In Depth: Global Supply Chain  Ensuring Security of Supply in the Lean Supply Chain

With security still at the top of every supply chain practitioner's agenda, many companies are working to balance the demands of supply chain security with the requirements of today's lean supply chains

[From Supply & Demand Chain Executive, August/September 2004] Chris Armbruster, director of supply chain strategy with integrated circuit maker Agere Systems, recalls a time when the primary demands on the supply chain function were responsiveness, flexibility, reduced cycle times, improved cost. Secure sources of supply were a concern, too, but certainly not at the top of the list.

Now, three years after that Tuesday morning in September pushed security to the top of every supply chain practitioner's agenda, Agere is working to balance the demands of supply chain security with the requirements of today's lean supply chains.

Agere, a $1.8 billion company based in Allentown, Pa., is participating in the U.S. government's voluntary Customs-Trade Partnership Against Terrorism (C-TPAT) program, under which companies provide self-assessments of their supply chain security and agree to submit to government inspections in exchange for faster processing for their shipments coming into the country. Agere also is participating in the government's Importer Self-Assessment (ISA) program, which allows for exemptions to comprehensive Customs and Border Protection audits.

Simon Powell, senior manager of global logistics with Agere, says that the primary importance of these programs for the company is that they ensure that its supply chain is secure and that its products can move as quickly as possible. We view C-TPAT as critical for our global supply chain because it helps facilitate the efficient movement of our product, Powell says.

But Armbruster also points out that participation in the government programs allows Agere to reassure its own customers that it is a reliable supplier. There are a lot of things in today's geopolitical environment that could slow the supply chain down, and where some suppliers might use that as an excuse for extending lead times, Agere's strategy is to make that as transparent to our customers as we can, Armbruster explains. And this is one of those things that help us do that.

By doing so, Agere is able to avoid potential customer requirements to hold additional inventory as a hedge against possible supply problems. Concludes Powell: We definitely see a competitive advantage in being able to move our products more safely and quickly than anyone else in our industry. And we view C-TPAT as a way to ensure that we can continue to move our products as quickly as possible.

SIDEBAR: New Rules of the Game

Government and private initiatives relating to supply chain security include:

24-hour Manifest Rule (24-hour Rule)  U.S. Customs rule requiring carriers to submit a cargo declaration 24 hours before cargo is laden aboard a vessel at a foreign port.

Automated Commercial Environment (ACE)  Update of outmoded Automated Commercial System (ACS). Intended to provide automated information system to enable the collection, processing and analysis of commercial import and export data, allowing for moving goods through the ports faster and at lower cost, as well as detection of terrorist threats.

Customs-Trade Partnership Against Terrorism (C-TPAT)  Private-public partnership offering supply chain security guidelines. By complying with the voluntary guidelines and submitting to inspections, importers can qualify for expedited Customs clearance for incoming goods.

Container Security Initiative (CSI)  U.S. Customs program to prevent global containerized cargo from being exploited by terrorists. Designed to enhance security of sea cargo container.

Fast and Secure Trade (FAST)  U.S. Customs program that allows importers on the U.S./Canada border to obtain expedited release for qualifying commercial shipments.

Smart and Secure Trade Lanes (SST)  Private initiative of the Strategic Council on Security Technology, an assembly of executives from port operators, major logistics technology providers, transportation consultancies, and former generals and public officials. Aims to enhance the safety, security and efficiency of cargo containers and their contents moving through the global supply chain into U.S. ports.

For more information on solutions for supply chain security, see " Building the Secure Supply Chain ," the Net Best Thing article in the June/July 2003 issue of iSource Business.