Information overload

One of the many promising things about this technology is that it creates the potential for pre-shipment data-sharing among multiple participants in the supply chain. For example, on the demand side, a retailer could share sales data with vendors, 3PLs and carriers in real-time as it occurs. And on the supply side, a shipper could share its inventory levels with customers.

The risks

Ironically, while data-sharing is intended to reduce supply chain risks, sharing more data can expose companies to unwanted consequences.

The main risk is of an unauthorized access caused by a security breach. A common commercial information breach is the disclosure of proprietary company information to competitors and/or the public at large.

This can include sensitive customer information, supplier data or internal intellectual property.

A related problem is the misuse of financial information to facilitate fraud. If someone from a competing firm gains unauthorized access, he or she could delete or alter data relating to orders, pricing or products.

It’s important to note how such data thiefs get as far as they do.

Often, they will hunt down passwords using “sniffer” or “cracker” software—one of the simplest and most common methods of attacks. Many will also engage in spoofing attacks by forging the “from” address so that a message appears to have come from a colleague, co-worker or another trusted source. Most people don’t think twice before sending information—possibly confidential—right back.

One of the problems in sharing information is that data security is often only as strong as its weakest link; all it takes is one mistake email to give someone access to an entire network of information. From here, he or she can modify order, shipment or billing information to his or her own benefit.

In today’s ethics-driven business environment, it may seem unlikely that a competitor would resort to such measures, but it does happen.

It is therefore essential to carefully plan and implement the necessary security measures to protect points of communication and to ensure that key information is not compromised. Needless to say, it is important to have a good firewall around confidential data and experienced staff on hand to maintain it properly.

If you can protect yourself, you’ll be able to share information effectively. That will put you one step closer to a truly collaborative supply chain.

Dave Luton (dluton@cogeco.ca) is a consultant in the greater Toronto area.