Vulnerabilities and Threats Analysis Assignment Description (100 points)
Purpose: practical application of risk analysis techniques and other
class material to organizational reality, understanding a company’s
risks/vulnerabilities, as well as ways to address them.
Goal: develop and present in your written submission a thorough analysis
of an organization’s vulnerabilities and threats as if you were their
Crisis Communication Manager and will be sharing this document with the
top management.
Specifically, you will need to demonstrate your ability
to:
1. independently research an organization;
2. show solid understanding of a wide spectrum of different kinds of
crisis (e.g. crisis of physical environment, human climate and
management failures);
3. identify the organization’s weaknesses that could develop into crises (i.e. vulnerabilities);
4. synthesize terminology and concepts from previous chapters and lectures;
5. apply the course terminology to the organization of your choice;
6. present your analysis in a professional and credible format.
Grade: To see how you will be graded, please go to Vulnerabilities and
Threats Analysis Rubric (Canvas → Course Modules → Week 7).
Structure:
- Introduction.Start with a brief Introduction where you need to
provide a concise but sufficient description of the organization. Here
you will need to achieve 4 goals: orient the top management of your
organization to the purpose of this analysis, briefly describe the
importance of the vulnerabilities and threats analysis (for example, you
can provide statistics on or examples of organizations that failed at
crisis management although their vulnerabilities could have been easily
predicted); define basic terminology you will be using later in the
analysis; and make a transition to the next section. In this transition
statement, you can broadly introduce the major areas of concern for this
organization and mention that you suggest a set of crisis prevention
measures. The Introduction is a great place to incorporate any material
from the course book or lectures that you consider pertinent to this
organization. - Vulnerabilities/threats.Present your vulnerabilities and threats
analysis in a clear and easy to read format. Executives are always
extremely busy, so your goal here is to help them save time reading your
analysis. You can use any format in this part (numbers, bullet points,
table, etc.) that you find effective.a. Do’s: organize clearly, use headings, highlighting, underlining
and/or color to attract attention to the most critical information;
think of words as gold dust – each word is precious, so use them
sparingly; make it look professional and polished. Dont’s: do not write
this part as a college essay.b. Categorize risks as high, moderate, low.
c. For each risk, provide at least one trigger and one impact.
d. Provide support for each and every risk that is marked as “high.”
Here you need to explain why you think a certain risk is high: e.g.
statistics, previous incidents at this organization, etc. Basically,
persuade the top management that, at the very least, they need to take
these risks very seriously. - Crisis prevention measures:select one most acute
vulnerability/threat and outline a set of crisis prevention measures
(with a focus on communication measures). - Reference List in the APA referencing format.Note on Citations: Be sure to make references to the course book,
lectures, and any other sources you use in this analysis. All sources
will need to be referenced in APA. Here is the link I will be using to
evaluate your APA citations
https://owl.english.purdue.edu/owl/resource/560/01/ For citing lectures,
please follow the guidelines here:
http://blog.apastyle.org/apastyle/2012/11/how-to-cite-a-class-in-apa-style.html
Vulnerabilities And Threats Analysis
1.Introduction
DHL Supply chain, a firm operating under the umbrella company DPDHL, ranks as a leading contract logistics provider. The company offers various logistics services for products such as automotive and chemicals across national boundaries (“About us”, n.d.). Over the years, the DHL Supply chain has gained a significant market share in the contract logistics sector due to its knowledge of the market dynamics, high standards of operations, and information technology adoption that adds value to clients. Despite its outstanding services, DHL remains susceptible to risks and threats associated with the logistics industry, whose occurrence can have wide-ranging implications in the supply chains of several organizations globally.
Therefore, this analysis aims to identify and assess risks that could adversely affect DHL’s success and propose a way forward. The process of vulnerability and threat analysis is vital because it will help reduce the chances of threats occurring in the company by identifying and mitigating them in advance. It is worth noting that several companies, such as Toyota, suffered severe crises in the past for failure to conduct a risk assessment on their operations, which led to significant financial losses. DHL can avoid similar repercussions by addressing areas of concern such as political threats, natural disasters, and cyberthreats and adopting a set of crisis prevention measures such as having a response team and educating its employees about cyberspace principles.
Definitions of Basic terminologies
- Vulnerability is the diminished ability of a firm to cope and recover from a hazard.
- Risk is the potential loss in a company resulting from the exploitation of the latter’s vulnerability.
- A threat is anything that can adequately exploit a company’s vulnerability and cause damage either intentionally or inadvertently.
2.Vulnerabilities/ Threats
- Political disruptions
Political disruptions are a significant risk that is likely to affect the success of DHL Supply Chain. As noted by scholars, political upheavals can adversely affect the supply chain performance, as has been the case in Pakistan (Asif et al., 2019). Political disruptions may take different forms, including politically instigated violence and riots and changes in international governments’ compliance requirements. In this context, political disorders such as politically-motivated violence can make some regions unsafe for transportation activities, thus adversely affecting DHL’s logistics operations. Furthermore, changes in compliance requirements can increase trade risks, whereby DHL may not be allowed to cross certain regions without full compliance with newly established rules.
Risk Category
The political risks that are likely to face DHL Supply Chain fall under the moderate category. This risk value is garnered from the consequence and likelihood of the risk occurring. The chances of political risks arising are relatively low in compliance requirements due to the existing trade agreements among countries. The majority of the countries today allow cross-border trade, which helps promote logistic operations. However, if political risks occur, they may have far-reaching adverse effects on DHL’s operations and global organizations’ supply chain that rely on the firm’s services. The political risks can be acceptable in DHL, but the risk must be re-evaluated to determine the necessity of instituting measures.
Trigger and Impact
Multiple factors, including intergovernmental clashes, may trigger political risks in the logistics sector. This aspect is evidenced by the ongoing U.S.-China trade war that significantly affects trade and logistics. Most notably, the impact of this political risk would involve the reshaping of the logistics industry. For example, Saka (2019) notes that the U.S.-China trade war is likely to lead to smaller orders with increased numbers of shipments to more locations, countries, and cities, as importers and exporters diversify their sourcing locations to avoid the lethal mistake of single-source purchases. This shift in practice can adversely affect DHL’s operations by reducing its economies of scale associated with transporting several orders in a single freight.
- Natural disasters
Natural events such as floods and typhoons are also a significant threat to DHL’s operations. Altay and Ramirez noted that firms should consider natural disasters in their risk management because it affects the logistics infrastructure, interrupting goods’ flow (cited by Miguel et al., 2015). Natural events present a significant risk to DHL because of its operations, which increases its vulnerability to the risk. Most notably, DHL’s logistics activities are mainly dependent on the available infrastructure. Hence, the destruction of the infrastructure by natural events such as hurricanes can inhibit the company’s logistics operations.
Risk Category
Natural disasters may fall under the category of high risks based on their impact and probability of occurrence. Natural disasters associated with logistics, such as floods and hurricanes, have a high likelihood of occurring. This aspect is evidenced by the company’s report, which reveals that climate change in the recent years triggers a higher frequency of natural disasters and extreme weather events (“Top 10 supply chain risks”, 2019). Furthermore, studies reveal that the frequency of natural disasters recorded in the Emergency Events Database (EM-DAT) increased almost threefold from over 1,300 events in 1975-1984 to over 3,900 in 2005-2014 (Thomas & Lopez, 2015). These statistics suggest that DHL has a high chance of experiencing natural disasters during its operations. Furthermore, the impact of natural disasters is relatively high because it can cause delays in the flow of commodities and the destruction of goods in transit. The high-risk value associated with natural disasters is not acceptable, and thus, the firm must put in measures to mitigate the risk.
Trigger and Impact
The majority of natural disasters are caused by processes occurring within the earth’s surface; thus, they may be beyond an organization’s control. However, natural disasters can also be caused by social factors such as irresponsible land-use, which may lead to the emission of GHG gases, destruction of the ozone layer, and, ultimately, natural disasters such as floods and typhoons.
Natural disasters may have a detrimental impact on DHL’s operations and the overall supply chain of organizations. For example, prior research reveals that the 2010-11 flooding event in Queensland significantly disrupted all transport modes, including road, air, and sea, creating severe disruptions to the supply chains and preventing numerous cities and towns from being resupplied (Wisetjindawat et al., 2017). This historical event exemplifies the adverse impacts that natural disasters may have on the company, such as disrupting transportation and increasing the transit time due to the lack of passable roads. Furthermore, natural disasters may increase the company’s operational expenses due to increased fuel costs as drivers seek alternative and often longer routes to delivery goods. Besides, transportation disruptions may lengthen the drivers’ on-duty time, thus increasing the company’s operational costs.
- Cyberattacks
Cyberattacks can also disrupt DHL’s activities, and, in worse case scenarios, cripple the firm’s logistics operations. This premise is evidenced by historical incidents of cyber threats that paralyzed an international logistics company’s operation. In 2017, a NotPetya malware attacked A.P.Moller-Maersk operating system, blocking its access to its electronic booking system and forcing a 10-day overhaul of the firm’s entire infrastructure (“A 5-step guide”, 2019). As a company whose systems are digitally networked, DHL may also be vulnerable to cyberattacks that may cripple its operations and disrupt the supply chain.
Risk Category
The company can categorize cyberattacks as high risks due to their increased chances of occurring and massive impact on firms. As evidenced by prior research, 69% of 20,000 people interviewed across 24 countries reported having been cyberattacks victims in their lifetime (Jang-Jaccard & Nepal, 2014). Cyberattacks on firms have also grown exponentially, probably because of businesses’ high dependency on internet technology solutions.
The impact of cyberattacks is also significantly high on a firm’s operations. For example, it is estimated that cyberattacks cost US$114 billion per year, and up to US$385 billion when the time lost by companies trying to recover from the attacks is accounted for (Jang-Jaccard & Nepal, 2014). The high financial and operational impact associated with cyberattacks accounts for the risk’s high- value level. Given the high-risk value of cyberthreats, DHL needs to establish measures to mitigate the risk and avoid its associated outcomes.
Trigger and Impact
The primary triggers of cyberattacks on firms such as DHL are advancement in technology. As noted by Jang-Jaccard and Nepal (2014), “the exponential growth of the Internet interconnections had led to significant growth of cyber-attack incidents” (p.973). The advancement and continued growth of the information systems provide room for the breeding of cybercrimes committed against logistics companies highly dependent on emerging technologies.
Unfortunately, the impact of cyberattacks can be grievous and disastrous to DHL. The threat can cripple the company’s operations and expose clients’ information to malicious parties. Furthermore, cyberattacks can subject DHL to financial losses associated with the time lost trying to recover from the attack and to the costs of restoring its cyberspace. Besides, DHL may incur financial losses related to paying hackers to retrieve their data, as has been the case in several companies.
3.Crisis Prevention Measures
All the outlined threats may have adverse effects on DHL’s operations, although some, such as political threats and natural disasters, are beyond the company’s control. However, the firm can mitigate cyberattacks, which are categorized as high risks threats, by establishing effective preventive measures.
One of the most appropriate crisis prevention measures for cyberattacks in DHL would be establishing a company committee devoted to spotting and reporting the risk. Arguably, having a group of people working primarily on the issue can help DHL detect and prevent cyberattacks before they affect the company. Besides, setting aside a committee to work on cyber security matters would ensure that they dedicate their undivided attention to the issue, have adequate knowledge of governance measures for cyberattacks, and communicate potential cyber threats to the company’s employee once it is detected to ensure a collective and effective response.
Cyberthreats targeted to DHL can also be prevented through employee training. Most notably, training DHL employees about cyberspace principles can help enlighten them about the do’s and don’ts of cyberspace, such as avoiding clicking on emails from anonymous sources, often used for phishing and launching malware on a firm’s online system. Training would also help equip employees with the required knowledge in cyber security and prevent cyberattacks’ risks.
References
“A 5-step guide to managing cyber threats in the supply chain” (2019, February 12). DHL. https://lot.dhl.com/a-5-step-guide-to-managing-cyber-threats-in-the-supply-chain/
“About us” (n.d.). DHL. https://www.dhl.com/global-en/home/our-divisions/supply-chain/about-dhl-supply-chain.html
“Top 10 supply chain risks to watch out for in 2019” (2019, March 25). DHL. https://lot.dhl.com/top-10-supply-chain-risks-to-watch-out-for-in-2019/
Asif, M., Chhetri, P., & Padhye, R. (2019). Do political disruptions affect supply chain performance? A qualitative case study of the textile supply chain in Pakistan. Journal of International Logistics and Trade, 17(3), 77-88. https://doi.org/10.24006/jilt.2019.17.3.002
Jang-Jaccard, J., & Nepal, S. (2014). A survey of emerging threats in cybersecurity. Journal of Computer and System Sciences, 80(5), 973-993. https://doi.org/10.1016/j.jcss.2014.02.005
Miguel, P.L.S., Brito, R.P., & Pereira, S. (2015). Natural disasters and their impacts on supply chains. Conference Paper. https://www.researchgate.net/publication/275210118_Natural_disasters_and_their_impacts_on_supply_chains
Saka, S. (2019, September 30). Four ways the U.S.-China trade war may affect shipping and logistics in 2020. Forbes. https://www.forbes.com/sites/forbestechcouncil/2019/09/30/four-ways-the-u-s-china-trade-war-may-affect-shipping-and-logistics-in-2020/#5d03069973b6
Thomas, V., & Lopez, R. (2015). Global increase in climate-related disasters. ADB Economics Working Paper Series, No.466. https://www.adb.org/sites/default/files/publication/176899/ewp-466.pdf
Wisetjindawat, W., Burke, M.I., & Fujita, M. (2017). Analyzing impacts of natural disasters on logistics activities: Flood risks and petroleum fuels in Queensland, Australia. Transportation Research Procedia, 25(2017), 1198-1212. https://doi.org/10.1016/j.trpro.2017.05.138
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