Supply Chain Security Today
- Written by Andrew R. Thomas
The global supply chain encompasses all the links connecting a manufacturer to the end users of its products. These links may take the form of manufacturing plants, supplier warehouses, vendor facilities, ports or hubs, retail warehouses or facilities, and outbound shipping centers. They also implicate all the methods and mechanisms by which goods are transported: trucks, ships, airplanes, or railcars. Since the inception of transportation networks, security has continuously played a role, albeit mostly a tertiary one, in the planning and execution of increased efficiencies and cost reduction.
On September 12, 2001, leaders of organizations the world over woke up to a new set of realities, more formidable and unexpected than they had ever faced. Some of the realities were subtle and even necessary: government agencies increasingly scrutinized the content of telecommunications and financial transactions.
Others were stark and in-your-face: mindnumbing security lines at airports and new import/export regulations. In spite of those traumatizing events, the global economy continued to grow with even more goods, services, and people moving through the global supply chain, increasing the necessity for better understanding and security.
As the post-9/11 era is evolving, it is clear that this newly acquired friction will be part of the new supply chain reality. Organizations that had been accustomed to a steady devolution of the non-revenue-generating aspects of their enterprise like security were now thrust into the need to somehow deal with these realities. And, while the 9/11 attacks were undoubtedly a dramatic event, they also brought security to the forefront.
When trying to secure something as vast and dynamic as the global supply chain, a lot can go wrong, including systematic mismanagement and inefficiency, criminal activity, or terrorism – to name just a few. On the other side of the ledger, government regulation, industry or association oversight, and security agencies – both public and private – remind us that there is just too much at stake to let problems languish or stagnate. It is estimated, for example, that thieves now steal $100 billion in goods each year from various points along the supply chain. What’s more, problems grow in magnitude when goods cross national borders, as they do with increasing frequency in the global economy.
Meanwhile, governments continue to expand security mandates deeper into global supply chains. This continues to alter the ways supply chain security is viewed by policymakers, industry, and researchers around the world. Protecting the physical infrastructure of the supply chain – along with cargo, passengers, and personnel – is now held as both a national security priority and organizational necessity.
Melding two very different objectives – security for the nation and efficiency for stakeholders – poses a new challenge to those who seek to understand the changing dynamics of the global supply chain. New governmental method mandates and compliance requirements for supply chain security must become a priority for all firms, whether they agree with it or not.
Stricter security regimes, the threat of terrorism, and increasingly sophisticated criminal activity have made cross-border cargo movements more complex, putting the integrity of supply chains at much greater risk. As an executive from a global electronics manufacturer that operates in more than 150 countries put it recently, “We can have the most incredible manufacturing, but without effective global supply chain security, our products die as soon as they hit the border.”
Furthermore, in the hypersensitive media obsessed world of today, international and even domestic terrorists recognize the impact an attack against the global supply chain can have. As a result, much of the action around global supply chain security is being driven by the actions of those who seek to harm the system. These individuals and groups have shown remarkable resilience and no sign of backing away from the multiple targets of opportunity they perceive that the supply chain provides them.