July 12, a new research paper from the Center on Sanctions and Illicit Finance has a bold idea – harness the power of the idea behind the digital currency Bitcoin to help the Department of Defense better track the contents of its enormous supply chain. The paper's authors, Dr. Michael Hsieh and Dr. Smantha Ravich, think this is not only possible but propose steps the DoD can take to use such technology today.
According to the report, “Cyber-enabled economic warfare is not limited to the use of digital networks…An emerging national security challenge related to the globalization of manufacturing supply chains is the phenomenon of attacks in which substandard, counterfeit, or maliciously-modified electronic components are introduced into the hardware.”
These increasing attacks pose several challenges to the U.S. defense industrial base, but first and foremost is that emerging problems can hide in a “sea of transactional data.” Information on everything, from where the product was assembled to where its parts originated, offers opportunities for nefarious actors to hide their intent.
For example, the Semiconductor Industry Association estimated that in 2013 “as many as 15 percent of all spare and replacement parts purchased by the Pentagon are counterfeit.” Each counterfeit part introduces the opportunity to infiltrate the U.S. supply chain with parts that are either defective or include malicious software, thus undermining the readiness of the system.
Compounding the issue of information overload is that fact that according to a 2017 Defense Science Board report, approximately 70 percent of the electronics in a weapon system, subject to the typical DoD acquisition process, are “obsolete or no longer in production prior to the system fielding.” The report also asserts that the DoD’s ability to track inventory obsolescence and vulnerabilities are inadequate.
According to the research study, this is where the technology behind Bitcoin becomes helpful.
Often referred to simply as Blockchain, this technology creates a fully auditable chain of events surrounding a single element in a given inventory. Every transaction of every element is recorded in a time-stamped ledger that is re-verified as part of the next transaction.
For example, if one were to include a bit of thermally insulated wire in the construction of an F-35 A engine, the current lifespan of said wire would be available from its creation to the moment it is soldered to the engine component. If a nefarious agent had tried to introduce counterfeit wire into the supply chain, it would become instantly known.
While this example is limited, the idea of the Blockchain can be expanded to include larger transactions such as those that exist between a prime contractor and any subcontractors.
Required fields marked with *
Please note that you should expect to receive a response from our team, regarding your inquiry, within 2 business days.