Daily Archives: August 5, 2013

Supply Chain Security Pays – Why Are You Still Not Doing It?

Recent studies have show that just one in six organizations have continuity plans in place 1 and that of the 43% of organizations that implement supplier codes of conduct, only 25% of these organizations perform even minimal monitoring 2. In other words, organizations are not implementing proper security-based risk management plans, even though they have a 98% chance of experiencing a major supply disruption in the next 24 months. And of the one in six organizations that are implementing security plans, only one in four of these organizations are making the effort to make sure their suppliers are conducting business in a proper, low risk way.

This is despite the fact that we’ve had hard data for over seven years that demonstrates the solid cost reductions for those organizations that invest in supply chain risk management and security. As outlined in this 2006 Sourcing Innovation Post on Quantifying the Value of Supply Chain Security Investments, the benefits of investments include:

  • Improved Product Safety

    38% reduction in loss; 37% reduction in tampering

  • Improved Inventory Management

    14% reduction in excess inventory; 12% increase in on-time delivery
  • Improved Supply Chain Visibility
    50% increase in data access; 30% increase in data access timeliness
  • Improved Product Handling
    43% increase in the automated handling of goods
  • Process Improvements
    30% reduction in process deviation
  • More Efficient Customs Clearance
    49% reduction in cargo delays; 48% reduction in cargo inspections
  • Speed Improvements
    29% reduction in transit time; 28% reduction in delivery time windows
  • Resilience
    30% reduction in problem identification, response, and resolution times
  • Higher Customer Satisfaction
    26% reduction in customer attrition; 20% increase in new customers

Just do it already!

1 The Weakest Link, UK Plc’s Supply Chain; Zurich
2 Safe Supply Chains Help Produce Sustainable Business, Zurich and Rockwell Automation, 2012
3 Innovators in Supply Chain Security: Better Security Drives Business Value, Stanford Global Supply Chain Management Forum and IBM, 2006

The Summer of … Music?

Not that long ago we indicated that today we can carry 40,000 songs in our pocket even though it has only been 125 years since you had to go see a live band to hear a song. It turns out that this is the summer of music since it has been exactly 45 years since the first music concert to have more than 100,000 paid attendees finished. On August 3 and 4th, 1968, The Newport Pop Festival in Costa Mesa, California was the first music concert to achieve the feat. Even though concerts were the primary means of spreading music for centuries, it hasn’t even been half a century since the super concert, that we now take for granted as they happen every summer all over North America. It was an organizational fiasco, but probably helped future planners and promoters of such events do a better job. One thing it did demonstrate was the importance of ensuring sufficient supply to meet demand. If you run out of food and water halfway through the first day of a two-day event, your planning has failed miserably.