Exposing the Supply Chain Security Nightmare

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A Discussion with Interos Solutions CEO Jennifer Bisceglie


When most people think of the words “supply chain” they harken back to the class room definition — the sequence of steps and processes involved in the production and distribution of a commodity or product in a factory. While that’s true, over the last several decades the move toward low cost outsourcing has dramatically changed where companies source their components and finished products as well as the multitude of players that supply them. Factor in the rise of software and networks, and the downside of this operational focus is it has kicked the door wide open for bad actors to exploit the supply chain in the form of cyber and other attacks.

In today’s podcast, Tematica’s Chris Versace discusses all of this with Interos Solutions CEO and President Jennifer Bisceglie, who recently testified before the U.S.-China Economic and Security Review Commission Hearing on “China, the United States, and Next Generation Connectivity.” As Chris and Tematica’s Chief Macro Strategist, Lenore Hawkins have shared before, the migration deeper into our Connected Society investing theme opens the door for pain points associated with our Safety & Security investing theme. Jennifer not only reaffirms that view, but reveals several aspects that few have likely considered despite how widespread cyberattacks on the supply chain have become.

As Jennifer points out, along with the growing incidents of attacks and notable high-profile ones at Merck & Co. (MRK), FedEx (FDX), Renault SA and others following the NotPetya destructive ransomware attack in 2017, supply chain security and vendor risk management is escalating across the corporate landscape, becoming a focal point in the Board room. Simply put, digital supply chain vulnerability is impacting the physical supply chain via a range of risks from intellectual property theft, to counterfeit components, and even human trafficking. Jennifer explains why with 5G and the Internet of Things soon to become reality, companies should brace themselves for another layer of concern when it comes to their supply chain security and vendors.

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The implications are simply staggering, ranging from companies losing their strategic advantages and having investments stolen, to the need to ramp up security spending and added aspects to M&A due diligence that could alter the terms of a deal if not scuttle it all together. Recall how last year Verizon (VZ) renegotiated its deal to acquire Yahoo by $350 million following the revelation of security breaches with the Verizon network.

Jennifer and Chris also talk about Facebook’s (FB) current challenges, which could be viewed as a breakdown in its supply, and why it’s a situation that Jennifer is “surprised at how surprised everyone is that it happened.” And lastly, because it wouldn’t be a podcast without some discussion on Bitcoin or the Blockchain, Chris asks Jennifer for her view on the Blockchain and gains some insights into why it isn’t the likely cure-all for supply chain security.