Best Practices in Supply Chain Security
According to Louis Tyska, CPP in Lawrence J. Fennelly’s Handbook of Loss Prevention and Crime Prevention, Third Edition, “finished goods, componentry, and raw materials are most attractive and vulnerable to theft or misappropriation when in storage, in inventory or in transit.” Unfortunately, these are precisely the points in time during the supply chain life cycle in which they are least controlled. Moreover, these different commodities (raw materials, componentry and finished goods) and the varying points in the supply chain life cycle (storage, inventory and in transit) each present different risks and therefore require unique security solutions to mitigate the transitioning risk as the commodity moves through the supply chain process. Attempting to utilize a security methodology recommended for raw materials in storage to a finished product in transit will undoubtedly leave you disappointed. It should be clear that the storage of raw materials, goods and products being manufactured and/or stored and finished products being shipped to customers over the road, each have their own risk profile, and as a result, their own security needs. For example, properly securing a large warehouse containing millions of dollars of manufactured, finished pharmaceutical products have different exposures, and therefore should have different security features, than even those for the same manufactured pharmaceutical products once they are shipped over the road. As the exposure and risk for the commodity transitions so to should the security features employed to mitigate the risk. As such, security can and should play a significant role throughout the supply chain life cycle; raw materials in transit and storage, manufacturing and warehouse operations, finished products in inventory, finished products in transit over the road, as well as returns.
Every manufacturer and distributor, regardless of size or industry, shares the above challenges and perhaps others. Additional concerns can range from the safe arrival of parts and raw materials, secure manufacturing processes to protecting against theft and accidents and the reliable delivery of finished goods to ensure customer satisfaction. Manufacturing and distribution companies have a lot to consider when it comes to security. Not only do they have to think about securing the commodities that formulate the finished products, but also the people working in the facility and over the road, their customer and employee information, financial records, product information/trade secrets, and much more. For manufacturers and distributors, or companies managing both, properly protecting the supply chain means safeguarding materials, information, personnel, products and reputations throughout the supply chain life cycle, i.e., “cradle to grave.”
From small businesses to enterprise organizations, there are industry-leading security solutions which provide appropriate security for manufacturing and transportation operations as well as enhanced information management and reporting capabilities. Integrated security solutions include a variety of alarm, intrusion detection, access control, and surveillance systems for manufacturing facilities along with the appropriate management tools. Value-added services include around-the-clock security monitoring of critical manufacturing conditions such as temperature and humidity, as well as remote management tools that let you perform remote video surveillance on any smartphone or tablet. Not to mention the physical and technical security modalities which are the backbone of any sound security program.
An organization may take all of the appropriate precautions to safeguard their employees and products in house, but who are they entrusting to deliver their products to clients and customers. A lost or hijacked truckload of a company’s products can have an extremely negative impact on any business, its reputation and the trustworthiness of the product lost or stolen. All of which are entirely avoidable when the proper care and concern is taken through the implementation and management of a robust supply chain security program. Through the implementation of policies and procedures, the use of technology and partnership with industry leading global logistics security services companies, and public sector entities (CTPAT), or a combination thereof, an organization’s supply chain security program can be significantly enhanced in an effort to minimize the aforementioned losses.
Becoming well versed in the Customs Trade Partnership Against Terrorism (CTPAT) initiative and collaborating with public sector entities to enhance an organization’s supply chain security program may add a great deal of value and peace of mind. CTPAT is a voluntary public-private sector partnership program which recognizes that the U.S. Customs and Border Protection (CBP) can provide the highest level of cargo security only through close cooperation with the principle stakeholders of the international supply chain such as importers, carriers, consolidators, licensed customs brokers, and manufacturers. The Security and Accountability for Every Port Act of 2006 provided a statutory framework for the CTPAT program and imposed strict program oversight requirements. CTPAT is but one layer in CBP’s multi-layered cargo enforcement strategy. Through this program, CBP works with the trade community to strengthen international supply chains and improve United States border security.
In summary, the appropriate application of physical, technical and procedural security can go a long way to properly secure an organization’s supply chain throughout the commodities varying forms and stages. That said, as the commodity’s exposure and risk changes as it progresses through the supply chain so to should the security features employed to adequately mitigate the transitioning risk.