The urgent need to protect the global supply chain

By Janet Napolitano
January 27, 2012

Every day, staggering numbers of air, land and sea passengers, as well as millions of tons of cargo, move between nations. International trade and commerce has long driven the development of nations and provided unprecedented economic growth. Indeed, our future prosperity depends upon it.

At the same time, threats to trade and travel — whether from explosives hidden in a passenger’s clothing or inside a ship’s cargo, or from a natural disaster — remind us of the need for security and resilience within the global supply chain. A vulnerability or gap in any part of the world has the ability to affect the flow of goods and people thousands of miles away. For instance, just three days after the earthquake, tsunami and nuclear tragedies struck Japan last March, U.S. automakers began cutting shifts and idling some plants at home. In the days that followed, they did the same at their factories in more than 10 countries around the world.

Ten years after the terrorist attacks of Sept. 11, 2001, we also continue to see the determination of individuals and groups to disrupt economies by targeting our transit and cargo systems. Understanding the seriousness of these threats underscores the need for a continued focus on protecting the global supply chain.

Just as important, we must move away from the outdated dichotomy that we have to choose between trade and travel efficiency, and trade and travel security. Security and efficiency must no longer be seen as mutually exclusive. It is possible to enhance security without increasing wait times, creating more paperwork and driving costs higher – and we are doing so already.

As I announced at the World Economic Forum in Davos this week, the United States released a National Strategy for Global Supply Chain Security, the product of more than two years of collaboration across the U.S. government, and with international and domestic public and private partners.

The National Strategy, created with the input of more than 60 subject matter experts and hundreds of supply chain stakeholders, takes a whole-of-nation approach to global supply chain systems, with two explicit goals: promoting the efficient and secure movement of goods; and fostering resiliency.

We will pursue this strategy in three main ways:

First, we will maximize resources and expertise from across the United States government to find smarter and more cost-effective ways to address security threats. This includes developing common standards, streamlining our processes and enhancing our information sharing.

Second, we will seek to foster an all-of-nation approach to leverage the critical roles played by domestic governmental and private-sector partners. The supply chain is vast and complex, touching points of manufacturing, assembly, consolidation, packaging, shipping, and warehousing, as well as supporting communications infrastructure and systems. All must play a role in its protection.

Because protecting the global supply chain is inherently an international challenge, it will take an international effort to meet it. The tremendous benefits we all reap from an interdependent global economy means that we are all stakeholders in the security of that system.

And third, we will continue to think globally, enhancing our coordination with the international community and international stakeholders who have key supply chain roles and responsibilities. We will seek to develop and implement global standards, strengthen detection, interdiction, and information-sharing capabilities, and promote end-to-end supply chain security efforts with the international community.

All nations have a stake in the supply chain’s success, and only through international cooperation will we all share in its benefits.

Over the next six months, U.S. government agencies, including the Department of Homeland Security, will reach out to a wide range of partners to implement the Strategy together, and to foster a secure, efficient and resilient global supply chain.

As globalization brings nations closer together, we need to jointly disprove and leave behind the notion that security and efficiency cannot coexist, and together build a security architecture that better uses information to assess risk. By taking a coordinated, strategic and thoughtful approach, we can expedite legitimate commerce while focusing our attention on that much smaller portion that poses harm. Security and confidence in the global supply chain enhance our collective economic strength, rather than impeding progress.

Our mutual understanding of this changed relationship will help us better secure the global supply chain, better promote trade and travel and ensure future economic growth. Together we can meet our shared goals, continue to build on our considerable progress, and strengthen the global supply chain to meet today’s challenges and tomorrow’s.

14 comments

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What planet is this woman living on? Uggghh.

Posted by skintnick | Report as abusive

I live in Hungary and I am appalled by US security when I fly to the States. Your organization has been very consistent in sacrificing privacy and the right to movement to arrogant and intrusive security procedures.

Patdowns of six year olds and 95 year old women. Deployment of devices that allow your people to see the genitalia of travelers.

Requiring digital fingerprints and photos taken of all visitors not possessing a US passport.

Your pathetic attitude that you have the right to do virtually anything in the name of security disqualifies you from public service.

Sincerely,

Roderick Beck
Budapest.

Posted by RoderickB | Report as abusive

Amen.

Posted by Bob9999 | Report as abusive

What you say is well thought out and thought provoking. We Americans tend to see things entirely from our own, narrow perspective. Sometimes that works. Clearly on Sept. 11, 2001, it didn’t. So I’m going to make a few wholly un-American suggestions for consideration.

First off, leading up to World War II, the fanatical Nazis in Germany were a tiny minority. Because of their willingness to intimidate or compel the cooperation of others, they ultimately came to completely dominate the economy and public policy of the German state. My eyes and ears tell me the radical/militant muslims are taking the considerable resources and influence of Islam down this same path. Peaceful muslims dare not oppose them, privately or publicly, if they value their lives.

For this reason I believe controlling events, both past and future, demand that we adopt “smarter and more cost-effective ways to address security threats” more in keeping with the way the Israelis do things. I think we need to “feel up” less of the elderly and search their colostomy bags and do more racial profiling since, to paraphrase bank robber Willie Sutton, “that where the threat is”.

We need to know who is behind each veil, what is in each turban or robe. Even in the middle east I don’t recall reading about a mother rigging herself with a bomb while carrying a genuine baby; but we must verify things are as they appear to be before it’s too late.

We must realize that the “suddenly it’s 1200 and it’s paradise” mind set is NOT philosophically compatible with a “all-of-nation approach to leverage the critical roles played by domestic governmental and private-sector partners”. They want to bring down ALL advanced societies and rule the survivors.

China cannot today deliver an atomic bomb to America’s soil with a bomber, but it would be child’s play to bring in rocket launchers in containers containing no radioactivity whatsoever and smuggle in “suitcase parts” to put small tactical nuclear payloads in missiles before launch. Given the number of containers coming, around and about, it seems quite feasible to send an H-bomb to a Walmart in Washington DC for future blackmail. Would we, could we afford to “call such a bluff”?

All nations do NOT have a stake in the supply chain’s success. There are scenarios where international competition will NOT be to “share” benefits at ALL! We must never forget that everyone doesn’t see the world as America does, or play by “our” rules! The first and foremost challenge of tomorrow is to SURVIVE!

Posted by OneOfTheSheep | Report as abusive

Your analysis is naive and simplistic at best.

Ignoring the realities of global trade, in which we are NOT “one big happy family” all seeking the same goal is what what is into this mess in the first place, and an impassioned plea for global cooperation at this point isn’t going to protect the US — which should really be (but obviously isn’t) the only country that matters to us — from those who would do us harm.

The ugly truth is we are wide open to any group or nation that cares to injure us in any way they want, at any time they want, and it is our own fault due to our greed and stupidity.

Posted by Gordon2352 | Report as abusive

Now that just pisses me off thinking ‘one-world’ is our solution. Because so far its been the cause of the largest economic meltdown in human history. We need more imports to fill our department stores?… because 80% ‘Made in China hasn’t a problem to America’s labor?

We hear protectionism doesn’t work…and refuse to tweak or fix it (how about THAT approach with Wall Street or the banks, eh?).

Protectionism means jobs and since India’s strong protectionism and social policies left it largely unscathed in the meltdown…. where really is the lady coming from! One role of government is protection… and national identity. Of course one-world seeks to eliminate and scoff all profits and power.

Corporate imperialism is what capitalism unhindered morphs into… and I’m thinking socialism is so much a better option for democrats in this climate… its ust more democratic…cuz… really how much democratic voice is there when corporates own media, government and then takes OUR money, hides theirs and claims their government handouts and tax deductions while sending OUR jobs overseas!!!

Yeah, WE need to protect those processes. WE pay tax dollars for a military might to protect corporates… weren’t we already brainwashed to get government ‘out of the way’. Oh, you wait, that was only OUR government protection (food, safety regulations, social programs), not seriously meaning the big guys, they still want to get free rides to bulging profits off a humble and compliant government doing its bidding, including clearing the world’s opposition to its right to trade. Really, this is too much. You can have back my cheap, disposable imports clogging dump site.

Posted by OlliGo | Report as abusive

Ten years ago I first heard of such a thing as the “Homeland” that must be secure at all costs. It took the next decade to hear of the “global supply chain”.

It’s sickening. This woman has no integrity at all and neither have the last two administrations.

Posted by paintcan | Report as abusive

I guess if the U.S. goes to war with China, then the government will have to figure out how to re-fill all the empty shelves at the local Walmart (and just about every other store).

Posted by nose2066 | Report as abusive

This is just another bailout for large U.S. Multi-nationals who, for the past 30 years have abandoned America in favor of foreign countries where they enjoy lower labor costs, and pay little or nothing in U.S. taxes. It is not enough that we taxpayers are paying for 1000 military bases around the world to protect these companies. Now Ms. Napolitano is spearheading an effort to spend more taxpayer money on still more extraordinary efforts to protect the profits of those large corporations which have abandoned America – except when they want a handout from the government.

I say let them fend for themselves in protecting THEIR supply chain. There is no longer any benefit which accrues to the average taxpayer from having large multinationals domiciled here. In fact, many, like Transocean have packed their bags and reside in Switzerland. They give us few jobs, pay little in taxes, get subsidies from their cronies in the government, and send us overpriced products produced in foreign lands (e.g. Apple) and now we are going to protect THEIR supply chain. Things get more bizarre in the U.S. by the month.

Large companies are posting record profits from all these machinations; they can afford to protect themselves. Apple sits on $100 Billion dollars in cash, and now taxpayers will help them out by placing Homeland Security on flights from China to protect all those I-Phones that are so vital to our National Interests. And if the terror alerts increase, the military will even likely protect these IPhone shipments via war plane escorts, as well as drones flying over the factories in China.

The people who come up with these ideas have too much time and money on hand. The fact is, that most of these interruptions have been due to Floods, Earthquakes, Nuclear meltdowns and the like. It is typical of government to whip up a frenzy over terrorism, when the real problem is natural disasters from global warming, fracking, etc. This shapes up as another boondoggle like invading Iraq, after a bunch of Saudi’s took down the World Trade Center. In any case, I am going to watch with interest as Ms. Napolitano and her colleagues take on Wind, Fire, and Flood in order to protect our Christmas shopping next year, from disasters which even the Almighty has failed to banish from this earth.

Posted by 99percentme | Report as abusive

The world needs secure supply chains. Counterfeiting, smuggling, theft, corruption, contamination and terrorism all present very real risks to the stability of global trade and, in turn, the well-being of the wider communities that we all live and work in.

Many customs departments are heavily focused on the prevention of terrorism, which in today’s society warrants attention, but it is very rare for commercial and business issues to be brought into this equation. Admittedly, the 9/11, London, Madrid and other global terrorism focus did not specifically target the average ‘supply chain’ operator but businesses where still affected in some way or other. The fact that in the past customs barely discuss the security issues that affect the international trading community shows the gulf between the supply chain security objectives of governments and the actual everyday commercial needs of businesses.

The prescriptive manner in which DHS specifies a list of requirements, irrespective of the nature or scale of the “business” is a narrow minded approach to a very broad topic.

Businesses that correctly and accurately apply security risk management to their business operations by default are contributing to their responsibilities for supply chain security. The security of the business operations may or may not include some of the DHS security criteria, but when is a secure business not a secure trader.
CBP obviously do not trust businesses to secure their own business operations, otherwise they would not be utilising a checklist approach to security.

The logical approach is security risk management, but when it comes to the application of risk management to security, the US government is lagging behind the rest of the world in their understanding and application of “risk”, hence the precriptive checklist used in C-TPAT.

Posted by SecManSys | Report as abusive

If China went to war with the United State then the people in China would revolt. Their factories would cease to function. Yes, China supplies most of the world with goods, but a large majority of those goods come to the United States. There is so much involved in the delicate balance of the global economic politics stage to worry about war. If there is a war then it will be mostly staged and trade will still continue with China in my opinion.

Just look at what Newt said at one of the debates. He firmly believes that some attacks should be allowed to happen to remind people in the US of how important security is to them. What a farce. So the taxpayers need to pay for all this bureaucratic nightmare, and attacks need to be let through so we can be reminded of why we are paying all this tax money for these out of control agencies.

Posted by WannaBeGeekster | Report as abusive

All your world are belong to us

Ha Ha ha…

Posted by Bezukhov | Report as abusive

I have just returned from China where I saw stores selling garments manufactured in Morocco, Bulgaria and Italy for the Spanish retailer Zara; I saw mineral water imported from France on sale in Carrefour´s Chinese supermarkets and Indian curry sauces produced in England, as well as a huge variety of other western foods, on sale. This trade is not simply a result of globalisation, but a consequence of the shipping containers returning empty from Europe and the U.S such that shipping costs to Asia are negligible.

Clearly this trade is unsustainable in the long run. When surplus shipping capacity is eliminated, by bankruptcy or merger, and transport costs revert to the mean this business will cease to be profitable and jobs in the west will evaporate overnight. What will be the reaction of the DHS to this threat to U.S. Economic prosperity? Its commitment to defend what is transitory makes conflict inevitable.

Posted by goatdancer | Report as abusive

Global Supply Chain Security sounds very promising but it takes time to develop and implement. I think there should be something private sector can do to help government now. Security is traditionally the integral part of supply chain risk management. In order to enhance the level of security of global supply chain, private sector should know how to identify each type of risk.

According to this paper http://www.scm-operations.com/2011/08/pr actical-supply-chain-risk-management.htm l there are some types of risks that have direct impact on global security. Human Resource risk is the first example. We should conduct HR audit at overseas facilities to ensure that suppliers and their employees don’t have any link with terrorist groups. Distribution risk should be monitored to ensure that cargoes will be transported through proper route with sound security measure. Most manufacturing companies transmit a lot of data to trading partners overseas so IT risk should be monitored to make sure that terrorist groups can’t intercept valuable data.

Posted by BennieB | Report as abusive