A recent report by PricewaterhouseCoopers (PwC) outlines a growing threat to supply chains from cyber, hacker, pirate and terrorist attacks.
The report, “Transportation & Logistics 2030, Vol. 4 – Securing the supply chain,” outlines the responses of 80 global executives to an extensive survey on what elements of supply chain security they believe will be most critical in the future.
- Total direct costs of piracy in 2010 are estimated to be between US$7 and $12 billion; indirect costs drive this figure higher
- Terrorist attacks on key locations in the global supply chain — such as in Hong Kong, or chokepoints like the Panama and Suez Canals — can disable the immediate hub but can cause more widespread damage throughout the global supply chain (as recently seen with Japan post-earthquake and tsunami)
- Cyber attacks designed to induce physical damage will be an increasing threat for the transportation and logistics industry
So what can the trade do? According to PwC:
Companies have to find the right combination of preventive and reactive measures to achieve the optimal level of supply chain security…. [c]ompanies need to consider the possible, not just the probable. Executive should keep an eye on so-called wild-card events too. That means looking at the possible financial impact, the relative vulnerability of their business model and their company’s ability to react to low-probability, high-impact events…. Security audits along the entire supply chain will become a requirement to maintain effective levels of security.
The complete report is available here.