Enhancing security through efficiency focus- Insights from a multiple stakeholder pilot implementation (Sternberg et al. 2012)

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Summary

Efficiency and security are said to be opposing goals of logistics operations: when security goes up, efficiency decreases, and vice versa. Yet, it is suggested that information technologies could improve efficiency and security simultaneously. Sternberg et al. (2012) investigate this hypothesis: whether and to what extent increased attention to efficiency results in improved security in carrier operations in a seaport context. In a longitudinal case study, they research carrier operations in connection with port terminals carrying out Roll-in Roll-out (RoRo) operations on trailers at the port of Gothenburg. They find that investments in new ICT solutions, in fact, remove some of the barriers to higher efficiency and improve security against cargo theft and terrorism. In particular, they report that ICT investments increased efficiency in terms of reduced waiting times and increased ability to plan port operations (pre-arrival notification) and fast positioning of trailers in a port. The new ICT solutions also increased security in terms of more secure document handling (decreases the risk that sensitive information falls into the hands of criminals), better anomaly detection (helps customs identify trailers that are most likely tampered in-transit) and increased visibility. The abstract is available at: http://onlinelibrary.wiley.com.

Review by Toni Männistö (CBRA) based on his doctoral thesis.

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Full review

This article is relevant for CORE demonstrations that focus on sea port operations (WP10-11 and WP13-15 and WP17). The research shows how a ‘common information sharing platform’ – an electronic and highly automated communication network among LSPs, carriers, ferry operators, port operators and authorities – increases logistics efficiency and security performance simultaneously. The main components of this platform include information sharing through a common information area, real-time geographical position of truck and trailer, identification technology in truck, RFID tags on transport units and RFID readers mounted on terminals, electronic manifest, and electronic container seals. More specifically, Sternberg et al. (2012) observed that adoption of a set of IT-enabled SCS solutions eliminated logistics efficiency and security issues simultaneously:

  • Real-time geo-positioning of trucks and trailers enabled the port operator to allocate a vacant spot for a trailer prior to its arrival, which reduced the waiting time at the port entrance. The real-time information enabled also customs to detect anomalies in shipping schedules and routings that would imply a heightened risk of smuggling.
  • RFID-based identification of drivers, trucks, and trailers automated and accelerated the access formalities at the port entrance and increased reliability of driver authentication.
  • Digitalization of cargo manifests eliminated the time-consuming manual document handling and reduced the risk of unauthorised access to confidential information.
  • E-seals enabled customs officers to identify intact containers and spare them from time- consuming inspections.

Reference

Sternberg, H., Nyquist, C., & Nilsson, F. (2012). Enhancing Security Through Efficiency Focus—  Insights from a Multiple Stakeholder Pilot Implementation. Journal of Business Logistics, 33(1), 64-73.

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Global supply chain design considerations: Mitigating product safety and security risks (Speier et al. 2011)

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Summary

There is a broad consensus among supply chain professionals that supply chain disruptions are very bad for business: supply chain glitches commonly lower operational performance and reduce shareholder value. Regardless of this, there is surprisingly little research on supply chain design strategies that have the highest potential to mitigate the risk of disruptions. Based on interviews with 75 US-based managers, an industry survey and a case study, Speier et al. (2011) identify types of SCS strategies and examine how contextual factors influence business managers to select a set of SCS design strategies. They argue that the depth and breadth of security initiatives depend mainly on top management mindfulness, operational complexity, product risk and coupling. The abstract is available at: http://www.sciencedirect.com.

Review by Toni Männistö (CBRA) based on his doctoral thesis.

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Full review

The paper of Speier et al. (2011) is quite theoretical and it has therefore only a limited impact on CORE work. It is useful for people for the CORE demonstrators to be aware of various supply chain design strategies and factors that support their selection. All in all, the paper introduces an interesting table that shows what supply chain factors typically affect selection of certain supply chain design strategies (see table below). The paper also includes a useful discussion about the nature of supply chain security risks. The authors point out that supply chain security covers risks of contamination, damage and destruction of products or other supply chain assets, and that these risks may arise from intentional or unintentional activities.

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Reference

Speier, C., Whipple, J. M., Closs, D. J., & Voss, M. D. (2011). Global supply chain design considerations: mitigating product safety and security risks. Journal of Operations Management, 29(7), 721-736.

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Supply chain efficiency and security: Coordination for collaborative investment in technology (Lee et al. 2011)

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Summary

Information technologies often provide significant benefits for companies in terms of better logistics efficiency and security. But despite of this fact, many companies in the logistics sector have not adopted such technologies to a high extent as one would expect. In their research paper, Lee et al. (2011) investigate coordination problems and related incentive mechanisms between manufacturers and retailers in a two-echelon supply chain, when companies are investing in ICT technologies that have potential to improve both logistics efficiency and security. Using mathematical modeling, they find that relative strengths of efficiency and security concerns result in different coordination problems when implementing a technology. To increase overcome coordination problems and reach the optimal level of ICT investments, the authors propose imposing penalties on parties, that are responsible for security breaches, and introducing tax incentives. They conclude that IT-based supply chain security solutions have a high potential for increasing both security and logistics performance through higher supply chain visibility. The abstract is available at: http://www.sciencedirect.com.

Review by Toni Männistö (CBRA) based on his doctoral thesis.

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Full review

Lee et al. (2011) consider the SCS performance rather narrowly as the organization’s ability to locate and eliminate the source of a product contamination. This is a rather unorthodox approach: scholars commonly consider SCS performance in terms of capability to prevent, detect and recover from crime that takes place in the supply chain context. But regardless of the narrow scope, the paper provides useful information how about to protect cargo from hostile tampering cost-effectively. This is particularly relevant for the CORE demonstrator with fast-moving consumer goods of Procter & Gamble (WP17). Also partners involved in the development of educational and training material are going to benefit from the findings of this research paper.

Reference

Lee, J., Palekar, U. S., & Qualls, W. (2011). Supply chain efficiency and security: Coordination * for collaborative investment in technology. European Journal of Operational Research, 210(3), 568-578.

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Controlling access to pick-up and delivery vans: the cost of alternative measures (Haelterman et al. 2012)

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Summary

The situational crime prevention theory suggests that preventive security measures often backfire. For this reason, it is problematic that many managers do not have a holistic picture which kind of considerations should precede selection of implementation of security measures. A paper by Haelterman et al. (2012) tests the practical feasibility of a new management model that is designed to highlight the most promising preventive security measures given a set of preconditions and costs. The authors apply this model in the context of pick-up and delivery van operations at a Belgian branch of a major express courier company. Such transport operations are subject to risk of theft and terrorism, especially if unauthorized people managed break into pick-up and delivery vans. To test the management model, the authors collect views of of supply chain practitioners in two expert panels and through a survey. Their analysis covers a broad array of preventive security measures including key card, audible alarm, silent alarm + GPS, notification on vehicles, awareness training, no company logos, formal instructions / compliance checks & sanctioning, double drivers, over security escorts. The abstract is available at: http://link.springer.com.

Review by Toni Männistö (CBRA) based on his doctoral thesis.

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Full review

The research of Haelterman et al. (2012) sets a solid theoretical basis for practical supply chain security work. All CORE work packages that cover aspects of road transport benefit from the analysis of this research paper. The research shows that a set of preconditions influence outcomes of preventive security measures: availability (legal, infrastructure), practicability (perceived), required knowledge, required expertise, user awareness, user belief, use commitment (anticipated), and co-operation. Security measures also incur different kinds of costs: financial costs, ethical/social cost (labeling, distrust, civil liberties, inequalities), aesthetical cost. Finally, as the theory on situational crime prevention suggests, security measures may result into various reverse effects, including crime displacement (geographical, temporal, target, tactical, crime types), escalating effects (e.g., use of violence), creative adaptation, and enticement effects.

Reference

Haelterman, H., Callens, M., & Vander Beken, T. (2012). Controlling access to pick-up and delivery vans: the cost of alternative measures. European Journal on Criminal Policy and Research, 18(2), 163-182.

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The displacement effect in cargo theft (Ekwall 2009)

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Summary

Cargo theft has always been a problem for shippers and logistics service providers. Even so, regardless of the persistent efforts to reduce cargo theft, crime continues to strive. This classic supply chain security paper by Daniel Ekwall analyzes and explains why cargo theft continues to occur in the transport network despite all implemented countermeasures. Focusing on Swedish transport and logistics facilities, the Ekwall’s research builds on interviews with six subject matter experts, survey with four terminal operators, and macro-statistics from TAPA (Transported Asset Protection Association). The paper finds some evidence on crime displacement in terms of method (modus operandi): cargo thieves target increasingly cargo in-transit because logistics facilities are nowadays better protected. However, displacement is likely to be partial in contrast to complete displacement. This means that absolute theft risk can be reduced. Download the abstract here: http://www.emeraldinsight.com.

Review by Toni Männistö (CBRA) based on his doctoral thesis.

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Full review

The Ekwall’s research gives an interesting overview on criminological theories underpinning supply chain security research. The theoretical outlook provides the foundation for the CORE work and all CORE work packages can therefore benefit from the analytical discussion and findings of this research paper. The main lesson is that criminals and terrorists are calculating antagonists who adapt their behavior in response to information on risks and rewards of crime opportunities. More specifically, Ekwall argues that professional cargo thieves seem to target increasingly “cargo on wheels” instead of warehoused goods. He explains this shift in the behavior with the fact that, facility security has improved relatively more than in-transit security over the past decade. However, he stresses that it is hard to establish a causal relationship between security interventions and changes in criminal behavior. He holds further that if displacement occurs, it is likely to be partial rather than complete.

Reference

Ekwall, D. (2009b). The displacement effect in cargo theft. International Journal of Physical Distribution & Logistics Management, 39(1), 47-62.

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Estimating the Operational Impact of Container Inspections at International Ports (Bakshi et al. 2011)

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Summary

The US government is pushing a new 100 % screening regime for US-bound containers in foreign ports to mitigate the risk of weapons of mass destruction entering US soil. The 100 % regime, however, is a major concern for foreign port operators because the current Container Security Initiative (CSI) regime seems not to be scalable for high inspection rates. The paper of Bakshi et al. (2011) simulate impacts of two container inspection regimes (the CSI and a new one) in terms of port congestion, handling cost and dwell time. To carry out the simulation, the authors use discrete event queuing network simulation with real container movement data from two of the world’s busiest container terminals. The analysis shows that cargo inspections many times disrupt optimized logistics processes at seaports. In particular, inspections extend the transportation leadtime because shipments lose time as they (i) are moved to an inspection site, (ii) queue for inspection to start, (iii) pass inspections themselves. Download the abstract here: http://pubsonline.informs.org.

Review by Toni Männistö (CBRA) based on his doctoral thesis.

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Full review

This paper is highly relevant for CORE demonstrations that involve screening in seaports (WP10-11 and WP13-15 and WP17). The research illustrates the impact of the security integration on speed, cost, and predictability of the seaport logistics. Bakshi et al. (2011) observe that security inspection at port entrances (quayside for ships and city-side for trucks) with drive-through inspection portals, does not delay nor divert the routine container handling process, in which a crane unloads a container from a ship or a truck and deposits it to a stack where the container waits until it is its time to leave the port. But if a container is inspected a few hours prior its scheduled departure, as is currently done under the US Container Security Initiative (CSI) regime, the routine handling process gets disrupted, (see Figure 6). Remarkably, the only value-adding security activity “non-intrusive inspection” (11) requires three preceding activities (8P10) and another three following activities (12-14), none of which add value from security or service standpoints. Other valueless activities, which do not appear in the illustration, include searching of the shipment selected for screening and verification of its documentation. The extra activities consume time and money but add no value to the shipping service. The first approach with drive-through portals eliminates the non-value adding supportive logistics activities (8-10 and 12-14) and therefore enhances logistics speed and efficiency without necessarily lowering the security level.


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Reference

Bakshi, N., Flynn, S. E., & Gans, N. (2011). Estimating the operational impact of container inspections at international ports. Management Science, 57(1), 1-20.

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Supply chain security orientation: conceptual development and a proposed framework (Autry and Bobbit 2008)

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Summary

Even though supply chain security has become an increasingly important managerial domain, there is little understanding about what security aware firms are, what enables and drives security awareness, and what are the outcomes of supply chain security (SCS) orientation. Autry and Bobbit (2008) set out conceptualize, validate and operationalize the construct of SCS orientation. Based on 31 interviews with US-based managers, they conclude that SCS orientation comprises four general categories of security solutions: security preparation and planning, security-related partnerships, organizational adaptation and security-dedicated communications and technology. The authors write that these security solutions “could result in supply chain risk management-related efficiencies, such as decreased lead times to customers, greater product reliability, waste reduction, and increased delivery reliability, due to the lessened need for operations workers to perform security-related tasks such as redundant container checking, securing shipments, or other similar tasks.” The abstract is available at: http://www.emeraldinsight.com.

Review by Toni Männistö (CBRA) based on his doctoral thesis.

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Full review

The CORE demonstrators could a learn lesson from the research paper of Autry and Bobbit (2008) that organizational commitment to security plays a critical role in the fight against supply chain crime. Ideas and findings of the research paper also contribute to the development of the CORE educational and training material (WP19). The article shows that top management support, employee security attitudes, employee integrity/loyalty are key internal factors that strengthen the SCS orientation. External contributing factors include political political/legal factors/support, partner cooperation, and partner support. Strong SCS orientation is expected to translate into higher business performance, customer satisfaction and supply chain chain continuity.

Reference

Autry, C.W. & Bobbitt, L.M., 2008. Supply chain security orientation: conceptual development and a proposed framework. The International Journal of Logistics Management, 19(1), pp.42–64.

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CASSANDRA compendium. Standards in supply chain management (Ch. 9)

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Summary: Chapter 9 of the CASSANDRA compendium lists and discusses various standards that set the context for international supply chain management. The chapter focuses especially on management standards (e.g., ISO28000), technical standards (e.g., RFID, electronic seals and barcodes), standards for exchange of information among supply chain stakeholders (e.g., UN/EDIFACT and XML messaging), and customs security standards (especially the World Customs Organisations’ SAFE Framework of Standards). GS1 Global Visibility Framework and other industry standards are included in the discussion, as well. The chapter points out that because a large variety of standards are already available, the challenge is not a lack of standardisation but the lack of harmonisation between different standards. The section also concludes that even if the diversity of standards was harmonised, the next step would be to ensure that the standards would be consistently implemented in different contexts.

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Full review: The chapter focuses on listing different standards that affect the modern supply chain management. There not much details to be reported in this section. However, especially people working with CORE work package 6 “SCS Reference Framework and Standards” should read the brief listing and general discussion of standards and standardisation. Other chapters of the CASSANDRA compendium provide complementary information about standardisation in the field of supply chain management (e.g., Ch. 5 & 6).

Reference

Hintsa, J. and Uronen, K. (Eds.) (2012), “Common assessment and analysis of risk in global supply chains “, Compendium of FP7-project CASSANDRA, Chapter 9

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CASSANDRA compendium. Technologies for supply chain visibility and security (Ch. 8)

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Summary: Chapter 8 of the CASSANDRA compendium reviews current and future technologies that help managers to improve visibility and security over global end-to-end supply chains. The supply chain visibility technologies, in essence, provide logistics managers with a variety of information – shipment data, performance metrics, inventory levels, production / delivery schedules and sales forecast, for example – in or close to real time. The chapter’s review on supply chain security technologies focus mainly on security sensors (e.g., motion detectors), container seals, biometric user authentication devices (e.g., fingerprints), and non-intrusive inspection equipment (e.g., X-ray screening stations). The section also elaborates modern ways for sharing information among stakeholders that are concerned about security of the supply chain. The CASSANDRA compendium is available for download: www.cassandra-project.eu. Review by Toni Männistö (CBRA)

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Full review: Chapter 8 includes some interesting details and insights about modern visibility and security technologies, many of which are relevant especially for CORE demonstrations but also for other work packages such as WP2 (SCS controls), WP7 (CORE Connectivity Infrastructure and Solutions Development Environment) and WP8 (CORE Ecosystem).

Many large logistics operators have developed own supply chain visibility systems to coordinate and organise logistics operations. A large logistics service provider, Kühne+Nagel uses its KN login visibility system that allows the company to optimise its complex global operations in terms of speed, time-certainty, security and cost-efficiency and many other relevant metrics. DHL, a German-based international express courier and logistics company, uses its LOGIS software for its operations. Previous EU projects have also developed visibility systems, for example Smart CM SICIS (Shared Intermodal Container Information System).

These visibility systems enable fast response to most operational contingencies that are about cause deviations from original plans. For instance, if a shipper got instant information about a stolen container, a new delivery could be quickly arranged and the consignee could be informed as soon as possible about the reshipment. Moreover, the visibility systems often interface ITC systems of other key stakeholders in the international supply chains. Customs, for example, receive advance cargo information (ACI) automatically from these systems.

The second part of the chapter 8 focuses exclusively on security technologies. The review starts with description of security sensors that are designed to detect tampering, unplanned detours, and other suspicious events in the supply chain. The modern sensor technologies sense at least changes in lighting, acceleration, location (geo-fencing functionality), motion and CO2 levels (used, e.g., to detect stowaways inside shipping containers). The chapter introduces modern user authentication technologies (e.g., fingerprints, face, retina, hand geometry and other unique biometric characteristics). Some information is provided regarding non-intrusive screening solutions that are often considered to be necessary for fast and secure screening operations. The rest of the chapter discusses various technical and institutional solutions for exchanging security-relevant information among supply chain operators and relevant government agencies. Especially interoperability of ICT systems seems to be crucial for effective security efforts in the global supply chains. The CASSANDRA compendium is available for download: www.cassandra-project.eu. Review by Toni Männistö (CBRA)

Reference

Hintsa, J. and Uronen, K. (Eds.) (2012), “Common assessment and analysis of risk in global supply chains “, Compendium of FP7-project CASSANDRA, Chapter 8

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CASSANDRA compendium. Private sector perspectives on risk management (Ch. 5) and crime prevention and security management in supply chains (Ch. 6)

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Summary: Chapters 5 & 6 of the CASSANDRA compendium provide a general overview on supply chain security risk management from the private sector perspective. Explaining the essentials of supply chain risk management, Chapter 5 introduces commonly used risk management models and tools (e.g., risk matrices and risk registers), discusses various classifications of supply chain risks, and elaborates current trends of risks and risk management in the supply chain context. Chapter 6 focuses on specific challenges of supply chain security risks – the risks that arise from intentional, man-made criminal activities such as terrorism, theft, trafficking, and sabotage. The chapter explains a few early classifications of supply chain security risks (e.g., motive-based typology and taxonomies based on private sector perspectives). Following the classifications of security risks, the chapter puts forth a few models for managing security risks in the supply chain context (e.g., the 8-layer model for supply chain security management). The chapter concludes with a detailed case study on security management of an international security company and a comparison of supply chain security management and the total quality management (TQM) management philosophy. The CASSANDRA compendium is available for download: www.cassandra-project.eu. Review by Toni Männistö (CBRA)

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Full review: Previous observatory entries have already shown the relevance of the CASSANDRA compendium to the community of supply chain management professionals. The compendium’s chapters 5 & 6 give a brief summary of risk management and security risk management in the context of international supply chains. The contents of the chapters are relevant and useful for people involved in FP7 CORE project, especially for those involved in work packages 3 (Multi-method Threat and Vulnerability Analysis Suite) and 4 (SC Situational Awareness Tools & Maps).

Chapter 5 elaborates a set of common supply chain risk management tools. The model of Waters (2007) summarises rather obvious three steps of the risk management process: identifying risks, analysing risks and responding to risks. The model proposes, for example, that managers can identify supply chain risks through analysis of past events, collection of opinions, and through operational analysis. The model also calls for managerial attention to prerequisites of successful risk management – mutual trust, cooperation and information exchange among relevant stakeholders involved in supply chain management – and highlights importance of continuous monitoring and controlling the risk management process. The chapter concludes with the four classic approaches to risk management: risk avoidance, risk reduction, risk transfer (e.g., insurance and contractual agreements), and acceptance. The classifications of supply chain risks include typologies focusing on risk sources (natural hazards operational failure and terrorism), risk consequences (e.g., risk to operations, risk to reputation and risk to profits), and objects of vulnerability (e.g., information, materials, personnel and financial flows).

The chapter on crime prevention and security management (Ch. 6) in supply chains provides a concise summary on supply chain security management from the private sector perspective. The chapter starts by describing some early classifications of supply chain security risks. A motive-based taxonomy classifies such risks into the three categories: economic crime (profit as motive), other crime types (ideological, emotional and other reasons as motive) and facilitating crime that covers activities that do not bring direct crime benefits but help committing other rewarding crime crimes later on. (e.g., document fraud, bribery and use of intimidation). The chapter’s next section elaborates ways to mitigate security risks in the global supply chains, highlighting the key ideas of the so-called 8-layer model for supply chain security management (the model incorporates multiple aspects of risk assessment, hands-on design and planning, implementation of a variety of technologies, procedures, and incentives as well as preparation for dealing with the consequences of supply chain crime). The chapter provides also a case study with an international tobacco company that runs high security risk supply chain operations. The section also contrasts, rather interestingly, principles of security management against the fundaments of the total quality management (TQM) management philosophy. The chapter continues with a brief review of regulations (e.g., EU customs security and aviation security regulations) and standards on supply chain security management (World Customs Organization’s SAFE framework of standards, and industry standards of the Transported Asset Protection Association).

Reference

Hintsa, J. and Uronen, K. (Eds.) (2012), “Common assessment and analysis of risk in global supply chains “, Compendium of FP7-project CASSANDRA, Chapters 5 & 6

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