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Cliff Holste

Supply Chain Digest
Material Handling Editor

Logistics News

Cliff Holste is Supply Chain Digest's Material Handling Editor. With more than 30 years experience in designing and implementing material handling and order picking systems in distribution, Holste has worked with dozens of large and smaller companies to improve distribution performance.

October 26, 2016

Logistics News : Managing Security Risks

At a Minimum Companies must be Protected against the Four most Common Security Threats


According to an Oct. 7, 2015 Forbes report, US retailers are losing $60 Billion a year to shrinkage. This is up from $40 Billion in 2013. Unfortunately, employee theft remains a top contributor to this problem. However, companies with a global reach must also pay close attention to the security of their supply chain as the frequency of cyber attacks abroad and domestically is increasing to the point where they are no longer news worthy.

The logistics security issue is broad in scope affecting both small and large companies as well as consumers who ultimately bear the cost. According to industry experts, a properly deployed security plan must address and protect the company against four common threats: theft, terrorism, piracy and physical disaster.

Holste Says...

Industry experts agree that supply chain security starts with an organization’s developing a security awareness culture.

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A comprehensive security plan includes the following:

  • Credentialing all personnel involved in the supply chain
  • Trading partner security extending to both suppliers and customers
  • Employee security awareness
  • Screening cargo contents
  • Security of inventory while in-transit through use of tamper-proof containers, seals and locks
  • Tracking of inventory while in-transit through use of technology enablers such as GPS and RFID
  • Security of items while stored in a facility
  • Information security including laptop computers
  • Disaster planning and emergency response
  • Adherence to national and international standards

Industry experts agree that supply chain security starts with an organization’s developing a security awareness culture. Employees at all levels should be educated on potential threats to the supply chain and provided the means to counter these threats. Conversely, organizations should solicit input from employees on vulnerabilities they see. Periodic security inspections should be conducted to ensure compliance with security measures. 

Security experts point out that the company’s security plan should not adversely affect movement of materials through the supply chain. They advise that coordination of all service providers within the supply chain is a must and all links in the chain must be part of the security plan. Companies must share information such as cargo movement schedules and manifests, yet protect this information thru encryption software from access by the wrong people. 

Deploying technology such as GPS tracking, can be a real enabler by providing accurate real-time information on movement of materials and the integrity of shipments at various venues. It can also reduce the need for an army of surveillance personnel.

For supply chain security initiatives and standards, there are several sources logistics companies can search including:

  • U.S. Customs Service and Department of Homeland Security Container Security Initiative (CSI)
  • The International Organization for Standardization (ISO) as it relates to supply chain security standards
  • Private firm pilot initiatives monitoring container movement and integrity with RFID and GPS technology.

Final Thoughts 

While there are no easy answers or quick-fixes to security issues, vulnerability awareness is at the very least a starting point. A well-coordinated and effective effort protecting our supply chains is a cost that companies must bear in an effort to protect their customers from privacy issues and escalating non-value-added cost.

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