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Category: Perspective

Why AI Risk Intelligence Is Key to Strengthening Digital Supply Chain Cybersecurity

Posted on by Interos

Image: NOIRLab/NSF/AURA/T. Slovinský

Story by Alea Marks & Dianna ONeill

The second episode of Interos’s executive insights series, “Voices of Innovation,” explored how AI is enhancing digital supply chain cybersecurity – with former CISA Chief of Staff Kiersten E. Todt calling the issue an “urgent challenge.”

“The AI Revolution in Supply Chain Cyber Defense” discussion between Todt and Dave DeWalt, founder and CEO, NightDragon, comes against a backdrop of soaring software supply chain attacks that make today’s complex digital ecosystems acutely vulnerable to breaches, attacks, failures and other cascading disruptions.

Here are five key takeaways from their conversation:

1-Understanding and Managing Supply Chain Risk
The rise in software supply chain attacks has highlighted persistent and costly risks in interconnected digital supply chains, particularly as cybercriminals exploit vulnerabilities in third-party software components. Gartner projects that by 2025, 45% of global organizations will have experienced a supply chain attack, which is three times higher than in 2021

Todt stressed the need for visibility and transparency in managing latent third-party vulnerabilities:

“I do think it’s one of the most urgent challenges to be addressed because we don’t know all the interdependencies [that exist] and we have to have greater visibility into all of the touchpoints that we have. Understanding our third-party risk, understanding where third-party supplier vendors are not as strong or resilient as we need them to be, is critical.”

Recent data shows that 61% of businesses have been impacted by supply chain attacks in the past year, highlighting the extensive attack surface and the urgent need for proactive measures. AI-driven  intelligence – which has the power to continuously monitor supply chain lifecycle risk at scale – is vital amid these realities.

2- Government and Industry Partnership

The collaboration between government and industry has led to approaches like Secure by Design, which emphasizes integrating security measures into the development process from the beginning, rather than adding them later, and ensuring a careful balance between security and innovation:

“The prioritization of security over getting something out there is what needs to happen. Secure innovation doesn’t have to be an oxymoron,” Todt said.  “If we think about cybersecurity, progress is security, it is safety. That is the principle […] that we’ve seen from the government leaders, but importantly as partners with industry, that we’ve seen prioritized.”

3- Opportunity Over Sophistication

DeWalt noted the importance of identifying “choke points” in the supply chain, as demonstrated by third party cyber vendor incidents in companies like Change Healthcare and auto dealership software company CDK. Todt emphasized that risk is often about opportunity rather than sophistication:

“When you look at Colonial Pipeline, that company for all we know was not targeted because it was transferring 45 percent of fuel along the East coast, it was targeted because it didn’t use multifactor authentication and in a broad sweep its vulnerabilities percolated to the top. A lot of this activity is just looking for where the vulnerabilities are. It’s so important to appreciate not just where they are, but what do you need to function? What do you need to be efficient? What does your supply chain and your manufacturing process need to actually operate?”

Interos Watchtower™: The Necessary Visibility

DeWalt emphasized the complexity of global supply chains, where today’s large enterprises can easily maintain tens of thousands of suppliers across their extended global networks. Identifying and understanding supplier risk across these interdependent ecosystems is crucial, and new technology such as Interos Watchtower™ utilizes AI to continuously map and monitor relationships across the risk lifecycle to help enterprises mitigate supplier failures before they escalate to crisis.

By leveraging AI and real-time critical risk intelligence, companies can enhance their resilience against cyber, regulatory, ESG, and other threats, ensuring that their digital supply chains remain secure and efficient.

Enabling the Future with AI Supply Chain Intelligence

AI technologies are revolutionizing supply chain security by enabling advanced analytics and real-time risk detection, monitoring, and other advantages. These capabilities allow organizations to anticipate potential supply chain disruptions in advance to rapidly mitigate threats and optimize resource allocation.

To watch the replay of Todt and DeWalt’s conversation click HERE.

To learn more about how Interos can fortify your supply chain contact us HERE.

 

 

 

“It’s Going to Get Worse Before It Gets Better” Navigating Supply Chain Geopolitical Risks: Insights from National Security Experts

Posted on by Interos

by Alea Marks & Dianna ONeill

Interos’s new executive insights series, “Voices of Innovation,” hosted a critical conversation on escalating geopolitical threats to supply chain security.

The inaugural session brought together former NSA Director and US Cyber Command head, Admiral Mike Rogers (Ret.)  and Andrea Little Limbago, Ph.D., Head of Applied AI, Interos, and a frequent speaker on geopolitical risk and cybersecurity.

Five Key Quotes

1-Supply Chain Vulnerabilities

In an era of global interconnectedness, supply chains have become increasingly complex and efficient. However, this integration introduces acute new vulnerabilities. Today’s multinational ecosystems can easily encompass thousands of sub-tier suppliers, fueling continued supply chain disruptions that cost the global economy $3 trillion in annual losses.

Admiral Rogers highlighted this double-edge sword, noting the ripple effect across interconnected systems:

“There’s definitely been a tradeoff,” Rogers observed. “The downside is we have to acknowledge, as we can see with CrowdStrike being the latest issue, that we’ve got fundamental vulnerability inherent in the system.”

2-Geopolitics and Corporate Boards

Given the global footprint of many large enterprises, Admiral Rogers highlighted the growing concern among corporate boards regarding geopolitical risk:

“I spend a lot of time talking to corporate boards on geopolitics. They are trying to understand, the world around me seems to be changing. That has implications for my business model, and it has implications for my liability and responsibility.”

Rogers emphasized that companies are increasingly recognizing the need to better understand the global context and for their supply chain operations, identify risks, and develop strategies for risk mitigation and prioritization.

3-Criminals Targeting Supply Chains

In discussing evolving digital cyber threats, Admiral Rogers expressed surprise at the recent trend of criminals targeting digital supply chains:

“I never thought I would see criminals go into supply chain, supply chain route in terms of an attack vector. That was true until about 15 months ago, but we’re now seeing criminals going down this route. So, organizations now are routinely asking themselves, do I understand the dimensions of my supply chain? And what steps am I taking to try to mitigate that risk?”

4-Proactive Risk Mitigation

Anticipating and preparing for potential disruptions emerged as a critical theme. Rogers emphasized the value of proactive planning and regular practice in enhancing an organization’s resilience:

“The more time you put up front in thinking through and anticipating, the better your performance in crisis,” he advised. “I can’t anticipate every scenario, but the more I train, the more I simulate, the more I practice, the more efficient and effective I’ll be in responding to disruption and generating resilience.”

5-Evolving National Security Landscape

The conversation addressed the changing nature of national security, which now encompasses economic security and digital advantage. Rogers highlighted how this shift is leading to increased government involvement in previously private sector domains.

“Governments are getting much more directive and much more broadly involved,” Rogers observed. He noted a significant shift in cybersecurity strategy: “The biggest shifts in [cybersecurity] strategy were, number one, it’s no longer the individual user to hold accountable – it’s the entities that are in the best position to achieve a broad impact.”

Interos Watchtower™: A Strategic Solution

Rogers and Little Limbago also discussed Interos Watchtower™, AI-driven technology that provides personalized risk models to defend against geopolitical threats. Rogers noted the criticality of mapping and prioritizing threats, emphasizing:

“We have got to get to prioritization. Because if we can’t prioritize, if we can’t figure out the best use of limited resources, we got real problems.”

Watchtower highlights vulnerable suppliers based on potential business impact, allowing organizations to prioritize and remediate regulatory, cyber, government intervention, and foreign ownership risks, among others.

Looking Ahead

Admiral Rogers concluded with a sobering yet hopeful outlook:

“It’s going to get worse before it gets better.” However, he noted that more businesses and senior leaders are acknowledging the challenge, stating, “You can’t solve a problem if you don’t acknowledge it.”

The conversation made clear the pervasive nature of geopolitical supply chains impacts. From trade tensions to shifting nation-state alliances, a host of changing global dynamics present new opportunities for disruption. Organizations that fail to  adopt a proactive, technology-driven approach to these realities risk falling behind.

Technologies like Interos Watchtower™ are a significant advancement, offering the personalized, actionable intelligence necessary to enhance supply chain strength and security in a volatile  landscape.

Learn more HERE.

 

 

From Tesla’s Troubles to Industry Solutions: Addressing Child Labor in Global Supply Chains

Posted on by Dianna ONeill

Concerns about the potential for child labor in Tesla’s supply chain highlight a critical issue facing multinationals today: the challenge of ensuring ethical labor practices throughout complex global supply chains.

Despite CEO Elon Musk’s promises of third-party audits and webcams to monitor cobalt mines in the Democratic Republic of Congo, critics charge implementation is falling short.

The Ripple Effect: Industry-Wide Implications

This situation exemplifies the broader challenges companies face in addressing labor issues across their multi-tier supply chains. As governments worldwide implement stricter regulations, companies must act swiftly to protect their reputations and comply with evolving standards.

Interos data shows executives estimate that ESG-related cost increases or revenue losses impact companies at $44M annually.

At Interos, we’ve identified five key strategies to help organizations eliminate unethical supply chain labor practices:

  • Conduct Comprehensive Supply Chain Mapping: Gain visibility into the extended supply chain, from direct suppliers to nth-tier sub-suppliers, to identify vulnerabilities. Continuous supply chain lifecycle risk intelligence from Interos enables advanced analytics and real-time monitoring to scrutinize supply chains for regulatory violations and other ESG concerns.
  • Implement Robust Due Diligence Processes: Develop and enforce rigorous due diligence procedures to complement technology-based assessments. This means going beyond assessing suppliers’ labor practices through audits carried out by accredited third-party agency, to embracing deep supplier visibility and real-time risk assessments..
  • Leverage AI Predictive Analytics: Utilize cutting-edge technologies like Interos’ AI-powered platform, which evolve enterprises from lagging to leading indicators to drive proactive mitigation. Interos’ next generation ESG risk model monitors multiple critical attributes reflecting the multi-faceted nature of ESG threats, including forced labor, emissions, diversity, foreign ownership, and other critical attributes.
  • 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.
  • 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’ supply chain lifecycle risk intelligence 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 supply chain forced labor risk to foster ethical, responsible, and adaptable supply chains that meet, and surpass, the demands of today’s interconnected economy.

What Satellites Reveal About Concentration Risk in Multi-Tier Supply Chains

Posted on by Dianna ONeill

The Space Development Agency (SDA), a U.S. Space Force agency, is sounding the alarm on concentration risk in the satellite supply chain.

The SDA has ambitious plans to deploy hundreds of small satellites in low-Earth orbit, but risks have emerged with contractors relying on single sources for critical subsystems, threatening to delay the project. Col. Alexander Rasmussen, chief of SDA’s Tracking Layer program, emphasized the need for government contractors to diversify the supplier base for mission-critical components and to get supply chains “energized” early.

Concentration risk is endemic across multiple public and private sector organizations, fueled by interdependent supply chains with tens of thousands of potential failure points.

A single incident can trigger catastrophic ripple effects, paralyzing operations and inflicting severe financial damage. Interos data shows that large enterprises lose $34 million annually due to disruptions triggered by concentration risks.

Examples of at-risk goods and services include:

Semiconductors

The world’s semiconductor manufacturing is concentrated in Taiwan, specifically at the Taiwan Semiconductor Manufacturing Company (TSMC) and United Microelectronics Corp (UMC). Any disruption to their operations, whether due to earthquakes and other natural disasters, geopolitical tensions, or other factors, could have severe ripple effects across global supply chains for electronics, automobiles, and other vital industries reliant on semiconductors.

Rare Earth Metals

China dominates the global supply of rare earth metals, which are critical components in many high-tech products, including smartphones, electric vehicles, and military equipment. Any disruption to China’s rare earth production or export policies could significantly impact global manufacturing and technology industries.

Global Shipping Chokepoints

A significant portion of global maritime trade passes through a handful of critical chokepoints, such as the Strait of Hormuz, the Strait of Malacca, and the Panama Canal – all of which have continue to grapple with disruptions triggered by geopolitical tensions, accidents, or natural disasters, could severely impact global supply chains and trade flows.

Strategies to Mitigate Concentration Risk

Addressing concentration risk requires a multi-faceted approach anchored in real-time supply chain lifecycle risk intelligence. Here are some practical strategies identify and mitigate concentration threats:

  • Comprehensive Supply Chain Mapping: Companies must gain multi-tier visibility into their supply chains to identify potential concentration risks and other threats. This involves mapping all suppliers and their interdependencies.
  • Predictive Risk Intelligence and Monitoring: Leveraging advanced risk analytics platforms like Interos, businesses can continuously monitor physical and digital supply chains for geopolitical, financial, cyber, regulatory, ESG, catastrophic, and other risks. Real-time alerts and predictive analytics enable proactive mitigation strategies.
  • Supplier Diversification: Reducing reliance on a single supplier or region by diversifying the supply base can mitigate concentration risk. However, this must be balanced against the potential increase in complexity and costs.
  • Nearshoring and Reshoring: Bringing production closer to end markets or back to domestic facilities can reduce exposure to geopolitical risks, trade tensions, and transportation disruptions.
  • Collaboration and Transparency: Fostering collaboration and transparency across the supply chain ecosystem can enhance risk visibility and enable coordinated risk mitigation efforts.

Addressing concentration risk and other supply chain vulnerabilities is not a one-time exercise but a strategic process that requires continuous monitoring, adaptation, and investment.

By prioritizing proactive and predictive supply chain technology like Interos, companies can fortify their operations against potential disruptions, safeguard their bottom line, and maintain a competitive edge.

Click here to learn how Interos can secure your supply chain against concentration risk and other threats.

Posted on by Interos

by Julia Hazel and Dianna ONeill

While the dire outlook for the 2024 Atlantic hurricane season has raised alarms across the U.S., supply chain risk leaders focusing solely on this region are dealing with incomplete information.

Unlike 2023, the Pacific is expected to experience a relative reprieve from tropical cyclones this season. The complex climate dynamics impacting typhoons and hurricanes across the two oceans underscores the need for a global, seasonally-dependent assessment of catastrophic risks to supply chains.

The Looming Threat in the Atlantic

The National Hurricane Center’s unprecedented forecast is fueled by climatic conditions creating a perfect storm for intense hurricane development. However, an exclusive focus on this region alone risks overlooking critical threats to global supply chains posed by tropical cyclone activity elsewhere.

According to data from the World Bank, natural disasters in the East Asia and Pacific region caused over $60 billion in economic damages in 2021 alone, with a significant portion attributed to tropical cyclones disrupting supply chains.

Pacific Cyclones: An Underestimated Peril

In 2023, while the Atlantic saw 20 named storms, the remaining 58 tropical cyclones wreaked havoc across the Pacific and Indian Oceans, inflicting damage from China to Australia and Africa. The impacts of a single, powerful storm system can be immense:

  • Typhoon Doksuri, which ravaged Beijing and coastal China in July 2023, closed major ports and destroyed critical infrastructure, triggering $25 billion in U.S. economic losses according to Munich Re.
  • The technology sector has been heavily impacted by Pacific storms, with companies like Apple, Samsung, and Intel facing disruptions to their supply chains in recent years. In 2022, Super Typhoon Noru forced several semiconductor factories in Taiwan to temporarily halt operations, exacerbating the global chip shortage.
  • The automotive industry has also been battered by Pacific cyclones. In 2021, Typhoon Chanthu caused production stoppages at Toyota’s plants in Thailand, resulting in estimated losses of $98 million.

Regionally Tailored Forecasts

Interestingly, while the Atlantic is bracing for a historically active hurricane season, the forecasts for other regions paint a different picture. The outlooks for the Central and Eastern Pacific call for below-normal tropical cyclone activity, with NOAA anticipating a 50% chance of below-normal activity in the Central Pacific and 60% in the Eastern.

This divergence can be attributed to the effects of La Nina, which augments hurricane development in the Atlantic but has the opposing effect in the Pacific by increasing both vertical wind shear and atmospheric stability – conditions that suppress cyclone formation and intensification.

Comprehensive Catastrophic Risk Assessment

The stark disparity in this year’s forecasts across different regions of the world underscores the importance of businesses adopting a truly global, seasonally-dependent assessment of catastrophic risks to their supply chains. The threats posed by tropical cyclones are dynamic, shifting in both space and time depending on the season, the inherent risk profile of a given location, and continuously evolving climatic patterns.

To protect against these dynamic threats, organizations must gain greater visibility into their extended supply networks, identifying key suppliers situated in areas historically prone to natural hazards like hurricanes and tropical cyclones.

Moreover, they must continuously monitor how risk patterns shift across seasons and regions in real-time, using comprehensive supply chain lifecycle risk intelligence to proactively adjust mitigation strategies:

  • Interos’ catastrophic risk model provides a powerful solution to this complex challenge, offering a high geospatial resolution. This delivers more precise in-country and in-state risk indicators for faster and more focused hazard mitigation.
  • The technology enables businesses to proactively assess which suppliers are in areas susceptible to different natural hazards, as well as which specific hazard risks are likely to emerge during particular seasons.
  • The model’s continuous monitoring enables real-time tracking of supply chain impacts from unfolding natural events, empowering organizations to respond swiftly.

Consider the example of Cooper University Health Care. It used catastrophic risk intelligence from Interos to identify suppliers located in the path of Hurricane Idalia in 2023. By leveraging real-time catastrophic intelligence, managers were able to pre-position critical materials to ensure uninterrupted patient care.

As climate volatility and extreme weather become increasingly commonplace, embracing global, real-time hazard monitoring solutions like Interos’ catastrophic risk technology are crucial for proactively deterring and mitigating supply chain disruptions.

Click here to learn how Interos can secure your supply chain against extreme weather and other risks.

 

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.”