Transcript Supply Chain Security

Supply Chain
Security/Supply Chain
Preparedness
“the single biggest threat facing
American traders is
supply chain security”
Website for C-T PAT
Supply Chain Security
“We have proved to our management
that good security is good
business.”
— Ann Lister of Texas Instruments
Six vessels within a 100-mile radius of the port of
New York have been waiting since at least Oct. 28,
according to IHS Inc. vessel-tracking data compiled
by Bloomberg News today. The tankers, also able to
carry cargoes including diesel, are probably being
delayed because of the storm and would normally
load or unload within two days, according to Truls
Dahl, a shipbroker at Astrup Fearnley A/S in Oslo.
Nov 2, 2012
Supply Chain Security
What’s the cost of 9/11 to the
Supply Chain?
Fortune Magazine - $50-80 billion a
year
• inefficient supply chains
• higher transportation costs
• increased inventory
Problem?
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Terrorism/Piracy
Obsolescence
Pilferage
Information Breach
Proprietary Data – Camera Phones; Thumb
Drives
Cyberspace Security
RFID Data Security
66% of Sealift Containers arrive at 20 Major
Ports
>58 % of all inbound containers come through
New York/New Jersey, Los Angeles, Long Beach
~44% through Los Angeles/Long Beach
Lengthening of Supply Chains – coupled with
Globalization
7/17/2015
Supply Chain Security/Disruption
Headlines
• IMB identifies rash of false shipments into North
Africa
• Pirates intensify attacks in new areas
• New High for Piracy
• Russia Sends Warship to Somali Coast to
Fight Piracy – Bloomberg.com
• UN adopts new Somalia piracy resolution
Supply Chain Headlines
• “New Budget includes $10.2 Billion for
Border Security.”
• “Major Data Theft Leads to Major Legal
Problems” Baseline Magazine
• “Polo Ralph Lauren – Lost Point of Sale
Data”
7/17/2015
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Examples
• Major Distributor, Dec 2006
• Locks on trucks
• Security and Accountability for Every
Port Act - SAFE Port Initiative
• Scanning of Containers
• C-TPAT
Threats in the international marketplace know no borders.
IMB Piracy Reporting Centre in 2012
Worldwide Incidents: updated on 27 Oct
2012
Total Attacks Worldwide: 252
Total Hijackings Worldwide: 26
Incidents Reported for Somalia:
Total Incidents: 71
Total Hijackings:13
Total Hostages: 212
Current vessels held by Somali pirates:
Vessels: 9 Hostages: 154.
Jakarta Anchorage
Type of Attack : Boarded
Narrations:
03.11.2012: 2100 LT: Posn: 06:00.4S - 106:54.6E, Jakarta Anchorage,
Indonesia.
Four robbers in a small boat approached the stern of an anchored container
ship. One robber boarded the ship using a hook attached with rope while the
other three robbers remained in their boat. Deck watchmen spotted the
robber and raised the alarm. Seeing crew alertness the robber escaped
empty handed.
Risk
Supply Chains are inherently
complex, dynamic, and fluid,
characterized by uncertainty,
ambiguity, and friction. These
characteristics cloud the operating
environment: they create risks
Risk Assessment
• Terrorism
• Theft
• Port Security – over 14 million containers
annually to the US; ~500 million world wide
• Port Security – 300 US Ports
• Longshoremen Strike – 2002/potential strike
2012
• Potential Airport Attack – LAX; MPS; LGA
• Potential loss of attack to major port - $20
billion estimate
Problems?
• 66% of Sealift Containers arrive at
20 Major Ports
• >58 % of all inbound containers
come through New York/New
Jersey, Los Angeles, Long Beach
• ~44% through Los Angeles/Long
Beach
• Lengthening of Supply Chains –
coupled with Globalization
New Problem?
• “There were no ‘secure’ rear areas.”
General Joseph Heiser on
Vietnam Logistics
• Sun Tzu – Chapter 1, The Art of
War
• Native Americans
• American Civil War – Great Train
Chase
• Pirates of the Caribbean
Supply Chain Security
A Global Perspective
Top 5 European Ports
• Rotterdam – 9.743 million TEUs in
2009
• Hamburg – 7.088 million TEUs (9.7
mil in 2008)
• Antwerp – 7.3 million TEUs (8.6 in
2008)
• Bremen – 4.565 million TEUs (5.5 in
2008)
• Valencia – 3.65 million (3.6 in
2008)
Other Key Ports
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Singapore – 25.87 million TEUs
Shanghai – 25 million
Hong Kong – 20.9 million
Shenzhen – 18.25 million
Pusan – 11.98 million
SAFE Port Act
• The SAFE Port Act codified into law
a number of programs to improve
security of U.S. ports, such as:
• Additional requirements for
maritime facilities
• Creation of the Transportation
Worker Identification Credentials
• Establishment of interagency
operational centers for port
security
Safe Port Act
• Container Security Initiative
• Foreign port assessments
• Customs Trade Partnership Against
Terrorism
Container Security Initiative
• CSI consists of four core elements:
• Using intelligence and automated
information to identify and target
containers that pose a risk for
terrorism.
• Pre-screening those containers that
pose a risk at the port of departure
before they arrive at U.S. ports.
• Using detection technology (X-Rays)
to quickly pre-screen containers
that pose a risk. Using smarter,
tamper-evident containers.
Containers - Concerns
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Cost to X-Ray containers
Manpower
Delays
Radiation
C-TPAT
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Voluntary
November 2001
> 10,000 members
~50% of all imports
Mutual Recognition Agreements –
New Zealand, Korea, Japan
• Canada has a program very similar
to C-TPAT named FAST – Free and
Secure Trade.
Orlando International Airport
• No staffing of doors for employee
entrance to baggage claim areas
• Guns smuggled into planes by employees
• “no requirement for us to staff those
doors” OIA Spokesperson; TSA – “not my
job!”
• Identified as security issues in 2004
• 2006 – ½ of TSA Screeners failed test
that measured how well employees could
identify explosives, guns and other
weapons on the scanner – but can
identify bottles of mouthwash and
toothpaste
Source: Mike Thomas, Orlando Sentinel, Mar 15, 2007, p. B-1
Food Security
Salmonella
BioTerrorism?
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Dole Foods recall April 2012
Peter Pan Peanut Butter – e coli – 2007
E-coli from fresh Spinach – 2006
Chi Chi’s e-coli – from green onions –
2003
Taco Bell – e coli 2005
None were terrorist attacks but impacted
supply chains
US Salmonella/e-coli scare 2008
Salmonella epidemic 2009 - >3921
separate items recalled
Summary
• Direct link between supply chain
security and homeland security
• Logistics costs are large part of
manufacturing costs
• Savings in supply chain costs to
bottom line
• Supply chains need to be prepared
for man-made and natural
disruptions