Latest / The Decision Advantage / Demystifying the Global Supply Chain with Thomas A. Di Mascio
Transcript
- Brian: Welcome to the Decision Advantage, a fusion intelligence podcast by Fernand Consulting. I'm Brian LeClaire, and today I'm joined by supply chain expert Thomas DeMasio. Tom, welcome to the show. Thomas A. Di Mascio: Thank you, sir. Brian: Tom, you have a pretty impressive lineup of titles after your name. Can you give us a little breakdown of what those titles are and and what the roles mean? Thomas A. Di Mascio: Sure. Well, first off, I've been a supply chain practitioner for over thirty years, which is more than a minute. but the roles that I'm currently holding are the InfroGuard National Members Alliance Chair of the Supply Chain Cross Sector Council and also the Deputy National Transportation Sector Chief. And most recently I've been named as the executive director of the newly formed Global Supply Chain ISAC. Brian: Congratulations. Thomas A. Di Mascio: Thank you, sir. Brian: let's just dig in then. So when executives and board members hear the phrase supply chain, they often think about shipping containers and trucks and logistics because I I know that's what I tend to think of. So how do you define like the full scope of the supply chain? And where do leaders typically miss this bigger picture? Thomas A. Di Mascio: Sure. and Brian, that is a fantastic question. your supply chain, it's your lifeline. It's the entire ecosystem that links the initial idea of how to satisfy demand all the way to the satisfaction of demand. So I love the moniker supply chain as supply chain as it allows you to visualize the entire ecosystem and see how everything is linked together. But logistics and transportation are only a piece of a supply chain. And the C-suite and boards need to understand that first, the link of any supply chain is that ideation phase, the marketing and RD processes around how we're going to satisfy demand. And that includes your CRM, that's your customer relationship management tools. And then we connect basically every link after that to to manufacturing goods or providing the how-to of how we're gonna provide a service. And that satisfaction is demand at your c is met at your customer. So it's from A to Z. A lot more than just trucks, boats Brian: So a lot more than just trucks. Thomas A. Di Mascio: and and planes, yeah. Brian: Right, right. So can we talk a little bit about major global choke points around the around the world? 'cause we see we continue to see massive disruptions in areas like the Black Sea from say the war with the Ukraine or areas like the Red Sea and the Panama Canal. And so why why are these critical bottlenecks continuing to catch decision makers by surprise? And should they be doing something better to evaluate the risks? Thomas A. Di Mascio: Sure, I mean choke points and and what we're considering now as choke points in the in our supply chains, this has been a problem for centuries for mankind, as Sun Tzu wrote about it, you know. But in today's world it's just really a lack of foresight on what could happen. a lot of these black swan events that you just mentioned, unfortunately have been happening a bit too often and too close to each other. So those strikes, pandemics, all the geopolitical issues, the the the Horrible incident on the Franciscaki Bridge. So you you just can't make it up how many of these incidents we've had lately. but there there are some tools that allow us to prepare and to and to react, but you know, like geospatial tools. They're they're a gift from the god. You can be Superman in your supply chain and basically watch your your goods being shipped across country. but the real question, Brian, is How do we strategically mitigate the risk, not have to you always react operationally on the fly? So that's where the kind of the the the the lack of of foresight is. It's in that that planning. And there's gonna be financial and other costs, because strategic resiliency planning it's difficult, it's painful, but it's absolutely necessary. But the trick is how to be resilient and retain your competitive advantage. and that You can't price yourself out of the market, but you always have to remember that being resilient, staying alive, is part of your competitive advantage. So if you want to lean more into like the supply chain incidents that are happening around the world, there's a there's a great YouTube channel that I follow, a gentleman by the name of Sal McGurliano, and he has a show called What's Going On With Shipping and recently he just ran an episode on, you know, hey, it's not just the whore moose, it's it's the physical supply chains that have been happening all over the maritime sector. and also when we're thinking about choke points, we can't forget other challenges like those geopolitical challenges that could and may come up if China ever gets real hold of their their belt and road initiative and actually roll it out. you know we would be basically forced to use some of their trade lanes and also from a supply chain perspective sourcing is a big issue. w no matter how much we wanna manufacture things locally, in the United States, much of our critical infrastructure has been hollowed out in the last thirty years. So that's been probably one of our our biggest challenges as well. And that to me is is a major choke point. Brian: Right. So just being aware of where they are and how they're impacting Thomas A. Di Mascio: And how we could find someone locally, if if we can find somebody locally. Brian: Right, right. I mean, i it it seems like a lot of organizations rely heavily on like international partners for ground level intelligence and logistics and such, but but that, as you just said, seems like a double edged sword. I mean it it you know, it brings the local context, but it also introduces significant risk if something breaks down, right? So How how do risk managers balance like using those local operational partners while maintaining, supply resilience? Thomas A. Di Mascio: So again, it's it's really not on a risk manager or a group of risk managers within a within an organization. This is this is a C suite board responsibility. We have to be strategic about this. So this is something that we're planning out eighteen, twenty-four, thirty-six months out. you just can't manage risk on a fly. You can react to risk, but you can't manage risk, right? So we often take these risks, Or I should say we already we often take too many risks at the in the name of productivity and optimization. And that's all great until your brand name is unfortunately put at risk because of some kind of unfortunate incident that could have been mitigated. So take ownership of your business, and this may sound a bit harsh, but don't be lazy or complacent under the guise of efficiency. You know, y you can't be too reliant on others out of convenience. that in in in supply chain there's a term total cost of ownership And the C suite really needs to ensure that the due diligence is maintained in every link of the supply chain, and that's really your total cost of of of ownership of of being being in control of your supply chain. And then lastly, just a few other points is you know, you've got to do your homework. You've got to understand your threat landscape. And there are a lot of threats out there. So when you're importing goods, like my preferred Inco term, right, which is your your business relationship with With your overseas partners, my favorite ones were Xworks or FCA. So, what that allowed me to do is to take control over my goods at the door of the last place where they're being manufactured. So, what that means is, hey, it was a little more difficult for me. and I had to develop other relationships, but I kind of knew what was going on at the factories. I always kept my eyes in there, but also I made sure that I grabbed the goods as soon as they were ready, and I also used to create free trade zones where I could bring my goods in. Into and and mix them with goods from other factories and then export them out together in one or two or several containers. But you again, you really gotta drill down. You gotta visit your suppliers, know your suppliers, know where who they do business, where they get their raw materials from. And and you can have third-party audit firms that could run social audits for you, factory audits, product audits, but you really need boots on the ground, whether they're your boots or or an agent that the That's there in your stead, that's not the people who you're actually buying from, right? So it's it's you have to be strategic, is the bottom line. Brian: Right. And do you see companies doing this more often now or is it are still learning curve, people you know, companies getting to this? Thomas A. Di Mascio: I see them doing the normal human being thing, which is when something blows up, everybody's eyes on it, we're watching the news, we're listening, we're saying we're never gonna do that again, we're never gonna fall into that trap. But as soon as day two and day three, you know, the the sun rises again and you're you're just back to optimizing and the biggest difficulty is really breaking down the silos within your organization, changing changing your your culture of how you do business and and even just how you think. Again, you've gotta think strategically when you're when you're at that ideation phase, so you know again, twelve months, eighteen months later when product is being delivered or services are being rendered, that you've thought of the things that could possibly go wrong and you've got plans on how to how to deal with it. Brian: Right at Ferndon, we're often Thomas A. Di Mascio: Mm. Brian: talking about breaking down those silos of of of information and and you know, letting everybody in on on all the knowledge, right? Yeah. Thomas A. Di Mascio: Yes. Smar. Brian: Yeah. So looking beyond like the physical supply chains, what do you see as the most critical supply chain weaknesses that are directly impacting like physical infrastructure today? Whether that's energy or water or manufacturing, What are some of the proactive steps that organizations might be able to, you know, take to mitigate some of those risks? Thomas A. Di Mascio: So I work closely with a number of government agencies and one of the topics that we're always talking about is of the sixteen most critical infrastructures, you know, how do we rank them? What's the most important? what what do we need to to press go first, right? In in an emergency. And it actually always ultimately comes down to energy. It's our most critical of critical infrastructures. it would be absolute chaos if there was a widespread, prolonged black sky event and absolute chaos. mayhem would ensue. Not after, you know, the first day or two, but you you get past hour seventy two and and a lot of things just that need to happen aren't happening and our critical infrastructures would would die on the vine. And this isn't doom and gloom, this is this is reality. So again you have to think past the seventy two hours. But water for me is next. Because it's the basis of human survival and sanitation, we need water to power a lot of our systems, whether it's cooling or again humans drinking, or or cleaning, keeping keeping our our cities, our buildings, our people safe, right? So energy, then water. And then with that really kind of resilience begins at home and that's h at your home, but also within your organization is entities really need to understand every scenario that could stop. their ability to function. And we've had, again, some of these black swan events, I guess the most ones that hit home are like the, you know, Hurricane Sandy or when power goes out. I mean, you really start to see it. But again, after 72 hours, things are normally back to normal for most people. So you you really need to think of what would happen if that was prolonged. And then on a higher level, it really takes a coordinated and strategic coordination from our government. They need to build more incentives and disincentives for the private sector to become part of the solution. So you know it's it's really easy for a company to say, hey, I don't care about this. We got insurance for it. Or, you know, I'd rather take the loss than than invest the necessary capital, CapEx investment into strengthening my risk X, Y, or Z. But you know, in this world that we're living in now whether it's cyber intrusions or power going out and again lots of stuff can happen in your business. But you can't always say, well, again, I've got the insurance to cover that because insurance companies nowadays are being a lot more particular because many of these black swan events are happening one after the other and they're coming at you from all different angles, right? So you have to make sure that if you have insurance for something and you're gonna say or your culture is going to act out on on the belief that you're covered, make sure that someone in your organization is actually doing their diligence, due diligence on does my insurance actually cover that? And if so, what are the levels of mitigation that I need to perform in order to be paid back if something does happen to me that's that's significant in nature. Brian: And so you had mentioned government programs. Are there new government programs that are helping in this cause, or is that just something that we're we're hoping happens? Thomas A. Di Mascio: I I mean, as I look at our government, I just hope that they can, you know, get something functionally accomplished, right? So it's we're at a we're at a very hyperpartisan time in our in our history, so it it's made it more difficult, but we are seeing some focus on some good regulations coming out around around energy. around around water. So it it's it's important, it's being looked at, but not to the to the to the degree that it should be. Brian: Yeah, so do you feel like these at least the government is aware that these are the the biggest risks? Thomas A. Di Mascio: Some of the organizations I work with, when we're speaking to the executive branch or the two different houses of Congress, or our state legislators, sometimes they they've they don't really get it. They don't see what what the real problems are. Again, they're they're super busy people, they're they're immersed in this hyper partisan world. So, sometimes we have people from our organizations that that walk into doors again and and they're saying to to the speaker or again or to people in in the executive branch or different departments and some of our some of our thoughts are get actually it seems almost immediate my god really like an gosh moment and how can I help with this? But yeah but but we need to do more of that. Brian: So just continue to get the message out. Thomas A. Di Mascio: Continue to get the message out, yeah. Energy, water, and then like I said, there's sixteen critical infrastructures. One's more important than the other, but those are the those. There Brian: Right, I had no idea that there was a list of sixteen, so Thomas A. Di Mascio: are sixteen critical infrastructures that the government looks after, yes. Brian: the whole supply chain process and and system is has changed over the years and it continues to do so. what is your message to risk managers and business intelligence directors on how to deal with the changes? I mean you talked about it little bit, but how do they build up a better resilience to to deal with those changes? Thomas A. Di Mascio: Sure. again I I said it before and I'll say it again, it really begins at the C suite, at the board level, because this is where the culture is is solidified and set in stone and the directions set, right? So that's why the C-suite and the boards are so important because they're moving the you know the angle of where we're we're heading towards six degrees to the north and that's definitely changing the whole you know where we're gonna where we're gonna wind up in the end, right? So they need to change the culture because as I say in in the global supply chain ISAC is you need to know your weak is the link. And again it's not just transportation it is everything from IDH to your to your CRM to anything that could any link that could stop you from providing that satisfaction of demand at the end, that is your weakest link. And there could be several, right? There there probably are, right? But you need to know what your weakest links are. You need to know what your data is in your systems. What's crazy is a lot of people organizations. They're so siloed. There's they have all these different SaaS programs that are fantastic. They allow us to do business. and and information is moving from one system to the next. And again, it allows our s the the different chains within our supply chain to function. But what is that data? Where is it? How is it being stored? What's the governance over it? But but what happens if we don't have access to it if this program goes down. We also need to know our industry, right? So One of the things again I did as a practitioner is not just going to see where my suppliers are, but I would use there's some great programs out there that dive into import and export movements across the world into the different HTS codes. So those those those tariff codes that all countries use internationally as that it's it's basically a a classification system that allows us to import and export in the same language, right? We speak different languages but we'll know specifically what what this item is and or you know what it's made of, what the intention of it is. And that that'll depend or that'll make determ determination of of the export regulations or even the import tariffs or anything that needs to be held. So you really need to know your industry, but my point was you you can you could dive in with some tools to see what others are using f for for importing and exporting. meaning using who they're using for as partners, right? So you could see maybe for one item that you were only sourcing in one part of the world or or you you look and you say, my God, I could get this from Latin America, or I could get this, other people are importing it from you know, so you don't always have that in your institutional knowledge. Even if you're a very large billion dollar corporation, you don't always sometimes have that open mind because you're stuck in your again, in your culture and your legacy. So Brian: So being open to gathering information outside of your their normal. Thomas A. Di Mascio: Gathering information. Super, super, super important. So again, governance, especially over AI tools, it that's an absolute must these days. You have your institutional kind of AI where you could keep all your data in one place, but y are your people actually using it, or are they going home and and and using their AI and bringing work home and then all of a sudden some of your I don't know, some of your secret chemical formulas for your pharma product are actually now out there on the web or Or the next new invention of a light bulb, right? So you really have to be careful and understand the governance around your your AI. again, you're it's I mentioned the SAS programs. There's so many programs that are being used in an organization to pass along from one link to the other and they're fabulous. But if if someone in the C suite doesn't actually understand what's going on, and how vulnerable they are, it may not be on their radar. so The next point is you really need to collaborate, within your organizations and with others in in the same industry around best practices. there's no you can keep your trade secret secret and you don't have to give away your secret sauce while you're collaborating. And as a matter of fact, like the ISAC that that I'm working with now, it's it's Y the whole the whole function is you're collaborating with people in similar situations so you can ri mitigate risks and talk about best practices. Again, secret sauce aside, your formulas, you're good to go. And then just remember that any plan you make it's static, right? So your your plans need to be dynamic and they need to be organic. So once you create a plan and it's it's it's down in in your in your book, that's Brian: Mm-hmm. Thomas A. Di Mascio: like a financial statement, right? It's done. It's It's it's that moment in time. In six months now Brian: Yeah, it's a here and now. Thomas A. Di Mascio: Yeah, yeah. You don't know who you're doing business with now or that may be different or people change, but yeah, you need to be your your strat strategy needs to be dynamic. Brian: as we wrap up, if there's like one or two things that you wanted to tell people that would, you know, truly give them a decision advantage, w what would those be? Thomas A. Di Mascio: Again, collaborative culture needs to be from the C suite coming on down. So that culture needs to be solidified, but it's it's a cultural change that needs to take place. again you have to think about your supply chain end to end in that ecosystem kind of that chaotic thing that things are just happening all around you. How does it actually work? Let's let's map it out and even if the map is ugly, right? Because again it's an ecosystem. you need to understand your business from ideation through the final transaction and then practice makes perfect so if you're developing plans, if you're running tabletop exercises, which is an excellent way to dive down into whether it's the end to end part or or the different links within your chain, those tabletop exercises are phenomenal. And a lot of supply chains do use when there's like a sub a chief supply chain officer in a larger company, they have departments that model their supply chain so they could look at scenarios of okay let's do this let's do that those though that kind of tool set is is incredible so but even if you're a small organization run by one person and you have five people that work with you run a tabletop exercise or again if you have 50,000 people working for you those tabletop exercises it really ensures that everyone that's on the playing field, everyone that's on the bench everyone that's in the owner's luxury box Everybody knows what to do and who to contact when things go sideways, right? And then lastly is don't silo your security and resilience teams. So large entities, they tend to do that, right? So you'll have a GSOC, your global security operations center, where you've got the cool kids, like with the you know the NASA screens. That's great, right? And then sometimes in a very collaborative organization, they'll have people from they'll have governance software people, they'll have physical security, executive security, they'll have drone security, they'll have Intel people all all in the same room or representatives of those teams in the same room. But if you don't do that, if you silo your security teams, you're actually hurting yourself, you're hurting your intel and that's where you really need to collaborate. I don't have a military background, but I could tell you again, a lot of these discussions and And and it's it's if you were to take like a military like perspective of how you need to do it, it's again you want your your air force, your your you know, your guys on the ground, everybody to be able to to to know what's going on on the on the battlefield, you know where those choke points are, you know where the who's got the high ground, you need sometimes to go through the through the valley, that's the only way to get through or or charge up the mountain, right? So I think if you could start to just maybe learn from some people who were former military or or or executive leadership who have served that they really need to think strategically about how to collaborate and how to get through that that culture of non collaboration and make sure you're collaborating. Brian: that whole information sharing is key. Yeah. All right. Well, thank you, Tom, for coming on and and explaining things and and telling us, how what what a supply chain really is. Thomas A. Di Mascio: No, thank thanks for having me and you know, I'm I'm often sitting in in a room by myself talking about supply chains, but yeah, I'd love to talk to other people about how cool supply chain management and i is in the world. So thank you, sir. Brian: Right, well great. as always, thanks for tuning in today and a reminder that all of our podcasts are available on YouTube, Apple Podcasts, Spotify, and other services. And you can find those links to all the services and more at podcast.fern.com. I'm Brian McClare and this has been another episode of The Decision Advantage. Thanks for tuning in.