Final Thoughts: Stopping Your Supply Chain Problems Before They Start

Supply chain security requires a proactive approach to crisis planning and preparedness

By Don Aviv

In the wake of recent natural disasters and terrorist threats around the world, workplace security and emergency preparedness have come to the foreground of corporate planning. Businesses have now implemented plans and actively think about (1) the obligations they have to their employees, vendors and customers, and (2) how they would respond in a crisis situation.

Due to the global scope of most companies, reworking basic operational needs in order to compensate for destabilizing events across international supply chains has become equally as important as addressing onsite workplace security. Businesses must address areas of vulnerability regardless of geographical restraints and keep ahead of emerging risks through a meticulous corporate intelligence program.

Rather than rely on the notion that corporate security planners have "already thought about the supply chain," supply chain executives must take an active position in disaster preparedness planning across their ecosystem.

To formulate a comprehensive disaster preparedness plan, it is first necessary to complete a supply chain security assessment. Take the case of a large technology manufacturer that recently assessed its existing disaster recovery and contingency plans. Upon initial review, the assessment team discovered that the company had established a cross-functional crisis team consisting of key management members from wide-ranging corporate functions in addition to precautions taken from a financial and manufacturing standpoint.

But while almost everything appeared to be planned and tested for, the company's greatest vulnerability was overlooked: the company purchased the majority of its essential parts from one supplier based in a developing country that has seen economic and political strife in the past decade, making it highly likely that the company would face a problem with its supply chain.

To mitigate this risk, the assessment team designed a system in which the number of parts and necessary resources held in reserve was increased significantly so that the supplies would last for an additional two to three weeks in the event of a supply chain shutdown. Also, the team advised the company to negotiate a separate contingency contract with a supplier in a different country in addition to demanding greater access to the main supplier's contingency plans and systems. A level of mutual transparency with regard to crisis response expectations was achieved that not only resulted in improved crisis mitigation, but also a better relationship across the board. Members of the company's crisis team take quarterly trips to the main supplier's plant to observe firsthand what contingency steps are being implemented and how effectively the supplier's internal plans and protocols are tested and continuously monitored.

Most companies understand the importance of internal security, but supply chain executives must also ensure that their policies are reflected in the suppliers with which they do business. It is far better to adopt a proactive approach to crisis planning and preparedness than to be relegated to a defensive posture post-incident. Good security means good business. With an improved security and safety awareness program, employees feel protected, companies feel secure and business prospers.

About the Author: Don Aviv, CPP, PSP, is the chief operating officer of Interfor Inc., an international firm specializing in corporate investigations and physical security consulting. Formerly, Aviv was the head of global security at an international software company based in Needham, Mass. He can be reached at [email protected].