Operational Supply Chain

All Businesses rely on supply chains.

A supply chain is a network of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer, from raw material sourcing through purchase, sale, and delivery of the finished product to the end consumer.

The supply chain aims to optimize the flow and transformation of materials, information, and finances from procurement to customer delivery. Each component plays a critical role in efficiency, cost-effectiveness, and customer satisfaction across all industries.

What is the role of regulations in a supply chain?

Regulations are created by governments (national parliaments, EU Commission/Council/Parliament), regulatory agencies (FDA, EPA, SEC), and international bodies (UN, WTO, ISO).

Regulations in supply chains enforce compliance with laws on safety, labor, environment, data (e.g., GDPR), cybersecurity (e.g., CRA), and trade; mitigate risks, ensure ethical practices, standardize operations, and drive sustainability while increasing costs and complexity.

A conflict of interest exists between regulators and the regulated. Regulators prioritize public safety/protection, while companies prioritize profitability.

Regulators and companies have common interests.

Common interests include risk management, mitigation, and compliance. It is important to define and consider Regulations, policies, and requirements based on common needs.

What is the relationship between business operations and a supply chain?

Business operations are confidential or constrained, while a supply chain includes diverse users and data sets with varying levels of information confidentiality. Today's technology limits our ability to have flexible operations with flexible data sharing.

Business operations are designed to be confidential! Supply chains require flexible data sharing.

What is the relationship between supply chains and technology?

95% of industrial products built today incorporate software technology, driven by industrial integration across manufacturing, automation, and IoT; exceptions include basic mechanical goods such as simple tools or raw materials.

Technology makes our supply chains complex! The European Cyber Resilience Act (CRA) requires supply chains.

The CRA transforms supply chain security from optional to mandatory, raising industry standards and operational burdens but potentially increasing trustworthiness and market access for compliant organizations.

How do you define compliance and threat mitigation related to hardware and software?

The CRA (EU Cyber Resilience Act) mandates cybersecurity for digital products. It impacts conformity assessments, vulnerability reporting, CE marking delays, higher costs, and third-country supplier compliance.

Hardware Supply Chains' implementations are not designed to support software supply chains.

Hardware supply chains generally lack the features to deal with the diverse, loosely connected, and varied build requirements and dependencies of software. Hardware regulatory and compliance standards are completely different from those of software.

Physical vs Digital Products

Physical hardware is subject to different threat vectors than digital products. The CRA highlights the fact that 95+% of products are a combination of hardware and software, making supply chain management complex. This means you need to comply with both physical and digital regulatory issues. Product origin, including physical products, is required for compliance with social and juridical regulations.

Regulations and Compliance

A Digital Product Passport (DPP) is a structured digital record made mandatory by the European Union to enhance transparency, traceability, and sustainability in product supply chains across nearly all product categories. A Digital Product Passport serves as an authoritative, interoperable digital record that strengthens supply chain confidence, consumer trust, and organizational readiness for market and regulatory changes

Reliability, Transparency, Traceability, and Sustainability?

What was the origin of the materials in your product?

Consider microprocessor component traceability that requires one to track the origin, production, and distribution via serial numbers, batch codes, suppliers, and logistics to ensure compliance, authenticity, and defect management in supply chains.

Rethinking Supply Chains by Redefining Information Sharing!

Threats from foreign actors, sovereignty, competition, and the reliability of service have pushed traditional supply chains beyond their capacity to be relevant.

Is a Cloud solution the answer? No, because all prebuilt solutions lack flexibility, functionality, and secure sharing.
Is Blockchain the answer? No, because all prebuilt solutions lack flexibility, functionality, and secure sharing. Attestation is not enough.
Is Open Source Software the answer? No, because all prebuilt solutions lack flexibility, functionality, and secure sharing.

What are the core requirements for an operational supply chain?

A new universal supply chain must support:

The implementation of both physical and digital products.
We need a flexible common "ontology" standard with a universal definition for products, processes, actions, and information.
The need for small and large organizations to make and save money by implementing their own supply chains.
It must be easy to create reliable and accurate supply chains.
Individual information confidentiality is important for all participants in a supply chain, with the option to securely share information based on need.
This is accomplished through the use of distributed supply chain data, with the option to securely share information based on the owner's needs.
Threat mitigation through assurance and attestation of all captured and shared data.
Functional design or safety design ensures all processes meet rigorous standards during data creation to ensure all data is accurate and relevant. These standards are important for internal and external operations.
Document and information sharing (access control) must be verified, tracked, and reliable. Traceability for product origin requires the accumulation of large amounts of information while maintaining confidentiality, integrity, and attestations. Control of this process must be distributed to mitigate risk.
Standards to ensure the validity of operation, continuity of service, and trust across and between communities.
A standard requires an official standards body to evaluate, verify, and support the implementation and support of a standard. Multiple parties or groups are involved in the development and support of a standard.
Cross-domain information sets of different types of manufacturers (hardware, software, functional design), and information must be supported within a knowledge graph.
Knowledge graphs excel at representing rich, dynamic relationships and semantic meaning, which is critical for language-centric applications, while databases are optimized for structured, transactional data requiring high integrity and consistency.

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