For decades, a company’s supply chain was simply the process of sourcing, manufacturing and moving goods from Point A to Point B as quickly and efficiently as possible. This “means to an end” approach viewed the supply chain as little more than an operational necessity for every company rather than the asset it truly is.
A smartly designed and strategic supply chain approach is “one of the most important yet underappreciated sources of competitive advantage that companies can capitalize on,” says consulting firm Frost & Sullivan. Before a supply chain can reach its true value-added potential, however, it must be secured.
Approaches for securing the global supply chain — and the individual companies in it — vary widely and are constantly changing as the nature of the threats evolve and technology advances. Here I’ll cover four opportunities, trends and “must-do” best practices to ensure your company’s supply chain is secure today and in the future.
Get the foundational elements right, then build
When we think about securing our family, home and personal possessions, we start with the basics and work up from there: a good strong deadbolt on the door and locks on the windows, smoke and carbon monoxide detectors. After that, motion-activated lighting and perhaps an alarm system connected to the local police and fire departments. No home security expert would suggest securing your home with an alarm system but not locks. The supply chain is no different.
In the world of supply chain security, the basics are simple but should sound familiar if you follow the analogy above. Is the facility manufacturing and warehousing outfitted with proper security systems, alarms and personnel? Do they have proper insurance? Does the neighborhood have a low crime rate? Are your goods driving on the safest streets while en route to a destination? You’d be surprised how often companies don’t pay attention to these “little” things and end up in a bind as a result.
Once these basic elements are strongly established, however, you have the solid foundation needed to build a reliable supply chain security strategy.
Strengthen your defense
According to the FBI, cargo theft poses “a real and rising threat to our country’s economy and national security. [Since 2005], the groups involved in this crime have become better organized and more violent…and the price tag associated with the thefts is increasing.” Cargo theft cost a reported $23 billion USD in in 2014 globally and the FBI began collecting and reporting data on the problem this year.
And though we’ll collectively make progress against these figures by building the stronger foundation discussed above, we’ll do better by thinking critically about protecting your cargo. Work with transportation partners and security consultants who can help you assess the safety of your supply chain, from the routes your products travel along to the places vehicles stop regularly. Think critically about the possible weaknesses in your system and test them regularly to make sure your defenses hold up.
Get C-TPAT certified (and work with those who are) to save time, money and stress
Customs-Trade Partnership Against Terrorism (C-TPAT) is a joint initiative between U.S. Customs and Border Protection (CBP) and participating businesses. Since its inception in 2001, the C-TPAT program has welcomed “more than 10,000 certified partners that span the gamut of the trade community. These 10,000‐plus companies account for over 50 percent (by value) of what is imported into the United States,” according to the CBP.
This certification program focuses heavily on the security of our nation’s import/export ecosystem, all of which directly impacts your individual supply chain. Getting your own manufacturing supply chain C-TPAT certified and working with suppliers and logistics providers who are also verified will significantly speed your transit times and eliminate unnecessary delays.
Know the data, use the data
Sometimes the security of your supply chain isn’t about the most obvious, attention-grabbing risks such as theft. Consider the case of Par Pharmaceutical, which manufactures and distributes Schedule II narcotics. For them, security goes beyond chain of custody to include temperature control and data logging. In instances like this, tracking where a shipment has been physically simply isn’t enough data.
Advancements in sensor-based technologies allow companies such as Par Pharmaceuticals and others to monitor, track and ensure shipments are maintained within precise temperature ranges. Smart senor data available from systems such as SenseAware powered by FedEx can do so much more where security is concerned, however. With these next-generation sensor devices, you can monitor shipments in real time to know if items have been roughly handled, exposed to light, deviated from a pre-approved and geo-fenced route and much more.
Armed with this data, manufacturers and supply chain managers can be infinitely smarter about the opportunities available to move the supply chain from a mere “cost of doing business” into a true business building differentiator at their company.
Start with the basics: build a strong, reliable foundation of supply chain security practices that are routinely reviewed, tested and updated. From there, add the features and services, insightful data and alliances that position any supply chain as the true value-add it has the potential to be across every sector in our economy.
About the Author: Chris Swearingen is Marketing Manager for SenseAware, powered by FedEx. Learn more at www.senseaware.com.