How the security sector ensures the supply chain is as secure as possible
The COVID-19 pandemic, Brexit trade barriers, Russia’s invasion of Ukraine, geopolitical unrest, widespread labour shortages, an energy crisis and even extreme weather conditions have combined to create a situation where supply chains are at breaking point.
In order to ensure the best possible chance of survival and to achieve international business accreditations, most companies establish a supply chain risk management programme. This will cover all aspects of their operation where suppliers are involved, such as finance, manufacture, transport and warehousing.
This programme will include measures to track and monitor suppliers, implement hardware and software controls, employee training and physical security. It follows that the security sector has a massive role to play in ensuring that the supply chain is as secure as possible.
Lean to mean
The importance of a robust and reliable supply chain is well documented throughout history, though usually in the context of conflict. Alexander the Great famously said, ‘My logisticians are a humourless lot. They know they are the first ones I will slay if my campaign fails.’ Suffice to say they did their jobs well and provided his army with an uninterrupted stream of supplies.
Likewise, the consequences of supply chain disruption should come as no surprise. In World War II, for example, the Special Air Service (SAS) in North Africa spent time hindering German supply lines to ensure a tactical advantage much assisted by the legendary LRDG (Long Range Desert Group).
On to more recent and stable times, anyone under the age of 50 will have become used to having everything they want, on demand, thanks to supply chains working effectively and under the influence of incredible technological innovations. Up until very recently, if something was ordered it generally arrived amazingly quickly, wherever in the world it was sent from.
However, this is a very modern development without historical precedent, and we are seeing in real time the fragility of such a system. Even if supply chain gurus may tell you that we should all stay lean and only have things delivered just in time, there is another strong argument to suggest that lean is the enemy of resilience. When lean works it’s fantastic but, quite simply, if everything is lean, as soon as something falls over, there is no back-up.
Civil unrest
Supply chain disruption is not only a logistics issue; it can have broader implications. We’ve all seen the panic buying that ensues as soon as there is a shortage of a commodity – whether its petrol, toilet rolls, or anything in between. Unfortunately, when people are stressed they start to behave badly. There have been fights at filling stations and supermarkets, with people becoming very aggressive when they’re trying to get their share of what they think they should have.
This situation also leads to price inflation and the desire to hold on to stock when it becomes available. For example, most construction materials these days come from overseas, so if there’s an interruption to the supply chain, prices go up and this can lead to goods being stolen. Price inflation has been most noticeable in the automotive sector, where a lack of microchips has meant that production of new cars has been interrupted and the price of second-hand cars has risen, so consequently the theft of second-hand vehicles increases. With the semiconductor market being in excess of a $500bn market globally, even at full production there may well be a bottleneck, which will take the delay in availability well into 2024.
Businesses need to be prepared for any eventuality and the risk assessment processes of supply chain management systems will identify ongoing threats. For example, any significant unrest in the South China Sea will, almost instantly, affect a number of things that we normally import from that part of the world, and they will become unavailable. This will then mean that both consumer and industrial goods currently produced there will be in high demand and could be a tempting target for those with malicious intent. We have highly instructive examples from the invasion of Ukraine and its impact on both energy and food costs.
Knock on effect
The tracking and monitoring processes within supply chain management systems will identify when people, companies and even countries are creating instability and having an impact, causing the need for heightened security. This might be required at a micro level, like a consolidation centre or a warehouse, or at a macro level, such as at logistics hubs like air and sea ports or other transport hubs.
Security providers may be asked to put relevant measures in place to counter any recognised threat, whether cyber or physical – and most likely both. Any locations where there are in-demand goods may need more security. This may be through surveillance cameras and other tech, while some of it will also require boots on the ground.
Plan of action
The integration of security measures to protect products and equipment, whether cyber security or physical measures, is an important part of an effective supply chain management system. This can create both efficient and effective responses to fluctuations caused by world events.
In order to have greater resilience and secure supply chains we’re going to have to keep things on the shelf a little bit longer than we’re used to and look after them through an adaptive and responsive security strategy integrated within the supply chain management system.
Gary Sullivan OBE
Chairman
Wilson James
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