Dear Santa,
Truth be told, 2007 was a weird year on the policy side for supply chain risk managers. After passage of the bipartisan and relatively reasonable SAFE Port Act in 2006, a new Congress charged in and decided that they needed to mandate 100% overseas scanning of all cargo bound for the U.S. -- without waiting to see the results of pilot projects that were set to test whether this was even possible.
Customs and Border Protection (CBP) spent most of the year doing a good job engaging the Trade on development of the new Security Filing (colloquially known as '10+2' and adding new data elements importers need to provide to CBP to help them identify potentially high risk cargo). Then, in an apparent effort to undue all that effort, the Department of Homeland Security (DHS) went off on its own and decided to solicit bids to pilot a 'Global Trade eXchange (GTX)' without bothering to consult with anyone in the Trade industry as to how such a system might work, or whether it was even needed.
So, Santa, given the rather mixed year we've had, I'm going to be a little selfish for 2008 and ask that we try our best to spend finite time, energy and money where it would be most useful. Here are my four wishes:
1. A standing public-private forum to jointly set the supply chain security agenda: Since 9/11, the Department of Homeland Security and CBP have leveraged the Commercial Operations Advisory Committee (COAC) as a way to get input on supply chain security policy from the trade community. COAC's original raison d'etre was to provide private sector advice on customs activities when U.S. Customs was the second largest revenue generator for the U.S. government after the IRS. While this was a good temporary solution, it's time to set up a separate body to jointly set the supply chain security agenda. Why? Because now we have the Customs-Trade Partnership Against Terrorism (C-TPAT), the public-private partnership to secure the country's supply chain. No offense to any of the COAC members, but some of the companies represented aren't even in C-TPAT. One criticism against C-TPAT is that the benefits aren't worth the cost. One suggestion for a new benefit: C-TPAT companies would be allowed to rotate through a committee to jointly set the supply chain security agenda.
2. An executable recovery and restart plan: The average American might be surprised to learn that more than 6 years after 9/11, we actually don't have a plan to recover and re-start the U.S. supply chain in the event of a man-made disruption. As everyone probably recalls, after the 9/11 attacks, the U.S. government closed the borders and shut down all air travel. What people might not remember is the immediate impact on supply chains: Toyota, adhering to it's just-in-time philosophy, came within hours of shutting down an assembly line in Indiana as parts routinely supplied by air from Germany were delayed. In our 21st century flat world, supply chains are so integral to the U.S. and world economy, that we must have an executable recovery and restart plan to ensure our system is resilient. The Maritime Infrastructure Recovery Plan, or MIRP, is good if you have insomnia, but won't help us recover after disruption. We need something that we can actually exercise and implement.
3. A National Intelligence Estimate (NIE) on threats to the global supply chain: The average American might also expect that, what with all the hullabaloo surrounding port security, especially in the wake of the Dubai Ports World brouhaha (How about that? I used 'hullabaloo' and 'brouhaha' in the same sentence!), that the danger to U.S. ports and supply chain must be clear and present. It might be, but it might not -- we actually don't know, because we've not done an intelligence estimate to characterize the threat. The country's supply chain is part of our critical infrastructure, so is clearly a vulnerability worth protecting -- but we'd probably be a whole lot more efficient at protecting it if we did more analysis to better refine the realistic threat scenarios.
4. Intelligence sharing between the public and private sector: One reason we probably don't have an NIE on the global supply chain is that there are few if any experts on supply chains within the military or civilian intelligence community. But this doesn't need to be a showstopper. Let's use the example of another public-private partnership noone has ever heard of -- the State Department's Overseas Security Advisory Council (OSAC). OSAC analysts collect risk intelligence from Embassies and private sector companies overseas, then share that analysis between the public & private sectors -- and it's been working successfully for 20 years! OSAC does a great job assessing threats to people, facilities, and intellectual property, but doesn't focus on the supply chain. There are private companies - importers, consolidators, ocean carriers, terminal operators - that all can and do collect business-related risk intelligence, and many would be willing to share this information. We just need a mechanism to do it. So we can either give OSAC the mandate to cover the supply chain, or use the OSAC model to create a similar organization to connect with CBP. I'm not saying this would happen over night, but it's also not like we need to invent cold fusion -- the model exists, all we need to do is replicate it.
So, Santa, I know this is a lot to ask for, but I just think the supply chain is worth it. Oh, and if you can deliver on these, I could make it worth your while -- maybe even see if we could put together your own just-in-time supply chain so you wouldn't have to depend on all those darn elves, what with the rising cost of labor at the North Pole. So consider yourself a supply chain stakeholder, and if you're really good, we'll put in a good word with CBP and see if we can't get you in to C-TPAT. That oughta save you some time crossing into the U.S. on Christmas Eve.
Merry Christmas,
Big S
