A New Hope for Supply Chain Risk Management: How Knowledge Graphs can help you avoid building the next Death Star
In a galaxy not so far away, exploitative labor practices, lack of transparency, and violations of indigenous rights in the supply chain were unfortunately quite common. These behaviors involved various actions that disregarded human rights and ethical standards. In order to counteract these practices, a mighty authority known as the Federal Office for Economic Affairs and Export Control (Bundesamt für Wirtschaft und Ausfuhrkontrolle or BAFA) decided to enforce a special powerful law known as the Supply Chain Act. This Act, with its formidable name, the Lieferkettensorgfaltspflichtengesetz or LkSG, compels enterprises with a presence in Germany to uphold human rights through specific due diligence obligations.
At its core, the LkSG Act requires German enterprises to establish a risk management system to identify and minimize the risks of human rights violations and environmental damage.
This Act has been in effect since 2023, initially applying to enterprises with a workforce of at least 3,000 employees in Germany. However, starting in 2024, it will also apply to enterprises with at least 1,000 employees. The goal is to hold larger enterprises accountable for their actions and encourage responsible practices across the board.
But here’s where it gets really interesting. The reach of these obligations extends beyond an enterprise’s own operations. It now encompasses their contractual partners and even the actions of other suppliers along the entire supply chain. So, no longer can an enterprise simply turn a blind eye once goods leave their own factory gates. They are responsible for ensuring ethical practices throughout their entire supply chain.
To further solidify its purpose, the LkSG Act lists eleven internationally recognized human rights conventions. These conventions outline the rights that must be protected, such as the prohibition of child labor, slavery, and forced labor, as well as ensuring fair wages, occupational safety, and the right to unionize.
If enterprises fail to comply with these obligations, the consequences are substantial. They could face hefty administrative fines, reaching up to a staggering €8 million or 2% of their annual global turnover. And for those big players with annual turnovers exceeding €400 million, the fine system based on turnover becomes applicable. That’s a powerful motivator to stay in line.
The BAFA wields formidable supervisory powers, empowering them to exercise extensive authority. They possess the ability to conduct unannounced inspections of business premises, compel the provision of information, scrutinize crucial documents, and, if deemed necessary, enforce substantial financial penalties.
Thus, the LkSG Act transcends being a mere collection of regulations; it emerges as a commanding force that demands action. This legislation compels enterprises to assume accountability for their conduct and actively strive toward a future characterized by ethical practices and sustainability.
Alas, across the expansive cosmos, an abundance of dubious creatures and seemingly idyllic celestial bodies persists, harboring nefarious deeds in their cosmic depths. However, fear not, for here emerges a champion of unparalleled might and wisdom — a Knowledge Graph, a force to reckon with, poised to vanquish ignorance and illuminate the path toward righteousness.
Using Knowledge Graphs to mitigate risk, you should.
A knowledge graph is a sophisticated framework that encompasses a vast array of interconnected information. This structured representation, akin to the Force itself, weaves together entities, concepts, and facts, forming a celestial tapestry within a graph database. Imagine it as a galaxy of knowledge, where entities, concepts, and facts are represented as celestial bodies linked by cosmic forces.
At the heart of a knowledge graph lies a graph database, which employs nodes and edges to model and organize data. Nodes represent entities such as people, places, organizations, or abstract concepts, while edges symbolize the relationships between these entities. These relationships bring coherence and meaning to the information, establishing a celestial web of interconnectedness.
Harnessing the power of the knowledge graph bestows upon its users a set of advantages akin to Jedi abilities:
1. Flexibility and Scalability: Much like a Jedi’s agility, a knowledge graph allows for adaptable data modeling. It can handle vast amounts of information, expanding to encompass the cosmos of data, while enabling swift and efficient querying.
2. Harmony of Heterogeneous Data: Just as the Force binds the galaxy together, knowledge graphs integrate data from disparate sources. Databases, documents, websites, and more converge to form a unified whole, unlocking a panoramic view of knowledge.
3. Embracing Semantic Wisdom: Like the ancient Jedi Masters, knowledge graphs capture the essence of data semantics. Relationships and their meanings are explicitly represented, unveiling profound understanding and enlightenment, and guiding us towards wisdom.
4. Unveiling the Mysteries: With a knowledge graph as your guide, you can embark on grand expeditions of data discovery. Traverse its interconnected nodes and edges to uncover hidden relationships, illuminating profound insights that lie beyond ordinary databases.
5. The Art of Contextual Reasoning: Knowledge graphs enable the use of the Force’s contextual reasoning and inference. By applying logical rules and algorithms, new knowledge is unearthed, breathing life into data and expanding the boundaries of understanding.
6. The Power of Integration and Analysis: As the Force binds all living beings, knowledge graphs offer a unified framework for integrating and analyzing data. By fusing structured and unstructured information, they empower advanced analytics, machine learning, and AI applications, enlightening us with their insights.
7. A Beacon for Sharing and Collaboration: Like the Jedi Council, knowledge graphs foster knowledge sharing and collaboration. They establish a common understanding, enabling organizations and communities to communicate, exchange ideas, and create together.
As the epic saga of the Knowledge Graph unfolded, its celestial radiance remained unwavering, captivating the hearts and minds of successive generations of Jedi, scholars, and intrepid explorers. They heeded its call, embarking on a quest to harness its extraordinary power and unravel the enigmatic tapestry of the galaxy’s knowledge, driven by a profound desire to safeguard against the resurgence of a perilous menace akin to the formidable Death Star.
With unwavering resolve, these seekers of truth and guardians of justice delved into the intricacies of the supply chain that birthed the malevolent behemoth, determined to chart every treacherous link and unearth the hidden machinations. Their relentless pursuit led them through a labyrinth of suspicions, where secrets lay shrouded in darkness, waiting to be exposed.
Human rights abuse and environmental damage, we can identify!
Let’s visualize how a general schema for the supply chain could look like:
The schema entails major supply chain contributors, such as manufacturers, retailers, distributors, and suppliers.
All contributors are connected via their corresponding relations. Thus, the schema shows how various supply chain constituents influence each other.
Additional information on sanctioned contributors can help identify risks and potential bottlenecks in the supply chain.
Smooth construction of the Death Star, we will enable! The Galaxy, we will rule!
The Death Star was the Galactic Empire and Emperor Palpatine’s ultimate Weapon of Mass Destruction, meant to be able to control once and for all the entire Galaxy (the Far Far Away one). It required unimaginable quantities of raw material, labor, and technology to see the day. And this makes it a perfect candidate for a knowledge graph: untangling its supply chain would enable the Empire to unearth hidden secrets and relationships crucial to its galaxy-dominating aspirations.
Let’s first explore what are some crucial elements of this Supply Chain Knowledge Graph.
- The organizations, governments, and leaders behind the product, the Death Star 1 Orbital Battle Station. We clearly see how the different branches of the Empire (Military, Senate, and Ruling Council) and Emperor Palpatine are behind the construction of the Death Star.
- The components that make the Death Star, such as the Hyperdrive Engine, Superlaser, and TIE Fighters.
- From there, we can find out about the raw materials needed to construct these components as well as those companies involved in the manufacturing, extraction, and supply of those raw materials.
- Then we know about the planets, territories, and star systems where those companies and raw materials are located in.
- Finally, this enables us to understand who may benefit or be linked to these planets and trading posts or routes.
Let’s take an interesting case, Kyber Crystals. These are force-attuned crystals that are used by Jedi Knights and Sith Lords alike, for their lightsabers. However, they are also an incredibly powerful source of energy, used by the Death Star’s Hyperdrive Engine. When the Empire buys these crystals, on the planet of Jedha, they may be depleting the raw material needed for the Jedi’s most important weapon. However, they may also be hurting their own Sith Lords by driving the price of Kyber Crystals up.
In addition, Jabba the Hutt, the Hutt crime lord, is a prominent tradesman in Kyber Crystals, and it is important to recognize that he may be benefiting greatly from the construction of the Empire’s Death Star.
It is not usual for us to help the Empire in its planet-destroying activities, however, if Darth Vader had used our Knowledge Graph, he’d be much wiser about the position of the Rebel Alliance in the Supply Chain of the Death Star. On the other hand, if the early Galactic Republic also did, they might have known about the insidious expansion of the Sith Lords in the highest ranks of the Galactic Senate.
May the Knowledge Graph force be with LkSG!
Now, let’s say, Force Forbid, that we want to help the Rebel Alliance thwart the Empire’s Death Star construction. The most effective way would be to sabotage Intergalactic Ore’s activities in Corellia. This would disrupt the interstellar supply of Durasteel, a crucial material for vehicles, droids, and all kinds of structural components. Knowing that Han Solo comes from Corellia is incredibly useful intelligence for the Rebels to plan out this sabotage mission.
The presented schema is obviously not exhaustive and could be extended, which would enable us to identify environmental damage and human rights abuse:
- Private companies could have information about the percentage of forced or child labor in their workforce as well as the survival rates of their employees: potentially identifying human rights abuse.
- We could also know about the economy and politics of a country or region. For example, political stability, sanctions, or the frequency of natural disasters can influence supply chain resilience.
- Raw material entities could tell us how much of that resource has been extracted, to better identify and manage resource depletion.
- Products could lay out their emissions and the percentage of green material it is composed of.
Now, let us depart from the Far Far Away Galaxy and envision the implementation of the supply chain framework within industries such as fashion, pharmaceuticals, or the automotive sector.
We cannot guarantee that the Death Star would fare well in the above metrics, but this is exactly why our Knowledge Graph is useful — it can help enhance environmental conditions and improve the working conditions within the galaxy we all live in.
