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Winding up The Supply Chain Doomsday Clock (Part 2)

While part one of this series focused on risks close to home, it’s time to consider the risks that span the globe.

Leon Neal / Getty Images

Risks in the supply chain are unavoidable, but often there are far too many to count. Prioritization of your risks is the best way to decide which ones require the most attention, and which ones may not be as bad as they seem. To mitigate your risks, you must first understand them.

In part two of this series, we’re going to zoom out and take a look at risks that affect supply chains all over the world. Keep in mind, that just because they’re bigger, doesn’t mean they are necessarily worse. Appearances and mainstream publicity can be deceiving. Let’s find out how these stack up on our Supply Chain Doomsday Clock.

Crisis #1: Electronic Component Shortages (20 Minutes to Midnight)

Qilai Shen / Getty Images

You may have heard or seen countless articles about “surviving the shortage season,” and while I myself am guilty of publishing one, the fact of the matter is that shortages in the electronics industry have ebbs and flows.

Throughout 2018 and into 2019, a massive spike in demand from the automotive and IoT industries caused components like Multi-layer ceramic capacitors (MLCCs), Microcontrollers (MCUs), and others, to suddenly have gargantuan lead times. It was a very real problem and a direct result of electricity and technology finding its way into things that were often devoid of them.

But that was then, and this is now. Where do we stand on this issue? Well, as a result of tactics like panic buying, or double-ordering, we now have an issue where demand is leveling off and inventories are too high.

Industry predictions believe things will settle out for most components by the end of 2019, but major shortages like the aforementioned MLCCs could take until 2021 to find stability. Shifts in demand are to be expected, and shortages are nothing new. Ultimately, having a long-term and sustainable approach is the best way to keep this risk in check.

This quote from Tobey Gonnerman, executive vice president of global trade for Fusion Worldwide, summarizes the situation nicely:

“In general, it feels like we’re in the eye of the storm. We don’t feel like the back-end of it will be stronger than the front that already came through, but certainly there’s increased market instability in the forecast.”

Crisis #2: Counterfeits and Security (3 Minutes to Midnight)

Carmen Jaspersen / Getty Images

Perhaps the most dire risk on our collective Doomsday clock is the rampant counterfeits that have found their way into the supply chain. Combine this with an ever-present need for better security in our devices, and you have a problem that could spell doomsday for anyone in the supply chain industry, large or small.

As an example, consider medical devices. These electrified designs assist in diagnoses, treatment, and all manner of critical conditions. To compromise these is to play with life and death in no uncertain terms. All it would take is a single counterfeit component to worm its way inside, and the device could stop working or never work properly from the beginning.

The same could be said of military and defense manufacturing. Mission critical devices cannot afford to have issues. We all recall the rush of news that came with Bloomberg’s article The Big Hack, and while the report itself has a murky reputation, the concept behind it is absolutely possible.

Counterfeit components find their way into the supply chain during times of duress. The aforementioned shortages, for example, can lead to questionable sourcing decisions in the name of production.

To put things in perspective, Industry Week reported that consumer and industrial businesses are losing approximately $250 billion each year because of counterfeit components. So, it’s clear the issue isn’t related solely to military and defense technology.

Keeping this risk at bay should be a top priority in your organization. Implement authentication processes that are difficult to circumvent, educate your employees on anti-counterfeiting practices, and leverage security technology like blockchain to keep your supply chain free of problematic components.

Crisis #3: A Lack of Security in our Devices (5 Minutes to Midnight)

Joan Cros / Getty Images

Second to the issue of counterfeits is the complete lack of security in modern devices. It’s a combination of poor focus and a lack of education for end-users. More and more devices are becoming “smart,” but very few of them are actually safe.

We’ve heard the horror stories about hackers getting into Nest camera, botnets attacking major infrastructures, and countless companies apologizing publicly for yet another data leak, but what are we doing to stop these things?

Security should be a focus from the inception of a product. Far too many smart devices don’t take this into account during the design stage. There should be a greater focus on keeping firmware updated, and the concept of default usernames or passwords should go to the wayside.

Simultaneously, people need to educate themselves more. What defines a strong password? How can I defend myself against brute force attacks or ensure that my connected devices aren’t part of a larger botnet?

These are the questions we need to be asking and answering in the electronics industry. The more our products become connected, the more we need to address and ensure vulnerabilities in their security, or this crisis will find itself edging ever-closer to midnight.

What Will You Do?

Articles like this one cannot offer a one-size-fits-all solution. There are far too many factors and variables for that to be a possibility. Risk is also something you will need to accept before you can start taking steps to mitigate it.

Ultimately, the purpose of a piece like this one is to put ideas into your head. Prioritizing the risks that pose the most threat is half the battle. We can no longer ignore the problems of the supply chain, and while we can’t fix all of them, facing them head-on is a good place to start.

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Bradley Ramsey

Bradley Ramsey

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Technical Writer at Supplyframe. Lover of dogs and all things electronic.