Optic Risk Solutions and Uniforms, INC. join the list of ISCPO Preferred Vendor Partners

–NEWS RELEASE–

Dallas, TX (August 23, 2019) – FOR IMMEDIATE RELEASE –  The International Supply Chain Protection Organization (ISCPO) is pleased to announce two preferred vendors partners have joined to support its members and the supply chain security community. The speed of business has exponentially accelerated the supply chain, and the ISCPO members rely on a variety of vendors for innovative tools, technology, and services to help them make their departments and flow of goods run effectively.

 

Optic Risk Solutions provides enterprise wide security and loss prevention solutions designed to enhance the overall success and profitability of an organization. As a global consulting firm, they are dedicated to helping identify risks within an organization and reducing overall exposure to loss. With their experience in Risk Management, Loss Prevention, and Safety, they will create a customized risk-averse plan that becomes part of your business and company culture. Their mission is to protect your people, your product, your property, and your profits. Optic Risk Solutions Website

 

Uniforms, Inc. is a premier embroidery and apparel business serving nationally recognized corporate brands, local companies, and municipalities based in Dallas, Texas. For over 40 years, Uniforms Inc. has been a trusted partner of clients seeking to improve their brand recognition program. Uniforms, Inc. differentiates itself from competitors by providing outstanding service, impeccable quality, and on-time delivery. The award-winning staff dedicates their attention to even the smallest details, ensuring an easy and smooth ordering process, coupled with quality embellishments you’ll be proud to wear. Uniforms, Inc. Website

 

About International Supply Chain Protection Organization (ISCPO):

The International Supply Chain Protection Organization (ISCPO) is a non-profit professional organization that connects members from across a wide array of sectors—from manufacturing, retail/wholesale/eCommerce, and distribution to risk management, law enforcement/legal, and logistics. The organization was created in 2014 to promote, educate, and advocate supply chain security and protection through building strong networks and delivering exceptional leadership training, board representation, and industry support. ISCPO.org

For more information about the ISCPO, email: info@iscpo.org

House bill aims to upgrade CTPAT

https://www.americanshipper.com/news/house-bill-aims-to-upgrade-ctpat?autonumber=849160

American Shipper

By Chris Gillis | Jul 15, 2019

Louisiana Rep. Clay Higgins introduced legislation to reauthorize and enhance the functionality of the CBP’s Customs Trade Partnership Against Terrorism Program.

Rep. Clay Higgins, R-La., who serves as the ranking member of the House Border Security, Facilitation and Operations Subcommittee, has introduced legislation to reauthorize and upgrade Customs and Border Protection’s Customs Trade Partnership Against Terrorism Program (CTPAT).

Higgins said his CTPAT reauthorization bill (H.R. 3719) would reauthorize the CBP program for the first time in 13 years, increase information sharing and collaboration with the industry and improve program management. “The reforms in our legislation ensure efficient trade and provide CBP with greater authority to enforce the program’s security criteria,” Higgins said in a statement. CBP created CTPAT shortly after the Sept. 11, 2001, terrorist attacks on the United States as part of a layered approach to international supply chain security. The voluntary program was further established as statute in the 2006 Security and Accountability for Every (SAFE) Port Act.

To participate in C-TPAT, companies complete a comprehensive security questionnaire for CBP and agree to develop programs to enhance security throughout their supply chains. CBP agrees to provide CTPAT participants with faster cargo clearances and fewer exams. More than 11,400 importers, customs brokers and freight forwarders, and carriers are currently enrolled in the program.

However, many CTPAT participants complain they have not realized notable increases in the speed of their cargo clearances or decreases in detentions. In recent years, CBP has proposed changes to CTPAT’s minimum security criteria to improve the efficiency of the program and increase participation. Higgins said his CTPAT reauthorization bill has bipartisan support in the House Security Committee, including from ranking committee member Mike Rogers, R-Ala.; former committee Chairman Michael McCaul, R-Texas; House Appropriations Subcommittee on Homeland Security Vice Chairman Henry Cuellar, D-Texas; and House Ways and Means Trade Subcommittee Ranking Member Vern Buchanan, R-Fla.

“Pre-vetting companies will ensure that our ports of entry can continue processing cargo through our borders efficiently and securely,” Cuellar said in a statement. “I am proud to co-sponsor this bipartisan piece of legislation that will increase security at our southern border while reducing wait times at our ports of entry.”

Specifically, Higgins’ 2019 CTPAT Reauthorization Act bill would:

  • Reauthorize the CTPAT program to “reflect current industry practices and threats to the international supply chain;”
  • Expand CTPAT eligibility to importers, exporters, customs brokers, forwarders and carrier and offer the agency the “flexibility” to add other international supply chain participants;
  • Require CBP to consult with industry when implementing new or updated security criteria;
  • Ensure CTPAT participants receive “quantifiable benefits,” including shorter wait times and fewer inspections at ports of entry for their participation;
  • Expand “tangible and specific benefits” to all participants during CBP’s CTPAT vetting and site visit validation process;
  • Permit CBP to suspend or remove participants from CTPAT for failing to meet minimum security criteria, providing false or misleading information, breaking the law or posing a threat to national security;
  • Offer protections to industry when appealing a suspension or removal from the program;
  • Formalize a process for recurring recertification and revalidation of security practices by CBP;
  • And allow CBP to accept a site visit conducted by a cleared foreign government under a mutual recognition agreement for continued participation in CTPAT.

Industry groups, such as the Border Trade Alliance (BTA) and Express Association of America (EAA), have offered their endorsements of Higgins’ CTPAT Reauthorization Act bill.  “This legislation makes important updates to the program to make it reflective of today’s trade environment while ensuring that tangible benefits to participants are not diminished,” wrote BTA President Britton Clarke and Chair Paola Avila in a letter to Homeland Security Committee Chairman Bennie Thompson.

Clarke and Avila said the bill’s proposed enhancements to CTPAT will “ensure that the program continues to attract new partners and retains existing ones. If the program benefits begin to wane, then the effectiveness of CTPAT will as well.” EAA, which represents the three largest express delivery companies in the world — DHL, FedEx and UPS — supports the legislation and called for its “rapid passage” by Congress. The association especially endorses the CTPAT reauthorization bill’s measure to extend Tier 3 CTPAT membership to entities other than just importers.

“EAA members are among the most secure and compliant companies in the world and have been strong supporters of CBP measures to improve supply chain security and interdict threats to aviation,” wrote EAA Executive Director Michael Mullen in a letter to the House Homeland Security Committee leadership. “The three EAA members were the original ‘co-creators’ of the Air Cargo Advance Screening (ACAS) program, one of the most effective public-private sector partnerships ever formed,” he said. “This is just one example of how these companies exceed the standards of Tier 2 CTPAT membership and employ best practices to ensure highly secure operations and therefore merit Tier 3 membership.”

Mullen said EAA also supports the CTPAT reauthorization bill’s provision requiring a cost/benefit analysis before adding minimum security provisions to the program and providing an opportunity for stakeholders to comment.   “Modifying CTPAT requirements can involve extensive costs for industry, and government should ensure these costs will be balanced with appropriate benefits in terms of genuinely increased security,” he said. In addition, EAA supports the CTPAT reauthorization bill’s continuation of the CTPAT recertification to every four years. “The costs of a CTPAT recertification can easily run into seven figures, and for highly secure companies like the EAA members, this process is not necessary more than every four years,” Mullen said.

Supply Chain Continues to Change

Courtesy of LPM Loss Prevention Magazine by Rod Fulenwider

Much more attention is now being paid to supply chain than ever before. That is evidenced in the pages of this magazine where the editors are focusing more and more articles related to supply chain security and on-shelf availability. Today, supply chain is a different animal than it was just a few years ago. Below are my observations on how supply chain continues to evolve in our industry.

Analytics

A number of us have been using analytics in the supply chain for many years. Here’s the difference: on the standard retail model (store side), vendors have produced software packages for years. Those packages were developed strictly for store-side use, and they have done a good job with the product mix over the years. Having said that, those same software producers have not produced workable products for the supply chain, which has forced those of us on the supply chain side to get creative.

Many of us have worked with our individual IT and operations departments to create our own in-house analytical platforms. For instance, when I was at Blockbuster (as it was growing and at its peak), we created our several very specific data drives to earmark potential issues. We knew that internally the highest likelihood of internal losses occurred in the consolidation area of our distribution center (DC) in McKinney, Texas. This area of the DC consisted of fifty-two aisles where employees consolidated product (such as videos, DVDs, games, and so forth) that would be shipped to 4,800 US-based stores as well as some stores in Mexico and Canada.

We created our own exception reports that pinpointed loss ratios and the highest days of the week for losses. We worked with Sensormatic and installed the first wireless track camera system in the US. Between the exception reports and the use of the new camera technology, we were able to eliminate the loss in consolidation by 82 percent. While our exception system was good, it was by no means great.

I have known Glenn Master for over twenty-five years and can say firsthand that he has continually created analytical systems at various companies. I would say that he is one of the best if not the best in implementing these systems within the supply chain.

When we discuss supply chain, we are most certainly looking at an enormous animal with not only lots of moving parts but also a significant number of companies/vendors in a given system. Using Blockbuster as an example, we found that from the time a product was shipped to us (for example, a specific movie title, say Batman) for distribution, it would be touched by multiple companies just getting to us. Then we would have to handle and prepare the product for delivery to thousands of stores, which meant the product had to be touched by multiple delivery companies.

“We recently finished a case at a DC where the company had a system in place. The system showed losses totaling just over $200,000. Our investigation revealed losses in excess of $2,000,000 and resulted in the arrests of nineteen employees”.

We cannot forget that all of the companies involved either did not utilize scanning equipment or the equipment involved was from various platforms. In the end we created a multiuse scan tag that was equipped on the doorframe of every US store in the system so that we could verify all packages were scanned for receipt at store level. The technology was important, but the ongoing relationship and teamwork with operations and IT was critical.

Language and System

Today the supply chain faces issues that many people just do not understand or cannot keep track of. Recently I was performing a security vulnerability assessment at a distribution center. The DC had experienced a series of significant losses, and they had not been able to resolve these losses internally. Their biggest problem turned out to be language and attitude. It turns out that their policy (which is like many companies) dictates that once the product is placed on the trailer, then it no longer belongs to the company; the product is now the responsibility of the carrier.

In this case, the carrier would take the product back to their own central DC where they would break the product down for delivery to twenty-five other DCs around the country. They would use multiple carriers to transport the product to these twenty-five DCs, and each DC would break the product down into quantities for delivery to smaller regional DCs to be handled and redistributed to the final-mile carriers, which in this case meant an additional number of people handling the product. By the way, the product was pharmaceutical drugs.

Language-wise the company had serious losses that they needed to explain internally as well as to the Drug Enforcement Administration, yet they had not even attempted to create a system for clear tracking within their own four walls nor a system for tracking once the product hit the first outbound trailer.

When I was at Exel Logistics, we had to create our own system to track goods from cradle to grave. I do not know what that system looks like today, but companies like Exel have been dealing with these issues for years. I know that Pitney Bowes is expanding their system and language around this subject.

The Challenge

Finding a software or hardware company that has the knowledge and depth to create intricate tracking and exception-based reporting systems for the supply chain and to create those systems that can be purchased at a reasonable rate is challenging. There may be systems out there that address the real issues, but I am still seeing systems with lots of holes in them.

We recently finished a case at a DC where the company had a system in place. The system showed losses totaling just over $200,000. Our investigation revealed losses in excess of $2,000,000 and resulted in the arrests of nineteen employees. Additionally, we identified two primary locations where the stolen products were being delivered to, both of which were customers. The exception system failed to flag this as a problem, and employees used the hole to exploit the company.

No system is perfect, and there are good loss prevention and asset protection professionals working aggressively to make the systems better. The LP and AP folks making the biggest improvements are like the system—they must be smart and able to change and respond to new technology immediately.

It is a new day for LP and AP people in supply chain. It is also these very issues that drove us to start the International Supply Chain Protection Organization with a focus on advancing supply chain loss prevention professionals and their teams.

LaserShip, Inc. is the latest to be ISCPO Carrier Certified

–NEWS RELEASE–

 

Regional Transportation Carrier Awarded Ground-Breaking Security Certification

The International Supply Chain Protection Organization (ISCPO) adds LaserShip, Inc. to its roster of certified final-mile carriers.

Dallas, TX (April 15, 2019) – FOR IMMEDIATE RELEASE –  The International Supply Chain Protection Organization (ISCPO) is pleased to announce that LaserShip, Inc. has been officially awarded the ISCPO Carrier Certified designation, as part of the ISCPO’s Carrier Security Audit & Certification program.

Lasership has achieved full compliance with ISCPO Carrier Security Requirements, which includes a comprehensive due diligence process and analysis of various security standards necessary to ensure the integrity of goods flowing through the carriers and their clients’ extended supply chain.

“We will continue to see the demands on eCommerce from both consumers and businesses. There is an inherent increase in complexity and risk within transportation,” says Byron Smith CFI LPC, Chairman of the ISCPO. “The ISCPO Carrier Security Audit & Certification program helps recognizes those that execute above and beyond in universal controls and standards, carrier accountability, and transparency within the marketplace among the growing third-party regional carriers.”

Carriers awarded the ISCPO Carrier Certified designation demonstrate their commitment to maintaining elevated levels of security, both internally and externally with their clients. By adhering to one framework of standards set by the ISCPO, time and resources are saved on all fronts. Clients have peace-of-mind that their goods are secure while in transit. Carriers save time and expense by not having to toggle between different client security programs. And, the end customer gets their package on time.

“It is truly an honor for Lasership to be named as an ISCPO Certified Carrier” says Dave Roberts, Director of Loss Prevention with LaserShip.  “I cannot underestimate the importance and value of such recognition.  Lasership is committed to providing exceptional service to our corporate customers and end users.   We work diligently to ensure that deliveries are well controlled to prevent unnecessary damages or loss.   The relationship between the ISCPO and Lasership will in no doubt continue to pay dividends.”

Wes Bank LPC, ISCPO Vice Chairman adds, “The ISCPO Organization congratulates the LaserShip Team on this achievement.  Their 33 years in the logistics service industry has laid the foundation to support industry best practices necessary to minimize loss incidents and service failures.   Let’s face it, 3PLs are a cost-effective way for businesses to move their goods.   There’s always going to be a fine line between compliance spending and maintaining competitive rates.   Through certification, the ISCPO acknowledges and applauds these efforts to demonstrate competency.”

For more information about the ISCPO Carrier Audit & Certification Program: ISCPO Carrier Security Audit & Certification Program

About LaserShip, Inc:

LaserShip is an e-commerce delivery company providing last-mile solutions through an integrated hub-and-spoke delivery network for e-tailers that desire reduced transit times and increased flexibility within their supply chain. Founded in 1986, LaserShip has evolved into the leading provider of same-day and next-day delivery services in the eastern and Midwest U.S. for some of the largest retailers. For more information about LaserShip, visit https://www.lasership.com

About International Supply Chain Protection Organization (ISCPO):

The International Supply Chain Protection Organization (ISCPO) is a non-profit professional organization that connects members from across a wide array of sectors—from manufacturing, retail/wholesale/eCommerce, and distribution to risk management, law enforcement/legal, and logistics. The organization was created in 2014 to promote, educate, and advocate supply chain security and protection through building strong networks and delivering exceptional leadership training, board representation, and industry support. ISCPO.org

For more information, email: info@iscpo.org

The Rise of the End-to-End Logistics Provider

This article was originally published by Loss Prevention Magazine and was written by ISCPO Board Member and past Chairman, Glenn Master.

 

If you’re like me, you’ve probably placed an order online in the last ninety days. Like most online experiences, it was likely seamless. You type a product in the search field, pull up comparable items, make a command decision, and place the order. When the experience concludes, you will have received an email confirmation of the order and the expected delivery date for your parcel. Most consumers who follow this process every day in the world don’t give a thought to what transportation providers will be handling their parcels. This responsibility falls on the retailer, who has been entrusted with the customer’s order. If the parcel shows up at the doorstep on time, life is good for all parties. If it doesn’t show up, life becomes bad, specifically for the retailer.

According to several marketing surveys, by 2021 global e-commerce sales will reach a staggering $4.5 trillion. To put that into perspective, out of the 190 countries ranked by the International Monetary Fund based on their gross domestic product (GDP), this dollar amount would rank number four in GDP between the countries of Japan and Germany.

China is expected to lead this blistering e-commerce pace, becoming the largest market on the planet for consumer goods purchased. As Americans, we are all too familiar with the
term “made in China.” However, as e-commerce continues to accelerate, the new term in the market place is becoming “purchased in China.” In November 2018, Alibaba CEO Daniel Zhang announced that it intends to help global business sell $200 billion in goods to China through e-commerce channels in the next five years. The Chinese government has hosted several logistics summits to try and promote its own internal e-commerce growth for Chinese retailers, who drastically want to sell and ship directly to consumers in the United States. The Chinese believe that consumers having the ability to order and receive products at their homes not only is a convenience but also offers an emotional impact. This makes sense when you consider the emotional lift you sometimes get when arriving home from work and seeing a package at your front door.

Parcels without Borders

LPM- Glenn Master Feb 2019What does this mean for individual merchants and retailers who are now experiencing the ability to sell beyond their borders? First, the experience has to be as seamless as an in-store shopping experience, which can be a daunting task if you are shipping to another country. Second, the package must be delivered quickly, and typically the consumer doesn’t want to pay for shipping. In the same breath, the consumer wants a hassle-free returns policy at no cost to them. This now leaves the retailer searching for options. One of the most-costly services in business is transportation. Therefore, most companies will look for the most cost-effective way to move that box from the warehouse to the client. This cost will vary greatly depending on several factors, which would include the time it takes to deliver the package, the distance the package has to travel, and the method of delivery. Typically, the more convenient the process is for the customer, the higher the transportation cost will be for the retailer or individual merchant. As a result, most companies will look for a balanced approach that will satisfy both the customer expectation and the costs associated with transporting the order. The result of this evolution in the supply chain is the development of the end-to-end service provider. These logistics companies support retailers as a hybrid solution, providing services that range from distribution, customs clearance, transportation, and final-mile delivery. It can include a mix of their own proprietary distribution centers and trucks mixed in with a vast network of contracted transportation providers, which can also incorporate national post offices in the final-mile delivery. If this sounds confusing, it’s because it sometimes is. However, if done correctly it is a very sound and cost-effective method for the retailer to ship a customer order to someone who may be located on the other side of the planet.

For example, picture a consumer in Seoul, South Korea, ordering a pair of shoes from a US-based retailer. The order will be picked, packed, and shipped out of the retailer’s distribution center in Atlanta, Georgia; however, the retailer is contracted with an end-to-end logistics provider. The parcel arrives at the provider’s US distribution center, is scanned in, and then placed with other retailers’ packages all destined for Seoul. The end-to-end provider then uses a large network of contracted partners that will handle that parcel as it moves from the US to Korea. The key to this type of solution is volume. The more volume the end-to-end provider can get from the retailer, the lower the cost is to the retailer. Having a Proactive LP Plan Based on this very complex network, one may ask how anything resembling loss prevention can be incorporated into this model. The answer is simple. As I mentioned earlier in this article, the shear growth of e-commerce is creating industries and subindustries that did not exist five years ago. With retailers worldwide continuing to look for cost-effective shipping solutions and customers demanding more flexibility, it was inevitable these type of hybrid solutions would be created. If the retailer has a direct contract with the end-to-end solutions provider, then the loss prevention responsibly will fall on that solution provider. Remember that once the parcel is received, the solution provider essentially owns it. With a high probability and depending on how the contract is worded, responsibilities may include labeling, customs clearance, tracking, security of the parcel, investigation of losses, and claim liability if the package is lost or stolen. Therefore, it is essential that a comprehensive loss prevention program is in place with the end-to-end solutions provider. However, it doesn’t stop there. What about all these contracted companies that are used? Here is where the rubber meets the road and where loss prevention must have a proactive plan in place that consists of the following elements:

■ A comprehensive security protocol that the contracted carriers must adhere to.

■ A robust auditing program that reviews compliance in the areas of security, scanning, and inventory control. As with most auditing, the basis is going to lie with the contractual verbiage that’s in place.

■ Loss analytics that can identify trends by country, company, route, and final mile. The foundation of this reporting is looking for package exceptions where the scanning stops, or what is commonly known as “going dark.” This is very similar to what retail loss prevention uses when running exception reports, except you are looking for trends for all touch points in a global supply chain. Regardless of whether a package circulates the globe and touches five different companies, if a scan is put to the package, and you can review that through reporting, you will see where losses are occurring.

■ Proactive communication with the carrier’s facility management, so they understand your expectations, loss trending analytics, and method of investigation. You will be surprised how receptive they will be to accept help and identify problems before they get out of hand. The one caveat is that unlike dealing with transportation companies in the US, there are specific government laws in each country that may limit the ability to conduct certain audits. This is more directed at specific actions, such as reviewing criminal background checks or drug screenings for employees versus operational processes. However, as a good rule of thumb, you should always check with your legal department and inquire about country-specific laws related to the transportation industry. As e-commerce continues to evolve, so will loss prevention. We have literally entered a new era in how the consumer shops and retailers must continue to figure out ways to ship these orders. What was once a supply chain dominated by a few large, proprietary companies is now expanding into a multifaceted approach that involves a myriad of companies that must all work together to support this growth.

 

 

Glenn Master

Glenn Master

Glenn is the Co-Founder and inaugural Chairman of the ISCPO. He currently is employed with Newgistics as the Sr. Director of Loss Prevention and as an Adjunct Professor at Texas Christian University. He has over 20 years of Loss Prevention experience both domestically and internationally with companies such as Motorola, Henry Schein and Office Depot. Glenn’s educational background includes a Master’s Degree in Criminal Justice from the University of Cincinnati and a Bachelor’s in Criminal Justice from the University of Texas-Arlington.

ASSOCIATED COURIERS, INC. is the latest to be ISCPO Carrier Certified

–NEWS RELEASE–

Regional Transportation Carrier Awarded Ground-Breaking Security Certification

The International Supply Chain Protection Organization (ISCPO) adds Associated Couriers, INC. to its roster of certified final-mile carriers.

Dallas, TX (November 19, 2018) – FOR IMMEDIATE RELEASE –  The International Supply Chain Protection Organization (ISCPO) is pleased to announce Associated Couriers, INC. has been officially awarded the ISCPO Carrier Certified designation, as part of the ISCPO’s Carrier Security Audit & Certification program.

Associated Couriers, INC. has achieved full compliance with ISCPO Carrier Security Requirements, which includes a comprehensive due diligence process and analysis of various security standards necessary to ensure the integrity of goods flowing through the carriers and their clients’ extended supply chain.

“We will continue to see the demands on eCommerce from both consumers and businesses. There is an inherent increase in complexity and risk within transportation,” says Byron Smith, Vice Chairman of the ISCPO. “The ISCPO Carrier Security Audit & Certification program helps recognizes those that execute above and beyond in universal controls and standards, carrier accountability, and transparency within the marketplace among the growing third-party regional carriers.”

Carriers awarded the ISCPO Carrier Certified designation demonstrate their commitment to maintaining elevated levels of security, both internally and externally with their clients. By adhering to one framework of standards set by the ISCPO, time and resources are saved on all fronts. Clients have peace-of-mind that their goods are secure while in transit. Carriers save time and expense by not having to toggle between different client security programs. And, the end customer gets their package on time.

“Earning ISCPO certification is a landmark achievement,” says Anthony W. Anderson, CEO of Associated Couriers, Inc. “Ensuring the multiple stages of security necessary is a base-line value for logistics providers, especially final mile and ecommerce partners.  We go above and beyond by using top of the line technology to track each package and monitor each delivery until final delivery.   We provide photo POD and e-signature to our customers to ensure closed-loop tracking and a near 100% on-time performance record.  We take great pride in maintaining an impeccable record of near zero loss, which reflects our strict adherence to security protocols and efficient practices, and continuous investment in loss prevention staff and technology.”

ISCPO Vice Chairman Smith adds, “The ISCPO Team would like to congratulate the Associated Couriers Team on their achievement. Their more than 40 years of logistics experience has formed a solid framework of best practices in internal operating procedures, delivery and return protocols, loss and theft prevention programs along with their dedicated people and facility management. Associated Courier, INC leads the way with high industry standards as a regional carrier.”

Ken Snarzyk, the Safety & Compliance Officer stated he is honored to have earned an ISCPO Certification. “It ensures security for our network through to the final mile and is an excellent addition to our US DOT, TSA and C-TPAT certifications.  We are continuously committed to upholding the highest security and chain of custody standards for all of our clients’ logistics and supply chain needs.”

For more information about the ISCPO Carrier Audit & Certification Program: ISCPO Carrier Security Audit & Certification Program

About International Supply Chain Protection Organization (ISCPO):

The International Supply Chain Protection Organization (ISCPO) is a non-profit professional organization that connects members from across a wide array of sectors—from manufacturing, retail/wholesale/eCommerce, and distribution to risk management, law enforcement/legal, and logistics. The organization was created in 2014 to promote, educate, and advocate supply chain security and protection through building strong networks and delivering exceptional leadership training, board representation, and industry support. ISCPO.org

For more information, email:

info@iscpo.org

 

 

 

Into the Rabbit Hole of Supply-Chain Risk by Maurizio P. Scrofani, CCSP, LPC

Learning How Much We Don’t Know Is the First Step to Appreciating Supply-Chain Risk Management

This article was written by ISCPO Board Member Maurizio P. Scrofani, CCSP, LPC, and was originally published at LPM.

Also read at LPM: Into the Rabbit Hole of Supply-Chain Risk

The supply-chain web is spun so intricately that it’s impossible to know it, truly. Perhaps the most we can aim for is to gain knowledge about one link, then another, and gradually appreciate more fully how pieces fit together. Maybe it’s not realistic—when it comes to today’s supply chain—to have a goal of becoming an “expert.” Instead, dedicate oneself to being a lifetime student of supply chain’s infinite complexities.

The aim of supply-chain risk management (SCRM) is fairly straightforward. It’s how we help to identify risk and manage supply-chain security adequately. But learning about supply-chain risks is a bit of a rabbit hole. Even something seemingly basic can be muddy, such as where supply chain starts. (With a product’s manufacture? When plans are drawn? At ideation?) What’s certain is that risks are inherent at every step along a product’s path to a store’s shelf. And, perhaps, back again as purchase does not always mark an end to a product’s path through the supply chain.

In the case of a return, the product may hit the road again, from store back to vendor, and undergo additional steps. In the case of, say, an oil-filled radiator, a vendor may face a series of environmental regulatory steps before parts and pieces are sent back to the manufacturer or a scrap company.

The number of players, the differences in technologies, the amount of information, and the sheer volume of interactions between these and other layers of today’s global supply chain make it extremely difficult to identify risks, let alone mitigate them.

Supply-chain management encompasses the coordination of the many activities related to sourcing, procurement, conversion, and logistics. It involves planning and processing orders; handling, transporting, and storing the products purchased, processed and/or distributed; and managing the inventory of goods in a coordinated manner. And there is risk through it all—as broad and diverse as the supply chain itself.

Cargo theft is an example of a risk in the supply chain. It is, however, a single risk within a small section of the supply chain (logistics). A furniture manufacturer/seller of wooden dressers, for example, will have to manage myriad supply-chain risks long before it has even made a product to ship. For every metal screw or plastic knob that will come from a supplier, the company will need to assess reliability, and for every shipment of wood, its health and quality.

Geographic Impact of Supply-Chain Risk Management

Today’s vulnerabilities are multiplied due to greater geographic distances and the complex processes of the supply chain. Globalization presents unique challenges when applying supply-chain risk management methodologies to safeguard the supply chain from emerging threats and vulnerabilities. Disruption can hit the supply chain at any point, from manipulation in raw material usage, malware and intrusions in digital supply-chain processes, cargo theft, and crime in warehouses and distribution centers.

At the very broadest level, external supply-chain risks include:

– Demand risks caused by unpredictable or misunderstood customer demand.

– Supply risks caused by any interruptions to the flow of product, whether raw material or parts, within a company’s supply chain.

– Environmental risks from outside the supply chain, such as economic, social, governmental, and climate factors, including the threat of terrorism, global crisis and recession, and political upheaval.

– Business risks caused by factors such as a supplier’s financial or management stability, or purchase and sale of supplier companies.

– Physical plant risks caused by the condition of a supplier’s physical facility and regulatory compliance.

In each area, questions fuel a risk-management process. Our furniture company, for example, needs clarity on key issues related to its suppliers if it is to embed resilience into its business. Intellectual property is one area—one among many—that it needs to examine.

– Do our suppliers have a history of intellectual property theft? Been accused of it?

– Have they been victims? Did an employee improperly share sensitive information or provide access to a facility? Was there a computer network intrusion?

– How do they protect their internal computer networks?

The furniture dealer also needs to know about its suppliers’ processes and procedures to verify the quality of its products or third-party products and services: How is the quality of product verified? What mechanisms are in place to ensure products meet requirements? Is an inspection process in place to review materials and/or services? Distribution is another category: How do suppliers transport products? Are they warehoused during transportation, and if so, where? Who has access to those properties? And what about finances? Are the suppliers stable?

Again, these are just some of the necessary risk-management questions to help neutralize a small sampling of external risks, from a few slivers of the supply chain. And while partnerships with top suppliers are typically strong, these questions should also be asked and answered for second and third-tier suppliers.

Of course, our fictional furniture firm faces an equal number of internal risks, including manufacturing risks, business and process risks, and planning and control risks. It faces risk from shrinkage resulting from holding too much inventory, for example. And what about risk from product defects? Or high labor costs? Or poor planning? What if key personnel leave? How might that impact business processes or how purchasers communicate to suppliers and customers?

The consequences of failure are hardly hypothetical. A new commercial airliner was delayed three years because of a failure to assess supply-chain risks properly. A candy maker’s stock sank 8 percent when it couldn’t deliver for Halloween. And in 2015, a cascade of technology missteps in a major big-box retailer’s supply chain, which caused the prospect of patchy or empty store shelves, forced it to withdraw entirely from a country’s marketplace.

Conducting a Company-Wide Risk Assessment

A robust SCRM process starts by identifying this world of risk—conducting a comprehensive, organization-wide risk assessment to determine what can go wrong. Relevant metrics, multiple sources of input, and augmented data analysis are necessary to get an accurate picture of the current situation. Risks then need to be scored and prioritized, based on their likelihood of occurrence and potential impact on business.

Once risks have been identified and prioritized, organizations need to create a comprehensive risk-mitigation plan based on short-term, medium-term, and long-term risks; to identify the right people to implement it and assign responsibilities; and to create escalation mechanisms for each risk and contingency plan.

A clear risk picture and planning are the base layer. Organizations must also monitor and track the progress of their risk-mitigation initiatives to ensure that they work in real-life business situations. Risk-management tools and insightful dashboards can help steer an organization through interactions with suppliers and other operational stakeholders and prompt timely informed decisions. Broadly, SCRM is critical to managing interaction between suppliers, information, technologies, products, and logistics service providers.

So what does our furniture company stand to gain? By improving its management of supply-chain risk, it can maintain control over inventories and distribution, thereby matching and managing supply with demand to reduce costs, improve sales, and enhance company profitability. That, too, sounds simpler than it is. It requires:

– Understanding the business, the customer and customer needs, and adapting the supply chain to find the balance that maximizes profitability.

– Customizing the logistics network to meet the service requirements of various markets, which may influence the size, number, location, ownership, structure, and mission of warehouse facilities.

– Recognizing market signals and aligning strategies accordingly to ensure consistent supply forecasts and optimal resource allocation.

– Strategically locating/warehousing products close to the customer base and speeding conversion efficiencies to react quickly to market signals and store/customer needs.

– Managing supply sources strategically to reduce the total cost of owning goods, as well as teaming with business partners to reduce costs across the supply chain to lower prices and enhance margins.

– Developing a technology strategy and IT system capable of integrating all the above information—one that makes all this critical decision-making possible.

A well-managed supply chain—one that mitigates risks—is essential to a successful operation. In today’s global manufacturing environment, where merchandise often moves across oceans or continents before appearing on store shelves, the risk of loss or delays due to cargo theft, weather, work stoppage, and even paperwork errors requires innovative and comprehensive supply-chain risk-management solutions to manage successfully. When we consider that every single piece of merchandise must in some way pass through the supply-chain network, it’s easy to see the need to implement appropriate controls and protect our interests against an increasingly complex world of risk.

MAURIZIO P. SCROFANI, CCSP, LPC, is a well-known supply-chain asset protection professional with over twenty-five years of experience in retail and manufacturing, including leadership roles with Macy’s, Bloomingdale’s, Delonghi, and Toys“R”Us. He was cofounder and president of CargoNet, a supply-chain theft prevention and recovery network solution of Verisk Analytics. Currently, Scrofani is the chief supply-chain security officer for ALTO Assurance where he leads the team that offers shippers and logistics providers a comprehensive, end-to-end asset protection and risk-management technology solution. He can be reached at mscrofani@alto-us.com.

 

NOW Courier, Inc. is the latest to be ISCPO Carrier Certified

–NEWS RELEASE–

 

Regional Transportation Carrier Awarded Ground-Breaking Security Certification

 The International Supply Chain Protection Organization (ISCPO) adds NOW Courier, INC. to its roster of certified final-mile carriers.

Dallas, TX (October 9, 2018) – FOR IMMEDIATE RELEASE –  The International Supply Chain Protection Organization (ISCPO) is pleased to announce NOW Courier, INC. has been officially awarded the ISCPO Carrier Certified designation, as part of the ISCPO’s Carrier Security Audit & Certification program.

NOW Courier, INC. has achieved full compliance with ISCPO Carrier Security Requirements, which includes a comprehensive due diligence process and analysis of various security standards necessary to ensure the integrity of goods flowing through the carriers and their clients’ extended supply chain.

“As consumers and businesses increase demands on eCommerce, there is an inherent increase in complexity and risk within transportation,” says Byron Smith, Vice Chairman of the ISCPO. “Seeing a need for standard/universal controls, carrier accountability, and transparency within the marketplace among the growing third-party regional carriers, the ISCPO Carrier Security Audit & Certification program helps recognizes those that execute above and beyond.

Carriers awarded the ISCPO Carrier Certified designation demonstrate their commitment to maintaining high levels of security, both internally and externally with their clients. By adhering to one framework of standards set by the ISCPO, time and resources are saved on all fronts. Clients have peace-of-mind that their goods are secure while in transit. Carriers save time and expense by not having to toggle between different client security programs. And, the end customer gets their package on time.

“What an awesome sense of accomplishment to receive the ISCPO certification for NOW Courier, Inc, and one we do not take lightly. Our company prides itself on security within the workplace, and that includes everyone from our drivers to our employees. Everyone owns security throughout our company to ensure our partners are 100% confident in the last mile carrier they chose, says Ryan Schwalbach, CEO of NOW Courier, Inc.

ISCPO Vice Chairman, Smith adds, “Congratulations to the NOW Courier Team on the certification accomplishment. Their internal operating procedures, delivery and return protocols, and loss and theft prevention programs along with their dedicated people and facility management combine to form a solid framework of best practices and high industry standards as regional carriers.”

“NOW Courier is honored to have earned an ISCPO Certification. We are continuously committed to upholding the highest security and chain of custody standards for all of our clients’ logistics and supply chain needs.” says Robert Welch, Director of Security, Quality and Compliance of NOW Courier, Inc.

For more information about the ISCPO Carrier Audit & Certification Program: ISCPO Carrier Security Audit & Certification Program

About International Supply Chain Protection Organization (ISCPO):

The International Supply Chain Protection Organization (ISCPO) is a non-profit professional organization that connects members from across a wide array of sectors—from manufacturing, retail/wholesale/eCommerce, and distribution to risk management, law enforcement/legal, and logistics. The organization was created in 2014 to promote, educate, and advocate supply chain security and protection through building strong networks and delivering exceptional leadership training, board representation, and industry support. ISCPO.org

 

For more Information, contact:

Byron Smith

ISCPO Vice Chairman

(469) 215-8184

byron.smith@iscpo.org

 

 

DCVelocity interview with Scott Cornell – Changing Face of Cargo Theft

Article originally published at DCVelocity: http://www.dcvelocity.com/articles/20180720-the-changing-face-of-cargo-theft–interview-with-scott-cornell/
THOUGHT LEADERS | THE DC VELOCITY Q & A

The changing face of cargo theft: interview with Scott Cornell

The changing face of cargo theft: interview with Scott Cornell

Cargo theft and protection is a cat-and-mouse game over some valuable cheese, according to Scott Cornell of Travelers Insurance.

By Mark B. Solomon

Scott Cornell of Travelers InsuranceWhen it comes to cargo theft, there is good and not-so-good news. According to security consultancy CargoNet, nationwide incidents of cargo theft last year declined 17 percent from 2016 levels. Yet there were still more than 700 reported incidents last year, involving $89 million of stolen goods. Many more incidents were believed to have gone unreported. The bulk of the thefts occurred over long holiday weekends when drivers take extended breaks and often leave their rigs and cargo unattended.

Businesses are getting smarter, but so are thieves. Shortly after Memorial Day, Scott Cornell, transportation business lead and crime and theft specialist for Travelers Insurance, spoke to Mark B. Solomon, executive editor-news for DC Velocity, about the most current trends in cargo theft and what businesses can do to protect themselves from an expensive loss down the road. 

Q: Do you have a read on theft activity over the holiday weekend?

A: This year’s weekend wasn’t the worst we’ve seen in terms of number of thefts, though it was slightly above the average weekend. During holiday weekends, it’s important for shippers, carriers, and brokers to make sure shipments are secured and to educate drivers on cargo theft tactics and prevention methods. It would be ideal to avoid leaving loads unattended. However, when that’s not an option, we recommend a layered approach to protecting shipments. This includes good processes and procedures, staff and driver education, and physical and technological security enhancements.

Q: Five or six years ago, most thefts were yard heists and inside jobs conceived by ex- or current employees in the distribution center. Given the abundance of digital tools and thieves’ mastery of them, is the traditional scenario still commonplace?

A: What we call “straight” theft is the most common type of theft, and it happens most often at unsecured locations. However, evolving technology has contributed to a rise in strategic theft, such as identity theft and fictitious pickups, by helping thieves identify their targets and find new ways to trick people. It’s important not only to use physical security to protect loads, but also to have strong practices in place for protecting critical information and defending your company from cyber-based threats. Having this type of protection in place for virtual threats is just as critical as the physical protection needed around a yard or for a load in transit.

Q: Over the past five years, how have these tactics evolved? What has changed about the way they are executed?

A: Strategic theft methods have changed over the years. There was a time when we primarily saw two tactics—identity theft and fictitious pickups—but in recent years, we have seen more than a dozen different methods used. These types of cargo theft involve the use of fraud and deceptive information intended to trick shippers, brokers, and carriers into giving the load to the bad guys instead of the legitimate carrier. Organized cargo groups now use strategic methods such as double-brokering scams and “ghost trucks,” and they will even trick legitimate trucking companies into picking up the loads for them. Additionally, thieves will combine two or three methods to further complicate things. Victims may not be able to tell how they’ve actually been hit.

It is important to thoroughly vet all carriers and brokers through the Federal Motor Carrier Safety Administration (FMCSA), Internet search engines, third-party vetting companies, and industry associations. Work closely with shippers to confirm driver identification at the point of pickup, and don’t hesitate to contact your customers and business partners if there is any question or concern. Often, the additional scrutiny will deter thieves from pursuing the load in question.

Q: Freight brokers and third-party logistics service providers (3PLs) play key roles in procuring truck capacity for their shipper customers. Do you find these intermediaries are up to speed on anti-theft strategies and tactics?

A: It depends on whom you are talking about. Some larger brokers have dedicated teams with very detailed vetting procedures and security teams that can respond if they have a theft. Others may not have the same awareness or necessary procedures in place or dedicated resources needed to respond because they haven’t yet experienced a theft.

Q: It’s been said that freight posted on spot market loadboards becomes a target as soon as it is visible. Loadboards are getting more traffic today as spot market demand remains very strong. What are the security holes in loadboard freight and how can they be fixed?

A: Loadboards are as much a victim as the shippers and carriers in this situation. They are being taken advantage of while trying to provide a valuable resource and service, and there’s only so much that can be done to stop it. Some boards restrict membership, but even that can be worked around, and when bad guys do get through, it’s simple for them to profile a load to target.

In this situation, it’s important for users to exercise caution when coordinating through these boards. There are some steps they can take to help keep a shipment safe: First, establish strong pickup security policies and procedures. For example, require the driver to have a specific and secure pickup number to gain access to the load. Second, ensure everyone involved in the haul is who they say they are. This also goes for the freight broker assigned to choose the carrier. Third, check if your insurer offers the right coverages for these perils and has the resources to prevent theft issues and recover goods if the worst happens.

Q: You said at a recent conference that thieves will “go to the well until the well goes dry.” Does that mean they will leverage the same scenario until they are stopped? How do shippers and carriers combat this?

A: Thieves know what they’re doing. If they know they can target a specific company with good cargo and insufficient preventive measures, they’ll do so until someone stops them. But they’re also smart enough to move on when law enforcement or the targeted company starts cracking down. We’ve seen several shifts over the years where law enforcement will be on the lookout for one type of theft, and in response, thieves will shift their tactics to evade detection. Similarly, we’ve seen thieves make sudden geographic shifts when they realize they’ve attracted too much attention in one area. For example, we’ve seen California-based crews move to Arizona, Utah, or Washington to evade detection. This creates a Whack-a-Mole effect.

Q: How much theft can be deterred just with common sense, such as fully vetting a carrier before providing pickup information? Or is that easier said than done?

A: Cargo theft doesn’t take only one form, and neither should theft prevention. I can’t stress enough the importance of taking a layered approach to protecting loads. Remember, processes and procedures are free, and they are often the best methods to prevent theft.

3 Ways Carriers Can Demonstrate Competency in Maintaining Cargo Integrity

Ask your carrier these three questions…

Businesses moving goods through their supply chain have two choices, transport it themselves or outsource it.

Transportation is typically one of the largest expenditures within a Supply Chain operation. Most businesses choose to contract out at least a portion of their delivery volume, allowing them to realize immediate savings from not having to maintain a fleet of vehicles, routers, dispatchers, DOT regulatory, driver recruiting, training, insurance, and a multitude of other costs. However, some degree of uncertainty with regards to cargo loss, damages and service deterioration are unrealized costs that must be contended with when relying on a third-party to transport your goods. While the decision to outsource is usually a no-brainer, the challenge for Loss Prevention professionals becomes how to best manage to this risk without increasing costs beyond operational savings.

Transportation leaders and their Loss Prevention counterparts should be equally focused on transport expense & performance. The difference however is that Transportation leaders are accountable to their organization for quality of service and invoiced expenses or “today’s costs” while Loss Prevention typically assumes risk mitigation tactics for cargo loss and other liabilities or “tomorrow’s costs.” Regardless of focus, both teams need to feel confident that their service providers can demonstrate competency in maintaining cargo integrity and performance. So how can service providers accomplish this?

Carriers listen up! There are usually 3 basic qualifiers to be considered “competent” or low risk by your clients. 

1. What are the carrier’s industry certifications?

The first question businesses should ask a potential carrier is “What certifications do you have?” Achieving industry certification is a key competency in maintaining cargo integrity. Embracing industry standards benefits both the carrier and their supply chain clients. It’s essentially assurance that the carrier understands and practices proven prevention controls that when executed correctly will cause clients to trust that their deliverables are in good hands. Here’s why certification matters:

  • It reduces carrier waste or non-operating costs when effective and efficient controls are practiced. Ideally a lower cost operator can pass the savings onto potential clients during an RFP.
  • Carriers can stand confidently behind one set of industry standards that should address most client-specific security demands. Therefore, carriers and clients don’t need to re-create the wheel with proprietary checks & balances or adhoc requests.
  • Overall, it improves audit compliance, reduces risk and minimizes losses for both the carrier and client.

There are many good Industry or Government certifications available, some of which include:

  1. ISCPO Carrier Security Audit Certification – www.ISCPO.org
  2. Good Distribution Practices (GDP) – Certification for pharmaceutical distribution
  3. Lowers & Associates Courier Certification Program – www.lowersrisk.com
  4. CTPAT: Customs Trade Partnership Against Terrorism – www.cbp.gov
  5. TAPA – Transportation Asset Protection Association – www.tapaonline.org

The ISCPO Carrier Security Audit Certification – International Supply Chain Protection Organization [ISCPO.org] has developed a free certification for the final-mile carrier which defines the standards most important to the client’s Loss Prevention department. The ISCPO has defined various security standards necessary to ensure the integrity of goods flowing through one’s extended supply chain. The Carrier Security Requirements is a document fundamental for all “final-mile” carriers and provides the standards most relevant to the losses suffered by businesses today.

 

2. Does the carrier have In-House LP Leadership?

Carriers need to invest in hiring a Loss Prevention head to evolve training, auditing and investigatory programs. The carrier must invest in capable personnel who are trained to prevent loss occurrences and reduce their impact should they occur. Too many times untrained or unexperienced personnel chase losses underground, only to see resurface again at a later time. This not only results in a significant waste of the carrier’s time and money but also frustrates clients. Without the experienced Loss Prevention practitioner to maintain vigilance, inadequate training and audit compliance comes at a cost too through unsustainability and repeat failures. By having in-house LP support, clients have trust that the carrier is committed to a culture of prevention and compliance. Client Loss Prevention teams come to rely on colleagues who speak the same language in terms of training, audit and investigation.

 

3. How does the carrier establish a culture of transparency and responsiveness when engaging with client issues?

Customer service is always a #1 priority with any client in any industry. It is critical that clients feel they have complete transparency in understanding how the loss occurred and appropriate corrective action plans. This goes hand-in-hand with having an in-house LP Practitioner as outlined previously but all too often operational or sales support may try to more positively spin the results of their investigation without addressing the true factors or controls that either failed or were never put in place. Clients expect accurate fact-gathering and reporting without omission while trying to respond back to their customers for the failed deliveries. In other-words, clients are accountable to their own customers in Ecommerce, Pharmacy, Banking, and other industries so carriers need to be cognizant of the end-customer demands for the products they’re delivering. This is a systemic issue in LP that spans all facets of the carrier’s business, from sales, technology, and logistics.

So the next time you are going through the RFP process, I strongly encourage you to speak to the above areas for optimal consideration. I know that I will be inquiring.

 

Wes Bank, LPC is the Director of Loss Prevention for DHL eCommerce, overseeing risk management, government regulatory, audit, investigations, and physical security. An active ISCPO (ISCPO.org) Board Member, (currently serving as Secretary), he founded and chaired the ISCPO’s Carrier Security Audit Committee with the objective to improve “final-mile” carrier compliance.