How secure is your supply chain?

A supply chain is a chain of interconnected links that facilitate the movement of goods from primal producer to the final customer. This chain can be very short with only a few links and handoffs, or it can be lengthy and complex with many links and handoffs. To be truly effective in supply chain security, each link and handoff should be examined, understood, and protected.

Many security risks exist prior to goods entering the chain. Therefore at origin it should be clear what the customer expects and how you might be held liable. A handoff is the point of transfer to a service provider in the movement of the goods. This handoff is important as there is also an exchange of paperwork that address the material description & condition, manifests, packing list, invoices, etc. In particular the proof of delivery has a critical function in the supply chain, as it is used to track the movement, location, and condition of goods at any given time. In fact, this is the point where a good security program inspects the condition of the cargo and requires receivers to carefully document on the proof of delivery the condition of the goods.

Third party logistics service providers are often inserted into the supply chain, which can be a distribution centre or freight forwarder. A distribution centre operations need a customised security plan for the prevention of theft and infiltration during all handling and storage at this facility. Forwarding operations also require a unique security scheme, since the cargo is moving quickly and is handled by a number of people within the operation.

What are the elements that impact the supply chain?

There are many hands that touch the goods while it passes through the supply chain. Are any of these hands dirty? Securing the supply chain takes a full understanding of the chain and your position in the chain. You must be sure to align your security program to those interests. What is the security compliance and competency in the supply chain? What does the contract say regarding liability? What are the customer demands (both written and non-written)? What is the capability of supply chain partners from the perspective of security?

For a theft to occur three criteria must be met:  opportunity, ability, and desire or motive. Opportunity can be described as being at the right place at the right time. For example: no security present during change of shift. The ability would involve opening the door and removing the targeted goods. The desire or motive is the ‘why’. The desire for cash or the particular product drives the act. It is estimated that about 85% of all thefts involve insight information. Such information can include physical location of certain goods in a warehouse, the day-time-route of a transport of particular goods, timing and shifts of security guards, alarm system and alarm codes, closed-circuit television systems, etc.

It is critical to continually audit and review your security measures to ensure that your risks are minimised as well as having a contingency plan that allows you to respond prompt, aggressive and appropriate to an incident. From my experience self-assessments by companies are notoriously inaccurate. Therefore it is a better idea to have an independent supply chain security advisor to help you to audit as well as to develop a solid supply chain security program.