The establishment of physical and information security programs are fundamental in the current environment of the globalized world, with increasingly dynamic commercial exchange processes and in the face of the proliferation of war conflicts and terrorism throughout the world.
Such security measures may initially cause delays in flows through supply chains while security initiatives are institutionalized and generalized. However, events such as the terrorist attacks of September 11, 2001 in the United States and some subsequent and more recent events in other parts of the world, as well as the advance and growth of organized crime or the escalation of insecurity in the case of countries such as Mexico are sufficient reasons to promote their development, implementation and management that will ensure the speed and constant flows of goods, information and capital within global supply chains and will reduce the risk of losses that are recorded in the world due to factors caused because insecurity,estimated at several trillion dollars annually. Faced with such a scenario, companies should allocate higher percentages of their investment to security.
A reflection of the above are the measures taken and by US companies established in Mexico, which allocate around 5% of their investment in security to deal with the crime that prevails in our country and avoid losses in their businesses, as indicated by Larry Rubin, CEO of the American Chamber./
Safe Flows in the Supply Chain
Ensuring the security of the Supply Chain is not a new challenge. Over 2,500 years ago Sun Tzu, the Chinese philosopher, military and strategist, author of the Art of War wrote about the importance of securing supply chains. For his part, Napoleon Bonaparte also understood the importance of securing supply chains and we must remember his famous phrase "slowly I'm going in a hurry."
Through human history, the greatest military leaders have learned (some the hard way) the importance of providing security in supply chains.
For many, the importance of supply chain security became apparent in the aftermath of the terrorist attacks that took place in the United States on September 11, 2001, and by growing concerns about possible future terrorist attacks. Some estimates put the costs of these events to be approximately $ 2 trillion per day due to disruptions in supply chains and the inability to move goods and merchandise in the days following the unfortunate events.
Undoubtedly, these facts showed at the time and today, after more than five years, they have confirmed it and allow us to establish that there is a direct link between security and the speed that supply chains require. Speed is of the essence in today's supply chains, but focusing solely on speed without security can lead to slower supply chains. Good supply chain security management is good business today. A reflection of the above are the measures taken and announced by US companies established in Mexico in the last year, which allocate around 5% of their total investment in security, above all to tackle the crime that prevails in our country to avoid further losses in your business,as noted by Larry Rubin, CEO of the American Chamber.
In this regard, it is important to note that according to data from the same American Chamber, US investment in Mexico represented $ 100 billion in the last six years, that is, an average of $ 16.6 billion per year, which is why the 5% allocated to security would represent an average of 830 million dollars annually.
Safety principles
As the United States is Mexico's main trading partner, we need to understand its approach to security in order to achieve efficient trade flows. The United States military (US military), as established by some reports and newspaper articles published in various media in that country, considers four key aspects for security:
1. Physical security.
2. Information security.
3. Risk assessment and management.
4. Security of operations.
The problem lies in the fact that in some organizations making it safe implies delaying the processes or thinking that to do it quickly we must put aside the basic aspects of security.
In this sense, APICS, the Association for Operations Management, establishes in some materials used within the Supply Chain Professional Certification program (CSCP) that modern logistics faces three major “Ts”: Terrorism, Information Technology and Trade (Global Trade). There is no doubt that these 3 aspects must be managed not only from the perspective of speed but also of safety.
Let us see below the implications of the four key aspects for security on supply chains today, as established by Joseph Walden, CFPIM, Director of the Supply Chain Research Institute in his lecture given within the framework of the International Conference and Exhibition of APICS in October 2006.
1. Physical security.
The concept encompasses the different participants in the chain: materials, warehouses (distribution centers), transport fleets, corporate facilities and personnel.
In the case of materials and warehouses, the adoption of the Customs-Trade Partnership Against Terrorism (C-TPAT) / Clients and Business Partners against Terrorism initiative, developed in the United States of America is a good measure that guarantees the protection of the Merchandise that remains in the hands of the company at all times, which translates to C-TPAT participants in reductions in processing time at US customs and ultimately a competitive advantage towards end customers.
In the case of personnel, a study carried out by the Warehousing Education and Research Council shows that the theft of goods by employees has been increasing due to the ease with which they dispose of the goods. A proper recruitment process helps to avoid this type of behavior by employees as well as the establishment of clear policies on the actions to be taken in the presence of these criminal acts.
2. Information security.
Recent reports in the United States about a laptop that was stolen with information on more than 26 million war veterans, or the report regarding a memory stick that contained confidential information and was sold in a market in Afghanistan demonstrate how it's easy to lose critical data in today's electronic world. These incidents had a strong impact on military and veteran operations. The loss or theft of similar data about a company's customers and supply chain partners could damage the trust of business partners and lose confidential information.
We have all heard the phrase that "information is power" and in the wrong hands it can be of great destructive force. Today, much of the speed of the chain is due to the real-time management of point of sale information. Knowing what happens at all times in the market allows chains to make adjustments that drastically reduce speculative inventories and production and distribution downtime.
However, the care of information should not only contemplate possible digital attacks. At present, a large part of the information of the companies is leaked through cameras found in cell phones or by sending information to personal emails and / or through portable means such as USB memories, with well-intentioned purposes, such as being able to work from home with someone office information, which ends up being available to people outside the company. Without going any further, let us remember that there are companies in the world that buy the "garbage" of large corporations in order to rescue from it documents with vital information for the business.
The culture of computer security should extend to aspects of document disposal management and use of cell phones or portable memories.
Risk assessment and management.
Risk management and the design of continuity plans are a constant in well-designed supply chains. Chains must be designed to "guarantee" timely supply, which implies a detailed analysis of all external factors that may prevent "guaranteeing" such supply.
The process begins with the identification of the events that may disturb the chain, ranging from human errors in the execution of processes to specific actions of the competition or global phenomena such as terrorism or pandemics, and continues with their assessment, generally defining a probability of occurrence and an impact on the operation.
Once the possible events have been quantified, it is necessary to develop response plans that can be as dramatic as a redesign of the chain to avoid their presence or less severe such as the use of transfer means based on insurance and surety or the taking of specific actions to mitigate the probability of occurrence and / or the impact thereof.
Global supply chains are inherently complex, dynamic, fluid, and characterized by uncertainty or friction. This creates risks to the supply chain.
Risk assessment is the activity that determines a company's processes and identifies potential risks and dangers for the chain. In addition to identifying the risk, it is important to establish the probability that it will occur and the potential severity of the risk in the supply chain. Once hazards and risks have been identified it is time to develop controls to mitigate, reduce and / or minimize them; Once this is done, the controls are implemented and the measures adopted are then monitored and evaluated.
The implementation of point technologies such as satellite tracking and RFID contribute to a better management of the risk of physical loss of material.
4. Security of operations.
The effective use of the combination of physical security, information security, and risk assessment and management results in the total security of a company's supply chain operations.
conclusion
Security is not a cost, it is in fact an investment that allows companies a more efficient global operation and greater customer satisfaction.
Safety is a responsibility of all members of the chain, globalization will continue to demand complex supply chains with greater demands on the fast and timely delivery of products and only with a comprehensive approach to the problem can we guarantee an efficient operation.
