Is shipping & the supply chain the ‘next playground for hackers’?

The International Maritime Bureau (IMB) is warning the maritime sector to be extra vigilant in light of increasing attacks from cyber criminals.

Do hackers pose a risk to the maritime industry?

For a bureau that has traditionally focussed its efforts on fighting piracy and armed robbery at sea, this new digital threat puts an entirely different menace in its crosshairs.

The IMB has been quoted as saying, “Recent events have shown that systems managing the movement of goods need to be strengthened against the threat of cyber-attacks.

“It is vital that lessons learnt from other industrial sectors are applied quickly to close down cyber vulnerabilities in shipping and the supply chain.”

This is cause for concern for the maritime industry especially as ships, containers and rigs are all connected to computer networks. If hackers find but one weakness, it can expose the entire network and make it open to exploitation on a grand scale.

Various cyber security experts have sounded off on this very subject during the past few months, and the media has been quick to pick up on it.  Reuters reported that a floating oil rig was compromised by hackers who tilted it onto its side.  The rig was out of action for an entire 19 days while harmful malware was removed from computer systems.

In Antwerp hackers gained access to port-side computers that enabled them to target specific containers, before making off with the booty and wiping away any telltale digital fingerprints.

The latest warning from the IMB quotes Mike Yarwood – TT Club’s insurance claims expert, speaking at the TOC Container Supply Chain Europe Conference in London. “We see incidents which at first appear to be a petty break-in at office facilities. The damage appears minimal – nothing is physically removed.”

Mike continues: “More thorough post incident investigations however reveal that the ‘thieves’ were actually installing spyware within the operator’s IT network.”

In scenarios similar to the incident in Antwerp, hackers tend to track individual containers through the supply chain to its destination port. Along the way the IT systems related to the cargo are infiltrated, resulting in the hackers either gaining entry to (or generating release codes for) specific containers.

The International Maritime Bureau is a specialized department of the International Chamber of Commerce.

Can you be a creative and still excel in procurement?

“Beware the team building exercise” 

At first, Karen Carmichael wasn’t sure that her creative streak would fit with the serious business of procurement. She loves to sing and dance in amateur theatre, which means dressing up.

Karen Carmichael

“So, beware the team building exercise, as you will need to dress up in some way. During my career I’ve dressed up as a leopard on stage for a divisional conference, I have been a penguin, the Mad Hatter, the Wicked Witch of the West, Santa’s Elf, the Starlight Star and more. My team and I have walked through Sydney dressed as princesses and Mexicans.

“How has this shaped my professional journey? Not really sure, but I truly believe that we work with people, and people need to have fun where they work, or why get out of bed?”

Karen was most recently the Head of the Procurement Team for Singtel Optus and specialises in transformational and digital change. The experienced finance executive has a diverse career spanning retail, telco, manufacturing and engineering.

The qualified CPA was also awarded the Who’s Who Worldwide Financial Management Professional of the Year 2012 for her achievements.

She’s now moved into consulting to help other organisations achieve excellence in their procurement function.

Karen is a problem solver who loves a challenge and passionately believes there’s always room for improvement.

“I love diversity because I get bored easily. I love to inspire people and watch them reach their true potential. Never be afraid to do something difference, even if you’re not clear where it will lead you. Who knows, you may end up in procurement, like I did.”

She wishes she could change people’s perception of what she does for a living.

“The function of procurement is still largely seen as an administration task focused on cost-cutting. But used correctly, it’s a truly strategic competitive advantage that can help business achieve their goals and drive better value from their supplier base so that customers receive what they really need at the best possible value.”

Karen also likes to make a difference to the world. She was a corporate mentor for student refugees from war torn countries or whose families struggle with substance abuse or domestic violence in 2007-2009.

At the time, Karen was being treated for breast cancer. A number of the intellectually and physically handicapped students from the support unit of the school presented her with turbans to keep her then-bald head warm.

“It was the most humbling experience of my life and one I accredit for my speedy recovery.”

Would you trust your deliveries to a drone?

Google has just shown its secret ‘Project Wing’ drone-based delivery system to the world.

The fruits of the work  Google’s shadowy X research arm has achieved so far can be seen in the video below:

During a test-run Project Wing flew through the Queensland skies to successfully deliver supplies to Australian farmers.

To accompany the video Google provided the following:

“Throughout history, major shifts in how we move goods from place to place have led to new opportunities for economic growth and generally made consumers’ lives easier. From steam ships to the railroads, from the postal service to delivery services like FedEx and DHL, speed has reshaped society not only with greater convenience but also by making more goods accessible to more people.”

It continued: “Self-flying vehicles could open up entirely new approaches to moving goods – including options that are cheaper, faster, less wasteful and more environmentally sensitive than what’s possible today.”

The prototype is based on a single-wing drone design, and measures just 1.5m-wide (5ft). Four adjustable propellers control the drone through the flight, moving accordingly throughout its journey. In this example the goods to be delivered fit snugly in gap located in the middle of the wing.

Drone wars

For once Google isn’t first to the punch… Internet retailer Amazon has been toying with a drone delivery programme since it announced the ‘Prime Air’ service towards the latter end of 2013.

Of course, the fight for air supremacy doesn’t end with Amazon vs. Google… Aviation rules would need to be changed to allow use of unmanned civilian aircraft systems. What’s more, drones also fly in the face of dyed-in-the-wool privacy regulations, as many believe that drones have the potential to infringe on our base privacy rights.

And finally: Disney wants to use floating drones to power floating puppets… further proof (if it were needed) that the future is shaping-up to be pretty weird.

Google’s asking for interested parties to express their interest using this online form. Want to read more? The Atlantic has a comprehensive write-up about Project Wing on its website.

Procurious is mobile – are you?

If you’re just visiting Procurious via your PC, laptop, or Mac, you’re missing out… Sorry about that.

Procurious.com on mobile

Did you know that you can also find us on your tablet devices (including iPad), as well as your iPhone and smartphone? No? Well consider yourselves informed. Let us take you through the Procurious mobile experience – soon you’ll be networking on the go, and shackled no more!

Sometimes when you think of mobile, you immediately jump to conclusions: be it a lesser design, or the watered-down functionality – it’s OK, we think the same. That’s why Procurious on mobile is the same smooth experience as the ‘full-fat’ desktop version.

Procurious is perfectly suited for mobile viewing – this is achieved in-part to its responsive design. Fire-up Procurious.com on your smartphone and you’ll see that it’s scalable so it will render on your device perfectly (no matter what the screen-size).

Enjoy all of your favourite features: leave posts for the community, watch learning videos, view and RSVP to events listings, participate in discussions, catch-up on the latest articles in the blog, and take a look at the latest news headlines.

We want to be front of mind and to do that Procurious must be easily accessible to the user wherever they may be. Whether that’s killing time on the commute to and from the office, waiting bleary-eyed in the queue for the morning coffee, or safe in the comfort of your couch…

Let us know about your experience of Procurious on mobile in the comments below.

High risks and high rewards: dangers of low-cost sourcing

This is the second article in a fortnightly series from Gordon Donovan.

This blog concentrates on international sourcing activities and the trends and pitfalls of this high risk and high reward strategy.

Apple and Nissan

You may have heard lots of talk over the last couple of years about reshoring or nearshoring. Basically this means goods and services that were previously bought from international environs are now being purchased more locally. Several reasons for this, one you can only have a supply chain as long as your forecast is accurate (i.e. if you can forecast your requirements a week in advance, your supply chain must be about one week – otherwise we are into the world of safety stocks- amongst other things)

Several notable organisations have decided on this strategy for a number of reasons:

  • Politics, energy costs, supply chain inefficiency (GE & Apple)
  • Risk Reduction (Nissan)

All in all what this means is that CPOs are looking at all the elements of cost – the total cost of ownership (TCO) -rather than just a few costs in the quest to achieve corporate objectives. Some US States are hosting reshoring workshops in an effort to drive more of these initiatives. I’m not sure if it’s a trend as yet but it could be.

Of course sometimes these strategies go badly, badly wrong.

On the subject of low cost sourcing I read an interesting article from Jim Kiser about a client he had advised about a low cost sourcing initiative for resins. Essentially he states that the lack of work done upfront meant that the initiative created a blind spot for procurement. Namely:

  • No planning discussions around contract areas needed, payment terms, exchange rates, shipping, capacity of product, quality assurance, and so forth.
  • Not understanding the supplier’s financials, this was an Asian supplier and no records were accessible, it was a privately held supplier and only there was only one location from where the product was derived.
  • Analysing other countries for suppliers that could provide this material and a good landed cost.
  • No planning on a bonded warehouse arrangement overseas or at home for forward inventory control or capacity needs.

I think that these (amongst others) are good thoughts for any sourcing plan.

I was recently asked to give a presentation to a group of CPOs recently about culture within organisations and how does procurement influence and be influenced by it.

In preparing for this presentation I remembered a great quote from Peter Drucker, in that “culture eats strategy for breakfast” and therefore the need to ensure cultural alignment with suppliers is highly important (read my previous article on supplier selection). It’s a topic of huge interest to me. We live in a multicultural society and understanding cultural impacts in decision making is imperative.

Recently Harvard business review published a link to a simple cultural tool, it’s easy to take and makes for interesting reading when you analyse the results.

The profile test suggests that to get an accurate picture, you need to gauge cognitive, relational, and behavioural differences where cultural gaps are most common—and to assess yourself in those areas.

There are two other notable researches on country culture that are worth understanding if you are sourcing internationally as part of understanding risks.  See The Hofstede Centre and Journal of Cross-Cultural Psychology

You may also consider that as organisations are now more international, the heritage of the company may be as important as the country in which they are operating in.

You can subscribe directly to the sources I have identified here (nothing is my copyright), and if you wanted to discuss please feel free to contact me via Procurious, or follow me on Twitter.

Supply chains all mapped out

Thanks to the likes of Google Maps – you’ll find that source maps are becoming more and more commonplace on manufacturer’s websites.

Added to that, consumers are increasingly more savvy and want to be able to trace a product’s complete  journey – from humble beginnings to the very end of the supply chain.

Les 2 Vaches source map - supply chain
Les 2 Vaches maps out the supply chain for its organic yogurts

Ever wondered how yogurt gets to your door?

Head on over to the website of the French yogurt producer Les 2 Vaches and you’ll be able to see  where all the ingredients that go into the yogurt are produced or grown. Not only that, but the map also marks out the locations where ingredients are stored and prepared.

Clicking on one of the maps’ markers will reveal more details; for instance you can glean more about what happens at each site,  the routes between sites are also marked for extra visibility.

If you want more of a steer, look to the right-hand side of the map and deep-dive down down into an ingredient of your choosing.

(Oh, it’s all in French – but your modern browser should be able to translate it for you).

Loomstate t-shirt supply chain
Be sure to check out Loomstate’s interactive map

Shirty business

What about that shirt off your back? Loomstate has  created what it calls the ‘Loomstate Difference’ – an interactive map that follows the journey of the company’s newest tee, all 100 per cent grown and sewn in America.

It is Loomstate’s ambition to create the most traceable tee in the world – and by supplying the public with full transparency of its supply chain, along with creating sustainable business relationships, it looks set to achieve just that.

Where things really come from

Of course SourceMap has slowly been gathering info on product supply chains for years. The beauty of SourceMap lies in its use of crowd-sourcing, meaning smaller (sometimes perhaps less-known) producers are represented too.

Procurious’ eye on the news

Brazil nuts

Nestle looks to improve animal welfare

Nestle have pledged to improve animal welfare in their supply chain. The organisation has teamed up with World Animal Protection, the first major food organisation to do so, to improve standards and hold suppliers to account for practices such as battery farming, force growing, etc. and force them to improve welfare standards.

Nut prices go nuts

Nut prices in the supply chain for hazelnuts (52 per cent year on year increase) and coconut (74 per cent year on year increase) have shot up due to adverse weather conditions in Turkey and East Asia respectively. However, prices for both almonds and Brazil nuts have dropped from highs earlier in the year as production issues have been eased. (Just as an FYI – the largest producer of Brazil Nuts…Bolivia!)

Glasgow seeks next procurement superstars

City of Glasgow college has launched procurement and supply chain apprenticeships to encourage young people into a career in the industry. The apprenticeships will aim to replicate experiences in a real working environment and the curriculum has been developed, and is updated regularly, with help from procurement professionals.

Read more on all these stories over at Supply Management

Australia and Indonesia agree on cattle and beef sales

Australia and Indonesia have signed an agreement on cattle and beef sales to increase Indonesian food security. Australia are expecting a 77 per cent increase on levels of shipped live heads of cattle (currently 395,000 p/a) this year and will commit to providing proven breeds of cows, improvement in Indonesian abattoirs and redesigning of cattle transport ships.

Read more at Global News

And finally: let’s talk about online shopping…

Here’s a really interesting blog on why online retail isn’t the goldmine people think it is.

Read more on HBR

Procurement at 160bpm: fast cars and high-stakes deals

From car marque to bank brand…

A decision to lunch in one of Cincinnati’s most historic suburbs while on a buyer training mission could have cost Daniel Filipovic more than just the bill.

He and a couple of colleagues hadn’t realised that the restaurant they’d agreed upon was located in one of the most dangerous suburbs in the city.

“No sooner had we parked the car and got out, I was being complimented about how great my jacket looked by a couple of the locals – and not in the friendly sense. Needless to say we make a brisk walk back to the car and hastily made our way back to the hotel, thankfully still my jacket and myself intact,” Daniel says.

Daniel Filipovic
Daniel Filipovic pictured here with his jacket still intact.

“Really, we should have paid more attention to the abandoned buildings and bonfires prior to getting out of the car!”

It was quite an eye-opening experience for the Melburnian, who has a double degree in Commerce & Arts, with majors in Electronic Commerce and Public Relations from Deakin University.

“Although I’m not sure how much actual study I did during those degrees, those undergrad days were quite a blur, to say the least.”

After college, he started his career in engineering support roles, and eventually an account executive role, where he worked alongside procurement specialists.

An opportunity opened up to join the purchasing division at Toyota Australia as a buyer, and he grabbed it with both hands. He recalls flying out to Japan to present on Toyota’s transformation activity with colleagues as a major highlight for him. He’s been in the profession for seven years now.

“What I love about procurement is dealing with people first and foremost, being a direct link between the organisation and its key suppliers and building and maintaining long-lasting relationships.

“More specifically, I enjoy my role the most when procurement lead strategic sourcing activity that directly links and creates value to the organisation’s overall strategic plan.

“I believe we’re about creating value both internally and externally with our supply chain and getting the best return on investment. This may or may not be necessarily have to do with lowest cost, as some believe.

“As a profession, we have an active part to play in educating our suppliers through knowledge sharing, such as local and global benchmarking activity to ensure they’re aware what is best practice and why, to enable them to continually improve.”

The young father of two also runs an electronic music label with some friends and DJs live on radio, which he’s been doing since university and remains passionate about.

The great Cuban beer crisis of 2014

Oh where O my beero?

Cuba has run out of beer

If you’re popping open a can of ice-cold refreshment this weekend, spare a thought for the beer-deprived people of Cuba. The combination of a hotter-than-average summer and a shortage of malt barley has resulted in a perfect storm…

Cuba’s largest brewery – Bucanero, was said to have suffered from delayed imports of malted barley during the months of Jan-April. This shortage led to a sharp fall in production, and numbers haven’t been enough to sustain a healthy supply chain in what’s been Cuba’s third-hottest summer since 1951.

Bucanero produces four of the island’s main beer imprints, namely: Bucanero, Cristal, Cacique and Mayabe.

As a joint venture between the Cuban state and brewing giant Anheuser-Busch InBev – you could say Bucanero has something of a monopoly on beer in Cuba.

Cuban woman and dog
“Nope, no beer in here…”

Demand for beer has far outstripped supply, bringing vastly-inflated prices with it, as eager drinkers scour the island for the last remaining dregs. In-fact, figures revealed that Bucanero produced just 55 per cent of the expected output during the affected period. Other imported beers were said to be available to the thirsty hordes, but Cuba’s ‘paladares’ (private restaurants) have been quick to take advantage of the dry-spell.

Hip hops

Meanwhile in the United States: the hop industry is struggling to keep up with surging demand from the craft brewing community.

The average price for hops has grown from just $1.88 a pound back in 2004, to $3.59 in 2013. But craft brewers use more of the hoppy stuff than traditional breweries (1.25 vs 0.2 pounds), thereby putting a strain on hop supplies.

Walmart pimped-up its fleet – capable of massive loads

Now that’s what I call a truck…

The Walmart Advanced Vehicle Experience concept truck is the latest in the retailer’s fleet efficiency program.

The one-of-a-kind prototype offers a whole package of firsts. The tractor boasts advanced aerodynamics and is powered by a prototype advanced turbine-powered, range-extending series hybrid powertrain. It certainly sounds impressive, even if we’re not 100 per cent sure what it does…

The trailer is made almost exclusively with carbon fiber, saving around 4,000 pounds that can then be utilised to carry more freight.

Would this transform your transportation services?