Supply Chain Security Is Becoming More Important By The Day: Part II

Yesterday we reminded you of the benefits of supply chain security, and then noted good supply chain security has gone from a nice to have to an absolute must have.

In fact, your entire supply chain now needs to be designed with security in mind as well as risk. It’s not just lowest cost and availability of supply any more. It doesn’t matter if the supplier is lowest cost, highest quality, able to produce more than you need in the best market conditions, and guaranteed component and material supply from local distributors and mines if you can’t get the products from their factory halfway around the world to your local warehouse.

In other words, you can’t choose a supplier:

  • in a sanctioned country
  • if the only shipping routes include war zones

… without a backup (for when something inevitably goes wrong):

  • where there are active trade wars between their country and your HQ or target country
  • where the majority of shipping lanes are currently high risk (of disaster, piracy, and/or theft)
  • where the government is pursuing an isolationist agenda that could significantly impact exports
  • where the available transportation companies don’t have good security measures

Then, once you select that supplier, you need to focus on ensuring you have end-to-end security. This involves ensuring that:

  • you use suppliers with good plant security
  • … who use carriers with good security
  • … and sub-tier suppliers with good plant/mine/farm security
  • you have (near) real time GPS (cell/satelite) tracking on every vehicle
  • you have RFID tracking on every pallet
  • you ship food and drink in tamper proof packaging
  • you ship electronics or dangerous products in tamper aware packaging
  • you have documented chain of custody for every pallet from supplier factory to your warehouse
  • you have physical security for valuable goods (and especially those that are hot targets, like truckloads of iPhones)
  • … this includes the use of ocean freight carriers, that spend a lot of time in international waters, that have their own private security force to deter piracy / terrorism

Otherwise, you’ll have an insecure supply chain and it’s just a matter of time before you get blocked, seized, pirated, terrorized, or sunk.