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In the world of globalization, companies are shifting their focus towards procuring goods and materials internationally. Once this process begins, it is often the responsibility of the modern day logistician to ensure that the goods flow as they are intended to. The challenge for the practitioner is to manage this flow with the greatest amount of control and the least amount of interruption considering all the possible concerns and compliance requirements that exist in world trade today.
To succeed requires a far greater understanding of Supply Chain and Logistics Management complexities as well as a thorough understanding of the environment from which one operates.
Trading Partners:
No longer can the buyer solely rely on their trading partners to do the job. They must take ownership of the processes and the available options. They must also be in command of the decision making regarding their shipments so as to ensure they are and that they stay in complete control of their supply lines.
Qualifying and selecting business partners now goes well beyond the traditional scope of simply acquiring products based on availability, quality and price. Purchasers must have a greater knowledge of who exactly they are dealing with on a global scale. Tangible effective and measurable security parameters must now be included and significantly weighted prior to entering a new relationship with a potential supplier or maintaining an existing and ongoing relationship with a current supplier. Establishing proper criteria regarding defined parameters must survive the course of the business transaction all way through the life of the business relationship.
Establishing adequate security criteria begins by understanding the level of risk associated with a particular relationship. The measure of risk may be different from one supplier to the other simply based on the country of origin or the existence of a global logistics network. Although dealing with international trade has always included a certain level of risk, the dimension of risk management itself has entered the domain of Supply Chain Management principally because of the global terrorism threat.
Security Criteria:
Tangible security criterion reach deep within the vendors own private business structures and processes. Effective measures include having a thorough understanding of who exactly you are dealing with, which includes site inspections, process reviews and collaborative security enhancement programs.
Adequate prevention is risk reduction. You reduce the overall risk of tampering and intrusion by implementing system wide security measures throughout your supply chain. Preventing intrusions from occurring reduces the risk of doing business with a given supplier.
The challenge is to holistically address security issues at all levels with all vendors simultaneously. Security issues at the supplier include:
1. Facility management and access controls.
2. General hiring, training and termination practices.
3. Systems security.
4. Production and packaging, order processing, staging, shipping and product storage.
5. Upstream supply chain controls
6. Shipping container inspection
Further security controls are required to address routing, trajectory and conveyance from the point of origin to the point of entry onto US soil. This level includes real-time information as to where your shipment or container is at all times. The ability to choose the route and track the shipment is paramount to intrusion prevention while your shipment is in transit, out of site and mind of your product supplier.
Conclusion:
Your choice of carrier becomes critical in your ability to control your tracking capabilities and security requirements. Does your supplier share the same security concerns as you do, have they implemented adequate measures to ensure the safe and secure passage of your product from point of origin through to port of entry. Do they themselves participate in world wide sanctioned security programs? A positive answer to all these questions does not provide you with foolproof security. It does however help you reduce the risk associated with global trade and provide you with the means to be a member of the US Customs C-TPAT program and legitimately participate in the fight against terrorism.
Pierre Chicoine is a senior consultant with Longbow Advantage, a Canadian partner firm to Navesink Logistics specializing in WMS implementation, integration and post implementation work. In addition, Pierre is a chief expert regarding security, and the C-TPAT program.
For more information or assistance with supply chain security needs please contact Karen Hawks, VP Supply Chain Navesink Logistics, Inc.
Email:kh@logjobs.com Tel: 732.671.5746
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