The term “supply chain security” took on new meaning among logistics professionals following the Sept. 11 terrorist attacks. Long-focused on the need to thwart cargo theft and secure computer systems against hackers, supply chain security now involves contingency planning for some of the most horrible scenarios imaginable: biological, chemical and nuclear attacks via global transportation networks.
It's a reality many logistics professionals never thought they'd have to confront — but one they now realize must be accepted and planned for at every level of the supply chain. Yet logistics security experts like Chuck Lounsbury and Jeff Lester, who work for third-party logistics giant Ryder System, concede that the sheer size and scope of today's global supply chains makes it nearly impossible to mount a defense that would be 100% effective. That's why security efforts must also incorporate recovery plans that map out steps to be taken in the aftermath of a large-scale terrorist attack.
“We're very concerned about security on global, national, and local levels,” says Lounsbury, senior vp-supply chain. “For example, it's virtually impossible to check all the shipping containers coming into this country on a daily basis. I also think about cyber-terrorism; if the data flow is disrupted, all of those JIT delivery plans and inventory models go out the window.”
Every transportation mode needs to look closely at security issues, Lounsbury adds, but truckers in particular have to pay close attention. “Trucks almost always cover the last mile in the supply chain,” he says. “They bring the freight from the rail depot or warehouse to the final customer, so they're more exposed than most.”
Lounsbury believes developing good supply chain security means focusing on three areas: preparedness, response, and mitigation. Transportation companies must put together what he calls a threat assessment strategy; they must look for potential weak spots and fix them on a continuing basis. “Companies need to control access to yards and buildings, and look at hiring guards and using other forms of surveillance to secure their assets,” he says. “You need to screen employees better. The key is to manage all the risks, not let the risks manage you.”
The next step is to create a response team and a plan of action. “You have to have a team in place with the tools and guidelines ready to go when a disaster occurs.”
Finally, there's mitigation — figuring out how to recover from a terrorist attack. “Coordination among federal agencies as to who does what in the aftermath of an attack is still very poor, so a transportation provider has to figure out its own recovery needs,” he says. “You're going to face a variety of recovery issues: How do you bill a customer if the mail system and Internet are shut down? How do you keep cash flow going? If your business is to survive a terrorist attack on the scale of Sept. 11, you may have to make some hard choices.”
Lester, who is Ryder's vp-safety, health and security, adds that transportation companies need to think about safety and security management as two sides of the same coin. “They both analyze business risk and develop solutions.” According to Lester, the events of Sept. 11 didn't change Ryder's security perspective, but rather forced the company to take a fresh look at processes that were already in place to see whether they needed to be beefed up.
“Sept. 11 changed all of our lives,” Lounsbury commented. “Dealing with terrorism has now moved from the war room to the board room and the living room. Most transportation managers are used to dealing with sales and profit margins, not death and destruction. But now they need to adopt a wartime mindset. This is how we have to view the supply chain from now on.”