As global supply chain and logistics managers prepare for external threats like cyberattacks, they may overlook more imminent dangers in their own information technology systems.
Supply chain risk management specialist Resilience360 recently released its first annual risk report, which outlines what the company regards as the most serious risks to global supply chains.
The top three dangers cited by Resilience360 are trade flow, cybersecurity incidents, and climate change paired with extreme weather conditions.
These are all serious concerns that logistics managers must be prepared to deal with—but degraded IT system performance is just as much of a threat to supply chains.
Data is the key to successful supply chains. Companies must be able to immediately see every phase of production and distribution.
A suboptimal IT system can inhibit the visibility and transmission of essential supply chain data and limit a company’s ability to react to threats.
Conversely, supply chains operating on high-performing IT systems can make companies more competitive, even leading to higher sales volume, more satisfied customers, greater process efficiencies and increased profitability.
Global Supply Chain Challenges
IT systems are experiencing increasingly heavy burdens because of the evolving global supply chain. While traditional supply chains have fixed transportation links monitored based on static key performance metrics, the new ecosystem consists of interconnected global companies. While this increases speed and responsiveness, it requires up-to-the-minute information and very close to real-time ability to react.
For example, a March cyberattack on aluminum maker Norsk Hydro ASA nearly crippled the international supply chain for specialized technical aluminum products. In addition to dealing with production issues, the company had the mammoth task of locating essential data including customer orders and fulfillment instructions.
The transportation network involved in the supply chain is in itself incredibly complex:
- In the U.S., Amazon, FedEx, and UPS alone are capable of putting over 900 cargo jets in the air at the same time, each controlled by individual air traffic control towers—together handling just 5 percent of the nation’s freight, CNBC reported.
- Another 16 percent of U.S. freight goes by rail, through a network in which 700 individual carriers, each with its own system, moves over 437 million freight carloads per month, the government reported.
- Most of the rest—$12.4 trillion worth per year—goes by truck, via some 777,240 different carriers, each of which also has its own system, the government reported.
In some industries, sophisticated artificial intelligence tools are being used to coordinate supply chain data. But the success of these tools hinges on the overall IT system that is responsible for collecting and delivering this essential information.
IT system speed is dependent on its input-output (I/O) capacity, which degrades over time no matter the underlying hardware infrastructure. This is especially true in the Windows environment, where an MS-SQL database application might be operating at as little as 50 percent of its optimum I/O speed.
Global supply chain complexity and need for instant access to rapidly changing data make it imperative that IT managers constantly maximize throughput. Fortunately, tools exist that enable this to take place in background at the system software level—where problems originate in the first place.
I/O performance degradation is purely a software issue. While adding hardware can temporarily mask the problem, it cannot solve it.
Targeted performance enhancement software solutions, at minimal cost and running in background, can improve total system throughput by 30 to 50 percent or more with no additional investment in hardware. They should be part of the toolkit of any IT manager in the supply chain and logistics field.
Jim D’Arezzo has a distinguished career in technology that started at IBM and has included senior executive positions at Compaq, Autodesk and as President and COO of Radiant Logic. He is currently CEO of Condusiv Technologies, the world leader in software-only storage performance solutions for virtual and physical server environments.
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