Supply Chain Security: Is Your Company Complacent or Engaged?

Imminent terrorist attacks or no, your competitive advantage demands that you secure your company's supply chain


Have you developed a corporate plan, or are you focusing on making money for your company now, and figure you'll deal with the fallout when disaster strikes? How will you compete with those proactive companies that already have well-defined strategies and contingency plans in place? How are you coping with such mandatory regulations introduced to the trade in the past two years as the Advanced Manifest requirement, origin no-load notices, increased document and cargo examinations, and Vehicle and Cargo Inspection Systems (VACIS) inspections?

Don't fool yourself into thinking that importing will get easier in the future. The federal government is raising the bar on a daily basis. Soon to come are such things as port user fees to pay for increased port security, fees assessed by ocean carriers to subsidize the International Ship and Port Facility Security (ISPS) Code, and the CBP Smart Container initiative that will mandate high-security container seals on all import containers. Currently, in excess of 50 transportation security related bills are pending in Congress. Legislation is like a steamroller.

Members of Congress and various agencies, including DHS and CBP, feel it is their personal mission to make America safer; the citizenry expects it. There are still many in Congress that do not understand the complexities of international trade, calling for physical inspection of 100 percent of inbound containers or limiting the time uncleared containers can be stored at ocean carrier terminals to seven calendar days before being removed to a General Order warehouse. Are you sitting on the sidelines watching legislation and regulations being enacted that will affect your business, believing you can do nothing to influence them?

Efficient supply chains are all about velocity and cost savings. Supply chain security is expensive for citizens, companies and America. But another September 11 will exact a far greater toll. If a weapon of mass destruction were to be smuggled into one of your containers, Complacent Shipper, your sales would be devastated and your brand equity forever tarnished, if not destroyed, particularly if you had done little to secure your supply chain like the government has been asking the past three years.

Most companies want to be good corporate citizens and have the best intentions about securing their supply chains. However, the difference between engaged and complacent companies is commitment. Proactive companies have made supply chain security a corporate priority, figuring out how to implement government guidelines in accordance with their business models. Less motivated companies allow a laundry list of corporate initiatives to take precedence, or say it's too difficult or expensive to revise internal processes and harden physical security, keeping their fingers crossed that nothing bad will happen. Other firms choose to focus their entire efforts on earning money today.

What America needs now is for all importers to change their attitudes and become more engaged in strengthening the country's borders. Complacent Shipper, your business may not have been adversely affected so far, but you can bet it will be if you're not as prepared as your competition. It's not too late to make security a strategic initiative within your company. So prepare according to your means and resources.

Should another terrorist attack occur in the near future, what you do in the next few months to get organized and develop a game plan might be far more important than the activities in which you're engaged today in terms of building shareholder value, brand equity and competitive position.

Remember that it took five painful months for port operations to resume normalcy after the 10-day International Longshore and Warehouse Union lockout in the fall of 2002. The national economy suffered substantially as a result. If the next terrorist attack involves an ocean container at a U.S. port, expect that the federal government will likely shut down all ports as one of its first response actions, and one can only hypothesize as to how long ports might remain closed. It is, however, certain that as the days pass, the resulting transportation gridlock and economic damage will exponentially escalate. Can your company survive in the face of such a scenario? Isn't your brand worth defending?

What's a Complacent Shipper To Do?

The answers aren't revolutionary or the recommendations difficult to apply. Figure out what's appropriate for your size and type company. You can't be too busy to start making supply chain security improvements today.

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