06 Mar 2024

2024 U.S. Personal Data Order: Impact on Supply Chain

With the recent bill passed by the US government on its citizen’s limited data accessibility to countries of some risks, supply chain operations are at the cornerstone of foreseeable challenge.

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Customized experience.

The term alone harnesses a company’s future and how well its offerings and services are attuned to it. An organization funnels a lot of capital in ensuring customer retention is always at its peak. From putting the complete focus on logistics operations and ensuring timely delivery of the order to accounting for the reverse transaction (returns and reorder of the consignment) – metrics are well defined to SCM and the process’s stakeholders involved. However, all of the user experience and how a target group will react to the company's services is generated from the data gathered by the organization. Think of it from an e-commerce point of view. Conglomerates from Amazon to Flipkart gather their userbase details, which covers identity (Name, gender, phone, etc.), engagement (CTR, bounce rates, conversions, etc.) and behavioral patterns (purchase history, abandoned shopping carts, session duration, etc.), to adapt to the best of their ability to deliver the ultimate user experience. All this customization has one key element attached to it: to what degree is the user’s information available to an enterprise?

With data being a prized asset equal to the levels of oil, it is indeed no wonder that authorities are now keeping a close check on to what degree the conglomerates are utilizing the information, or in fact, in some cases, exploiting it for their gains. A sentiment that recently found more voice with the US putting restrictions on personal data usage in the supply chain. The executive order is designed to limit the transfer of personal facts of US demography to certain countries on grounds of safety. While the government has mentioned the law isn’t intended to impact international trade, it is understood that the limitation of insights will have a somewhat domino effect on how businesses operate, the technology at play, and the consumer experience.

Which brings us to the question which needs addressing. How does data security play itself out in value chain logistics, and why is it essential?

Table of Contents

How is data at security risk in the supply chain industry?

Almost every function churns out vast sets of information daily, and these repository, when left unsecured, can be problematic for the company. The importance of data security stems from the fact that from every logistic application to the IoT device involved, there are streams of intelligence running concurrently, highlighting the over-reliance on information and its timely usage. Since logistics functions require real-time feed for tracking devices onboard, the tech at work remains equally vulnerable to disruptions and possible theft.

How is data handled in the supply chain?

To understand the implications of the recent order by the US govt., let us first put the spotlight on how data and its safety are handled in the value chain industry.

When SCM designs the security framework for information and its usage, there are three vital components that are kept in mind. These are data confidentiality, integrity, and availability. An IT section of an organization ensures that whatever laws are being applied adhere to the pillars mentioned above as it helps prevent unauthorized access, transfer of sensitive info, and any unwarranted changes. However, when it comes to constant monitoring and daily utilization, quite a few measures have to be kept in mind for efficient usage and utmost compliance.

Data handling in the supply chain
  • Access Level: A dashboard covers working information for crucial decisions. Thus, the IT framework must have policies that restrict any physical or digital media access to the repository. Companies should also implement level-based access for employees, so it remains certain that not all info is available to everyone.
  • Authentication: A verification step process is necessary for an organization to maintain the usage of data meant for the intended personnel.
  • Resilience: Data holds the present and the future of the organization. And such potential needs a robust resilience structure. This can be achieved through investment in data-centric software that is secure, scalable, and, more importantly, protects private information against all kinds of threats from erasure, corruption, and online attacks while keeping a backup in case of an anomaly.
  • Encryption: Leadership needs access to information on the go, which involves the utilization of remote devices. It's during these accessibility requests that Encryption can also turn out to be helpful. Without a verified key, the data will be represented in an unreadable format and act as a barrier for unwarranted usage.

The impact of the US govt. executive order on supply chain data

Now, with the management’s role defined, it brings us to the context of this write-up on how the limited transfer of US audience data will disrupt the global supply chain operations. While the subsequent impact will be visible in the time to come, leaders across the globe have analyzed the crucial pillars of value chain functioning that stand to be affected.

The impact of the US govt. executive order on supply chain data
  1. Increased Complexity in Data StorageWith restrictions on personal info being set by the US government, the first thing evident is that the organizations will now have to classify both the identity and personal data separately. With both being concurrent to each other, leadership will have to sort out the complexity that will come with information management and logistics of it, having a domino effect on the process's speed.
  2. Data Localization:With US cyber security firms keeping a closer look at their citizen's data usage by some countries of higher risks, it will become a challenge for MNCs that have their operations in the States to keep a separate repository. This will lead to information silos spread across different regions, making it difficult for a comprehensive overview of the supply chain.
  3. Delayed Collaboration:Data sharing will be impacted big time by the policy’s restrictions, eventually making it harder for enterprises to collaborate. This will be a more challenging aspect for partners and suppliers in different countries.
  4. Innovation:Loss of data is a loss of insight. Data analyses will receive the biggest hit with the United States' stand on information privacy. This will keep the SCM on a slight backfoot regarding the latest innovation and bringing the best services to their customers.
  5. Financial Impact:The US is one of the biggest economies in the world, with many foreign companies actively investing in its user base. The confinement of customer data then becomes an instant challenge for a company looking to make the most out of its investment, hindering their scalability prospects.

The change in the recent data law will surely push conglomerates to the avenues of adaptability. Leading to smart innovation, which, when backed, can be infinitely rewarding to the supply chain industry. All that now remains to be seen is how the industry aces the challenge on hand.

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