4 Risk Mitigation Lessons from The Golden Age of Digital Piracy

Published : April 1, 2015

computer-hacker-graphicAt first blush, it may not seem like the seedy underbelly of technology and your supply chain have much in common—but they do. You run a legitimate business through legal means, of course, but that doesn't mean you can't learn supply chain risk mitigation tips from those that walk the other side of the legal line. By examining the "holes in the armor," so to speak, of big name piracy perpetrators like Napster and victims like the movie industry, you'll undoubtedly see correlations to your own risk scenarios—solutions for preventing them.

1. Don't Be an Easy Target

Much like pieces of digital media, the safeguards you'll need to keep your supply chain operating smoothly and free of data breaches are twofold: prevention and scanning.

Prevention

Keurig, arguably the most well-known manufacturer of pod-based coffee machines, recently faced down unauthorized third-party "K-cup" manufacturers. As The Guardian's Alex Hern explains, they reacted by introducing a mashup of DRM (Digital Rights Management) technology and java—the coffee bean sort, not the programming language. By adding a Keurig machine-readable code to the top of official K-cups, the company made things far more difficult for the purveyors of these knock-offs. The machines won't brew with unofficial K-cups anymore, and those in need of a cuppa will need to stay within the lines for their morning mug.

Ask yourself: how easy is it for your supply chain members to peddle your secrets? How likely is it that at least one of them could create a copy of your data or product?

Scanning

Writing has long been a fairly cut-and-dry profession –the writer produces the book, the publisher prints it, the reader buys it. With the advent of e-readers and digital books, however, the waters got a little more murky. Now, much like the illegal free trade of songs on services like Napster and Limewire in the late 1990s, authors are discovering their books turning up as free-to-download files on illegal sharing sites. Huffington Post's Andrew Losowsky explains that between a resource-scarce publisher and writer, it often falls to the latter to hunt down and deal with these third-party sites to protect their work and the value tied to it.

Ask yourself: How often are you actively practicing supply chain risk mitigation? When was the last time you combed the market for stolen designs or data that may have originated from a leak in your supply chain?

2. Choose Your Routes Carefully

When moving product or data from point A to point B, how much of your internal processes are transparent to the public and, by extension, your rivals? It may seem somewhat innocuous to have data like your shipping routes out in the world, but from those shipping routes, a competitor can calculate if your shipment may run into delays and take advantage of that position, or even where your supply chain providers are located in order to woo them. Pay attention to the routes your data and products take to reach you, and keep transparency on a need-to-know basis, rather than broadcasting it as a SOP.

3. Be Prepared For Anything

If something has value, someone will attempt to steal it at some point. Even if your finished product is highly specific with a narrow use, it can be broken down for components or used as a weapon to slow down your success or "send a message" in the hands of activists. Mitigating supply chain risk isn't about playing whack-a-mole with individual issues like these threats so much as adapting your growth plans to incorporate flexibility as a core value. Consider questions like these when discussing risk strategies:

  • What will I do if one of my products is copied or stolen?
  • Who leads the charge towards a solution if there's a threat?
  • What are my options if one of my suppliers "goes bad?"

4. Disruption Always Seems Bad in the Moment

Some of the most innovative business models have risen from the rubble of disruption. As Erik Kain of Forbes notes, wildly successful, legal entertainment streaming services like Netflix and Hulu were a natural evolution of digital piracy.

If your supply chain risk mitigation fails and the proverbial ceiling comes crashing down, the noise, damage and implications can completely paralyze even the most assured decision-maker. But a flexible business—and a flexible supply chain—can rally and recover.

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Topics: Supply Chain Technology

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