SUPPLY CHAIN SECURITY IS AN ONGOING AND EVER-EVOLVING PROCESS, requiring active risk mitigation and management. Discovering security-related trends, addressing them before they become a true risk, and dealing with unavoidable real-time situations effectively allows you to manage your supply chain’s security.
UNDERSTANDING EXACTLY WHAT’S AT RISK
Security breaches in your supply chain are destructive, and one moment can easily erase years of effort. The implications of an incident are extensive.
On the surface, these implications are complex, but in reality, they affect two main aspects of your business:
Theft and damaged products result in a direct hit on your business’ bottom line. The initial loss doesn’t even factor in the additional cost of replacing the products, which only further diminishes the bottom line. Each instance of a breach in security erodes profitability, results in long-term losses, and continues to increase already rising insurance premiums.
On top of impacting the bottom line, every security breach influences your company’s reputation. Poor customer experience and legal liability can often be even harder to recover from than more tangible bottom-line losses.
PHYSICAL SUPPLY CHAIN THREATS
Threats to supply chain logistics vary in severity and frequency by region and complexity. However, theft and pilferage remain all too common. While internally, you likely have concrete metrics about these types of events, it’s difficult to establish exact data on a global scale. Many, if not most, cargo thefts remain unreported outside of a company, so true numbers are tough to pinpoint.
BSI and TT Club have a comprehensive report for 2020 using data from 2019. In the complete report, they’ve broken down each region across the world. However, they have also compiled an overview of global cargo theft.
The report shows that trucks remain the most targeted part of the supply chain, accounting for 87 percent of all reported cargo theft incidents in 2019. The remaining thefts occurred in significantly lower rates from facilities, during sea transport, and other identified modalities. The majority — 76 percent — of all reported cargo thefts included the transport vehicle or its contents when in-transit or parked.
The threats to truck freight, both in-transit and parked, cannot be overstated — especially in North and South America.
ADDITIONAL SUPPLY CHAIN DISRUPTIONS SUCH AS THE GLOBAL COVID-19 PANDEMIC, continue to add strain and relative unpredictability into what thieves will target. Risk mitigation that purposefully protects against in-transit truck theft is necessary to protect your company’s bottom line and reputation. A solution that allows corrective action resolution for these specific pain points, in addition to helping digitize and optimize your supply chain is essential.
INTERNAL & THIRD-PARTY RISKS
Unfortunately, many security risks come from within, with employees and other third-party participants in the supply chain posing a threat.
Some basic methods to reduce these types of risks include comprehensive supply chain security operating procedures, risk-based audits, and due diligence of your entire network, including all subcontracted or outsourced activities. Employee background screening and tools to ensure the driver ID is captured at collection help to minimize risk.
Subcontracting activities are commonplace within logistics. This can be a cost-effective and optimal way to focus on core competencies while outsourcing other activities to third-parties. The best practice for this is to have an SLA (Service Level Agreement) in place to define responsibilities and for shippers to decide if they allow outsourcing of activities using a risk-based approach. More often than not, most shippers would avoid the additional risk and want to know who is touching their cargo.
EXTERNAL RISKS
Although some regions are particularly vulnerable to hijacking, in many parts of the world, the most significant threat to freight continues to be when it’s left unattended or unsecured. Any time there is a large supply chain disruption or freight is being moved in areas with high levels of organized crime, your cargo is at risk.
The best ways to combat external risks are to be prepared with comprehensive procedures for all logistics processes and a real-time risk management solution that provides situational information about your freight’s location and condition.
DRIVER SHORTAGES
The recent COVID-19 pandemic highlighted the road transport industry as the backbone of the economy and the essential role it plays in people’s daily lives. Truck drivers are the industry’s key assets, moving goods where they need to be. Yet at the same time, the industry is facing a global shortage of truck drivers. This is due to a multitude of reasons and the industry is addressing these proactively while simultaneously trying to encourage more diversity. Age restrictions on interstate licenses, expensive training, long shifts away from home, and conditions while on the road are an issue.
While a truck driver shortage in itself isn’t a security risk, the greater potential for drivers to be inexperienced increases security concerns. Inadvertently, inexperienced drivers can cause serious threats like poor adherence to protocols, unsanctioned stops, and route deviations, among others.
REST AREAS & RISK
Doubling-up drivers are often not possible due to shortages and the added expense. This results in single drivers on long journeys needing to take rest breaks to comply with set driving hour regulations. At this stage in the journey, freight is most at risk and increases the risk for the driver as well.
Rest areas vary across the globe in the standard of available facilities and security. Criminals have uncovered this fact. Drivers need to know when they leave their vehicle to use facilities where their truck and cargo is safe. Being able to leverage technology to lock a load at a specific location, be alerted if it moves, and for all shipment information to be sent directly to law enforcement for recovery in the event of theft, gives the driver an extra layer of protection and provides an automated resolution in an emergency.
EFFICIENCY THROUGH VISIBILITY
Truck drivers can spend an average of two to three hours waiting for their trucks to be loaded or unloaded -- time which they are typically not paid for. Using technology to streamline driver departure interviews, complete compliance checklists on mobile devices, as opposed to manual processes coupled with full cross-network visibility of arrival time and location, increases operational efficiency. Logistics optimization through digital supply chain platforms enables companies to reduce dwell time to use trucks and their drivers more efficiently.
EVALUATING SUPPLY CHAIN SECURITY & MITIGATING RISKS
Managing risk requires a proactive approach. By implementing set protocols and processes, and tracking behavior in real-time, you can minimize some of the largest risks threatening your supply chain.
Compiling data and then analyzing the following factors can provide an evaluation of your supply chain’s security and a strategy to mitigate further risk:
DRIVER COMPLIANCE
When using third-party logistics providers, you’re not always sure about who’s interacting with your freight and how. While frequent audits and established security vetting for your subcontractors are non-negotiable, they can still leave a gap for the day-to-day interactions that drivers and transportation carriers have with your cargo.
A way to measure compliance for every shipment is crucial to security. Appropriate digital and easily accessible documentation for each shipment helps to maintain trust with third-party individuals interacting with your freight. Digital driver departure interviews with a pre-departure checklist, electronic bills of lading, and electronic proof of delivery is a more efficient way to monitor driver compliance and security, while also digitizing logistics processes for further operational efficiency.
ALERTS & DEVIATIONS
Protecting freight while it’s on the move is essential. By using IoT devices to help monitor deviations, such as door openings, light exposure, shock, etc., you’re able to get a sense of what’s going on in real-time and then actively work to reverse any threats to the cargo, such as tampering, pilferage, and theft.
RED ZONE STOPS
A red zone is defined as the first 200 miles from the point of origin. Truly, there should be no reason for a driver to stop inside that radius. However, they often do, and freight left parked in an unsecured location that often constitutes a red zone stop is particularly vulnerable. Monitoring red zone stops by drivers, and minimizing them will yield a higher level of security across your supply chain.
ROUTE DEVIATIONS
Often there are unavoidable circumstances such as weather that necessitate a route deviation. However, special situations need to be communicated effectively. Deviating from a set route can cause serious security concerns based on the region, so minimizing route deviations and proactively communicating any changes needs to become a priority.
CUSTOMS & POLICE STOPS
The amount and length of stops executed by customs authorities and the police affect delivery schedules. Collecting data on police and customs stops in your supply chain can help to uncover key insights into potential threats to both security, as well as logistics efficiency.
INVENTORY DISCREPANCIES
With a traditional paper BoL and PoD, inventory discrepancies are often uncovered too late to make any significant impact. By digitizing the collection of information in your supply chain, discrepancies can be identified instantly, and trends can be easily monitored to identify security threats.
ARRIVAL TIMES
Late arrivals are never a good sign. Yet, early arrivals can also be indicative of potential issues. Having real-time data on arrival times and the situational circumstances surrounding each instance can reveal patterns and expose security concerns, as well as operational inefficiencies.
THEFT RESPONSE
Although the best way to protect your supply chain is through prevention, there will always be the need to have quick reactive measures in place. What are your current protocols?
With tracked data points and real-time visibility, it’s possible to provide law enforcement with the essential information they need immediately to begin recovery.
GLOBAL SECURITY OPERATIONS CENTER (GSOC) — THE CONTROL TOWER CONCEPT DIGITIZED
As supply chains become more complex, and the risk of theft increases, shippers have to balance operational efficiencies, compliance, and risk, while attempting to reduce cost. GSOCs have traditionally been a labor-intensive and resource-heavy way to monitor global shipments in transit. While they are effective, they rely upon human decision-making which can be problematic, especially if multiple incidents are happening and easily allowing a more serious incident to be missed.
Digital supply chain platforms enable nonconformities to be categorized by a risk matrix and allocated as high, medium, or low priority depending upon the shipper’s standard of care. Pushing corrective actions for
resolution in real-time creates a more efficient GSOC, allowing individuals monitoring to act on the most critical information. This enables resources to be focused on the right areas, ultimately resulting in a cost reduction.
Aggregation of data into a single unified view with a dashboard specifically tailored to the user’s needs offers a proactive, autonomous, and lean global risk management control tower.
REDEFINING SECURITY WITH DIGITALIZATION, REAL-TIME VISIBILITY & PROACTIVE ALERTS
Digitizing the supply chain plays an essential role in all aspects of the organization. The data that’s gathered and if done right — is all in one place -- reveals insights that can otherwise be entirely overlooked.
To redefine your supply chain security, embracing digitalization, real-time visibility, and a solution that provides proactive alerts for risk mitigation will help protect what matters. A platform that connects all data sources within your supply chain to optimize its security with tangible metrics and actionable information allows you to succeed in your goals and accurately report the savings to stakeholders in your organization.
