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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.

To take advantage of these programs, business processes often require revamp, experts say. "You'll have to reengineer your processes to align with security. Otherwise, you won't get any return on your investment," says Regen.

A simple example: container seals. Traditionally, the seal's job was to indicate clearly if a box had been tampered with. But far too often, people at various stages of the supply chain either ignore the seal altogether or rubber-stamp the paperwork, says Michael Wolfe of the transportation and logistics division at North River Consulting Group. There are several process-centric ways to deal with that probleminstituting inspections to beef up accountability, for example. Wolfe likes a different option: electronic container seals that "take people out of the loop; the seal sends electronic information about itself automatically." That's a process change that enhances security and also reduces cost, time and human error.

The trade-off, of course, is that technology can present a steep initial investment hurdle. According to a report from analyst firm IDC (sponsored by Unisys), early adopters of "safe commerce" spend an average of $3.7 million on everything from contingency planning systems and managed security services to secure access control systems and radio frequency identification (RFID) technology.

Boost Visibility

The "24-hour rule" is another CBP program that illustrates the confluent interests of business and security. Last year, CBP began requiring U.S. importers to provide information on the contents of containerized goods 24 hours before the goods were loaded onto ships in foreign ports. Supply chain executives were leery of adding an extra layer of data collection onto their normal processes, even with the promise of getting through customs faster.

"There was lots of wailing about the cost and difficulty," says Wolfe. "A year later, senior executives have told me this has worked out really well; having complete information 24 hours in advance forces them to load more efficiently and effectively."

Having visibility of the product or shipment throughout the supply chain is an important security component, says Dick Germer, global security manager for UPS Supply Chain Solutions, in Atlanta. "We can 'see' the goods from point of origin to final destination. We can react more quickly if there is a delay."

For many companies, knowing the answer to three simple questions would be a step in the right direction: What's in each boxtruck or train? How fast is it going? And how much is being lost each year to cargo theft? The aforementioned food industry CSO verifies that even at Fortune 500 companies, lost data is often not captured adequately. "One of the problems we face is that there's no historical data on what we've been losing," he says. "Now that we're being aggressive about tracking it, we're finding we've been losing a lot more than previously realized."