Why you should pay more attention to your supply chain security

Supply chains are exposed to a high number of risks today. Not only in terms of accidents that may occur during the logistical processes that compose it. Actually, cyber threats are growing daily. To be competitive, a supply chain must be secure, solid and well managed. No matter how extensive or complex it may be: The risk management team of an organization should focus its efforts on achieving excellent levels of security.

The risk management process in the supply chain basically consists of identifying the different sources of disruption in the supply chain as a whole, then quantifying each of the risk factors, that is, estimating with statistical or analytical models the probability of occurrence, to evaluate the risk in a quantitative or qualitative way, in order to be able to define a protocol of action in the event of possible risk situations.

A supply chain security management system should combine traditional practices with security measures to protect your business from threats such as workplace accidents, piracy, hacking, terrorism, and fraud. Among the most important aspects of security management, the protection of cargoes and the guarantee that they will be transported from one place to another should be a priority. As supply chains grow at an international level and become more complex, companies also face the greatest security risks and compliance challenges.

In Europe, for example, the theft of truckloads costs the European Union more than eight billion euros in damages each year, which, from any point of view, is an unacceptable number. In most cases, the consequences of cargo theft are even more serious: non-deliveries that lead to production losses and, therefore, to order cancellations, online reputation decline and, in the worst case, insolvency.

However, companies can limit loss risk at all levels, for example, by sensitizing workers and devising practical strategies, so that safety is present in every decision they make on a day-to-day basis.

cargo_employee_security_logistics_supply chain
Image courtesy of JAXPORT at Flickr.com

It is important to emphasize that the theft of cargoes to trucks, in general, involves the infiltration of the thieves and their partners in crime in the companies they assault. For this reason, more than ever, it is necessary to exercise a strong control in the selection processes, so that potential threats of theft can be detected in time from aspiring workers. In cases of cargo theft, it is the drivers themselves who are especially exposed to danger and are sometimes victims of violent attacks. Transportation companies can use their technical and organizational capacity to specifically support drivers and counteract such incidents. For example, it is recommended to include a system of safe stops. Likewise, only the transport details between the driver, the top, and the center must be exchanged.

Read also: The Worst Supply Chain Mistakes Big Companies Make, by David Kiger

On the other hand, both institutions and companies are prioritizing cyber security in transactions, or financial information flows in online banking operations, particularly, in the use of services offered by online platforms. Various protection solutions have been developed for e-Commerce systems – whether via smartphones or tablets or using Near Field Communication devices, mobile card readers, etc. – based on the biometrical authentication of the user. Among other solutions aimed at preventing fraud, there are also the trendy systems implemented by banks and insurance companies based on Big Data analysis.

Companies are now paying more attention to (and placing greater emphasis on) cyber security. In addition, some have been affected by recent DDoS (denial of service) and Ransomware virus attacks this year, which have created a general alert about the vulnerability in companies’ hardware or software. One of the areas to be protected is the processes and flows of information that take place in the operations between partners in the supply chain over the Internet. The cyber security and privacy protection strategies that companies must implement to protect processes and online operations among supply chain partners must range from searching for suppliers and receiving raw materials or products for delivering them to each customer.

Regarding food supply chains, although the inventory management demands attention and forecasts, when it comes to distinguishing between fresh or expired foods, the security measures are even more strict. Food producers, distributors, and retailers need to ensure that they have safety procedures in place to protect the foods they handle. These supply chain partners must apply the best inventory practices to ensure that the goods are in the correct warehouse or installation at the right time to better meet customer service requirements.

The positioning of the inventory should not be decided based on mere assumptions. Instead, producers, distributors, and retailers must use data-based analyses to ensure that inventories are available and correctly located so that orders are properly filled, and the inventory, depleted.

Security, in the wide spectrum of aspects of the supply chain, is an investment that you should consider for the competitiveness of your company. The supply chain encompasses a very broad range, not only in processes but in contributors, values, and places, making communication a fundamental axis of the logistics task. Good communication within any company is directly linked to a more efficient operation.

Recommended: 5 Steps to Protect Your Supply Chain From Cyber Threats

* Featured Image courtesy of killbox at Flickr.com

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