAR) to require major federal suppliers to disclose not just “greenhouse gas emissions and climate-related financial risk” but to also require “ the social cost of greenhouse gas emissions to be considered in procurement decisions and, where appropriate and feasible, give preference to bids and proposals from suppliers with a lower social cost of greenhouse gas emissions.”

Should the FARC agree with this recommendation, there would be an immediate and immense impact to Federal contractors. Objectively assessing and reporting on the often indirect, but very real, social impacts of climate-related financial risk could prove a difficult task without widespread adoption of intelligent tools that can comprehensively measure and report on an organization’s entire supply chain ecosystem.

The order also directly countermands rules set in place by the Trump administration, directing the Labor Secretary to undo actions taken by the previous president that sought to stop investment firms from accounting for ESG factors in managing pensions and retirement accounts.

While the specific outcomes of this EO are still up to choices made at the agency directorate-level, when taken in context with other global regulatory actions, such as Germany’s Initiative Lieferkettengesetz, or the EU’s Sustainable Finance Disclosure Initiative, a clear mandate emerges: Governments are beginning to put teeth behind their words and are prioritizing climate and ESG risk as key area of concern. A time is coming where organizations can no longer skate by on just their word. They will have to provide detailed and objective proof of their commitment to a sustainable environment and mitigating risks from climate change across the entire global supply chain.

Interos

The Interos cloud solution gives you an instant and continuous view of climate-related financial risk across every connection in your digital and physical supply chains. With the power of artificial intelligence and machine learning, any organization can create a living map of their business ecosystem so they can monitor ESG and financial risk in real time, model scenarios, and predict outcomes. Learn more here, or contact us for a demonstration.

Interos Launches Campaign to Address Need for De-Risking the Global Supply Chain to Ensure Business Operational Resilience and Global Economic Health

AI-based Platform Continuously Monitors 50 Million Global Suppliers Across 85,000 Data Sources and 250 Million Risk Events Per Month

ARLINGTON, Va., May 03, 2021 (GLOBE NEWSWIRE) — Interos, the operational resilience company, today launched a global call to arms for operational resilience in response to worldwide demand for immediate, end-to-end, and continuous supply-chain risk monitoring. The company will launch a multimedia campaign in partnership with strategic and creative agency, Amsterdam Berlin.

The pandemic has crystallized the need for an immediate focus on supply chain risk management. Unprecedented events — from massive cyberattacks to physical blockages at the Suez Canal — have put additional pressure on government entities and companies of all sizes to gain full visibility of their global supply chains, and to identify and eliminate potential risk factors across their supplier networks.

Interos has been tapped by government agencies and Fortune 500 companies to continuously monitor their global suppliers and business partners for risk across a wide range of factors. In February 2021, the company reported continued unprecedented demand since 2019 as platform bookings grew by 354%, recurring revenues grew by 133%, and their workforce grew by 132%.

“Supply chains have reached a critical inflection point, and blind spots can have massive implications,” said Jennifer Bisceglie, CEO, Interos. “End-to-end supply chain risk visibility is a critical component of operational resilience. Our customers across sectors have made it their top priority — from U.S. federal agencies, to aerospace and defense, airlines, banking, and insurance companies. This is a Big Data problem that can only be solved through the application of AI and machine learning.”

Interos enables customers across the financial services, aerospace & defense, technology, healthcare, and CPG industries to identify and avoid dangerous hidden risks and disruptions in their supplier networks. The platform monitors suppliers across key risk factors – financial, operational, environmental, social, governance, geographic, and cybersecurity. The Interos ad campaign for operational resilience, launching this week, will appear across major outlets such as The Wall Street Journal, The New York Times, and Washington Post. Outdoor advertising in New York City and Washington DC is also part of the multimedia mix.

“Interos is a very special company doing something essential to a better future,” said Brian Elliott, Chairman, Amsterdam Berlin. “Based on many years of experience working with global brands and with emerging challenger brands, we went first on a strategic process of discovery, interviewing business and government leaders and stakeholders, to arrive at the truth of the Interos brand, and the truth of this moment. And this, in turn, inspired our creativity.”

To learn more about Interos, visit www.interos.ai.

About Interos
Interos is the operational resilience company — reinventing how companies manage their supply chains and business relationships — through our breakthrough SaaS platform that uses artificial intelligence to model and transform the ecosystems of complex businesses into a living global map, down to any single supplier, anywhere. Reducing months of backward-looking manual spreadsheet inputs to instant visualizations and continuous monitoring, the Interos Operational Resilience Cloud helps the world’s companies reduce risk, avoid disruptions, and achieve superior enterprise adaptability. Businesses can also uncover game-changing opportunities to radically change the way they see, learn and profit from their relationships.

Based in Washington, DC, Interos serves global clients with business-critical, independent relationships across their primary operational areas: supply chain, financial, cybersecurity, regulatory and ESG compliance, and geographical. The fast-growing private company is led by CEO Jennifer Bisceglie and supported by investors Venrock and Kleiner Perkins. For more information, visit www.interos.ai.

Contact
[email protected]

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

Interos Sees Surge in Demand for its Operational Resilience Platform as Bookings Grow 354% Over the Past Two Years

Supply Chain Shocks – the pandemic, SolarWinds, and U.S. trade war with China – are spurring multinationals to turn to fast, scalable technology to avoid future disruption

Company well-positioned to address Biden administration call for heightened supply chain resilience

 

 

 

ARLINGTON, Va., Feb. 26, 2021 (GLOBE NEWSWIRE) — Interos, the operational resilience company, is powering into 2021 with a surge in demand for its AI-propelled platform that maps, monitors and models risk in the extended supply chain for Fortune 500 companies and government agencies worldwide.

Interos – whose clients include US federal agencies as well as industry leaders from aerospace and defense, airlines, banking and insurance – has been taking on a host of new customers from the automotive, tech, and manufacturing sectors. The company, based in Arlington, VA., with offices in California, recently expanded its worldwide presence to include operations in Germany, France, the UK and Nordic countries.

The privately held tech solution-provider logged a bookings growth rate of 354% in the last two years. It notched a 133% increase in its annual recurring revenue in 2020 over the previous year and recorded 132% growth in the number of employees over the same period.

Company executives expect even stronger expansion of Interos’ top-line and its worldwide headcount this year. The new focus on shoring up supply chain operational resilience, whether among companies based in the United States or abroad, is not expected to abate anytime soon.

Major areas of concern focus on supplier concentration risk within certain markets and locations, supplier financial risk, and compliance risks around restricted country or company involvement. The recent SolarWinds attack showed the impact of growing global digital interconnectivity and resulted in the event being called ‘an attack of the American supply chain’.

In response to these and other concerns, President Joe Biden signed an executive order this week launching a 100-day review of supply chains critical to national security, public health, and public safety. The review will target four key industries: semiconductors, critical minerals, pharmaceuticals, and electric vehicle batteries, and will seek to discover opportunities to bring overseas jobs back to the country.

“We’re seeing the collective C-suite and the board of directors at companies around the world make supply-chain resilience a top priority across the enterprise,” said Jennifer Bisceglie, CEO of Interos. “Companies, now more than ever, want visibility into their extended supply chain, down to the Nth tier, and they want to know in real time what risks are impacting those nodes at any given time. This all comes in the wake of the Black Swan events of 2020: the COVID-19 outbreak that rattled supply chains to the core, followed by the Solar Winds cyber hack that eroded trust in software integrity. President Biden now has taken a very welcome and necessary step in the right direction.”

The Interos founder noted that prior to Biden’s executive order, the U.S. government had taken several initiatives to shore up supply chain integrity and resilience in the federal space, where the company currently supports the U.S. Department of Defense among its public-sector clients.

“The new Biden administration must continue this emphasis on securing supply chains while crafting a modernized and comprehensive supply chain strategy,” she said. “The COVID response is clearly the administration’s top priority, including securing supply chains to expedite vaccine distribution.”

Interos recently added the following distinguished members to its Board of Advisors:

  • Dr. Richard Haass: President of the Council on Foreign Relations and former Director of Policy Planning for the US State Department, Haass is one of the country’s leading experts on foreign policy.
  • Mary Cheney: Cheney is a managing partner at communications firm New Troy Strategies. A veteran corporate and political advisor, Cheney is a highly sought-after marketing and PR expert who’s managed innovative campaigns across a range of industries including energy, telecommunications and agriculture.
  • Renee Wynn: Formerly the CIO of NASA and Acting Assistant Administrator for the EPA’s Office of Environmental Information, Wynn is widely recognized for her success at modernizing NASA’s IT acquisitions process and dramatically improving the agency’s security compliance.
  • Tom Foody: Foody serves as the CEO of Menlo Business Advisors and is a widely regarded operations and growth strategy consultant to venture firms and their portfolio companies.

Watch this video to learn more about Interos and the problem of supply chain risk.

About Interos

Interos is changing the way the world does business by mapping, monitoring, and modeling global supply chains. The company’s advanced AI-powered platform for eliminating multi-party, multi-factor risk from 3rd, 4th to nth tier parties provides continuous monitoring – across a host of risk factors – for the largest commercial brands in manufacturing, financial services, and aerospace and defense.

The Interos Knowledge Graph is the world’s largest business-relationship database containing millions of businesses and relationships, along with countless attributes and inputs. For more information, visit interosai.kinsta.cloud.

Contact info:
Rachel Forsyth
Finn Partners
[email protected]