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How to Improve Supply Chain Security (The Trick Is to Keep It Moving)

Keeping products in motion is key to protecting your global supply chain. Far from dragging down the process, security initiatives help companies pick up the pace.

September 30, 2004 — CSO — It's a fact of life: once you release goods into a global supply chain, they're vulnerable. The longer it takes for them to reach their destination, the more opportunity there is for calamity or theft. Hence the old saw: "Freight at rest is freight at risk."

But mention "supply chain security" to some CEOs and COOs and they may groan, envisioning an interminable series of cargo inspections and paperwork examinations that strand products in vast dockside warehouses. In a world increasingly accustomed to just-in-time delivery, "your product can actually decline in price while it is sitting in port," says Dan Purtell, president of the supply chain security division for First Advantage, a global risk management firm.

Ken Wheatley, vice president of corporate security for Sony Electronics (a division of Sony Corp. of Japan), will admit that "some security measures inject time into the process because they add another handoff." But in general, according to Wheatley and other global logistics experts, supply chain security is one area where the CSO and the operations side of the house should be on the same page. The corollary to the old saw about freight is that the more efficiently goods move through the supply chain, the more secure they'll be.

Toward that end, here are seven best practices that help companies boost both speed and security.

Focus on Movement (Not Sheer Velocity)

Yes, speed itself can thrill. There's one nuance to that point, however. Wheatley cautions that focusing strictly on speed can be less securefor example, choosing an air route that's less secure rather than going via a low-risk freight line. "Constant movement (not velocity) is what's important," he says.

Sony Electronics' business model depends on just-in-time shipment of its highly desirable consumer electronics goods. But line-of-business managers understand some situations warrant taking a step back or pursuing an alternate course that could add some time. "If we're aware of something that might disrupt our supply chain, they're all ears," says Wheatley. In these matters, the security and operations teams have to collaborate to weigh risks and rewards.

Use Safety in Numbers

Peter Regen is a vice president at Unisys, which offers supply chain security services and technology. Unisys tracks more than 25,000 air, land and sea conveyances per day in 50 countries for the U.S. Department of Defense. Regen recounts that one client tried putting an armed guard at the front of its trucks in Latin America. This wasn't enough to stop roving bandits with machine guns. The client now moves its goods in that area via high-speed truck caravans.