The Pager Blast Incident: A Wake-up Call for Supply Chain Tampering Risks

These vulnerabilities can disrupt the flow of goods, services, or information in a supply c­­­hain. The origin of these risks can be from various sources, including external events, operational inefficiencies, and technological failures.

Normally, in supply chain risk management, more weightage remains on upstream supply chain risk, which includes risk factors around vendor selection, supplier strategy, supply disruption, lead time and quality issues. While on the downstream side, the focus remains largely on fulfilment bottlenecks and demand risk. Along with these key risks, corporates include some strategies around the risk of spurious products, but tampering risk remains largely unattended.

Product tampering poses a serious threat to supply chains, potentially resulting in substantial financial, reputational, and operational damage. Such risk can take many forms, including contamination, sabotage, or the introduction of harmful substances or devices into products. Modern supply chains frequently cross multiple countries and include various intermediaries, complicating the monitoring of each stage. This complexity heightens the risk of tampering, particularly when security protocols are weak or inconsistently applied.

The recent pager explosions in Lebanon involved explosives being covertly planted inside pagers and walkie-talkies ordered by Hezbollah. According to reports, pagers seem to be modified during production or supply chain by way of inserting small amounts of explosives into them. Tampering was done in such a manner that the functioning of the device did not get impacted and kept on working normally. Post alteration, these devices were pushed into the normal supply chain targeted towards Lebanon. This ensured that users of these devices had no idea of the hidden danger in their equipment. Months after remaining dormant, they were remotely detonated, causing numerous casualties.  These pagers belonging to the Taiwanese brand, Gold Apollo, were not sold directly by this company to a Lebanese buyer. In this equation, a Hungary-based intermediate company, BAC Consulting, was also involved. Where this lapse took place is a matter of investigation for agencies, but it clearly indicates a gap in the end-to-end supply chain in cross-border trade leading to severe risk for the parent company.

For specific categories like pharmaceuticals and food, supply chain professionals are relatively more concerned about the safety and integrity of products, as these are more prone to adulteration and pose serious health risks leading to harm or fatalities. Especially in the case of cross-border trade of these categories, more precautions are taken due to stringent food and drug safety norms in developed countries. In India, comprehensive norms exist to minimise quality/efficacy drops in the food and pharmaceutical supply chains. Yet, the approach towards adherence to these norms is relatively weaker as compared to developed countries.

In order to mitigate the risk of tampering in the supply chain, professionals need to adopt certain initiatives and strategies which may be linked to packaging, track and trace, audit compliance, storage facility access control etc. The adoption of tamper-evident seals and packaging, which show visible signs of any tampering, is one of the packaging-related options. Similarly, the adoption of advanced tracking systems using technologies like GPS, IoT sensors, and RFID tags will allow real-time tracking of products as they move through the supply chain. As a result, any discrepancies or anomalies en route or while handling the goods can trigger alerts. Apart from technology and systems, the human factor plays a crucial role in supply chain management. So, training of supply chain workforce to detect and report signs of tampering will be very critical to avoid such risks. Incidents like the pager blast will lead to an increase in regulatory checks, especially in cross-border consignments.  In such situations, supply chain professionals need to work closely with government and regulatory agencies. Avoiding such risks might not be entirely possible. Instead, it’s all about how supply chain managers plan for proactive assessment and take necessary to plug the gaps in supply chain. In cases of exceptional or uncontrollable circumstances, supply chain leaders need to develop strategies to mitigate them and reduce their potential impact.