#ISCPO2019 Conference Re-Cap

Day 1:

After a great evening of food, drink and live music at the cocktail meet and greet, Chairman Byron Smith kicked off day one with opening remarks,  thanking the solution providers and attendees for joining the 2019 conference. He addressed where the organization is heading in 2019, with a focus on eCommerce Security.

Watch for future webinars and podcasts. Byron took time to thank former Chairman Rod Fulenwider for his leadership during the past two years and he was recognized with the ISCPO Award of Excellence.  Rod also surprised the audience by presenting Smith with the 2018 Chairman’s Award with the assistance of his direct supervisor Art Lazo, 7-Eleven’s VP of Asset Protection.

Speaker Round-Ups:

Keynote Speaker, Albert Shen make a big impact, sharing with the attendees the Mobility Revolution, Smart Cities & Global Perspectives. Our next speakers Heather Nickerson with Red Five Privacy Labs and Paul Kurtz with Tru-Star addressed Cybersecurity in the Supply Chain. Larry Kivett with Deloitte Risk & Financial Advisory shared Fraud in the Supply Chain – Fraud/AnalyticsBill Mathis, the Operational Security Specialist with Daimler North America presented Automotive Manufacturing Security. Our final session, Labor Shortages in the Supply Chain was shared by Rustin Tonn, Regional Human Resources Manager with Pitney Bowes.

Special Donation

The ISCPO present the Loss Prevention Foundation with a donation of $2,000.00 for the Loss Prevention Benevolent Fund.  Find out more about the program.

“It’s the education of bringing security and supply chain together that I don’t find anywhere else.” Jeanne Heidtke, Supply Chain Security Manager, Wolverine Worldwide, INC

DAY 2:

ISCPO Chainman Byron Smith kicked off the second day of the conference with opening remarks and reflections from day one. The attendees share some great feedback on day one’s events.

The first session of the day was the panel discussion on Global Fulfillment lead by Rod Fulenwider with panelists Glenn Master with Pitney Bowes, Howard Stone with Amazon and Bill Atwell with Neiman Marcus. Our second session had Stephen Tracy with the USPIS discuss the Fentanyl, Opioid and Precursor Chemical Smuggling Schemes out of China which sparked a great deal of conversation with the attendees. Gene Maddox III, Sr. Manager International Security & Corporate Security (HDQ) with American Airlines shared with the attendees Ecommerce Partnerships during our third session of the day. The conference’s final session of the day had Terry L. Boling, President of Watchpoint and MJ Giorgi, VP of Development of Watchpoint cover Loss Prevention Vs. Loss Reaction: Utilizing Data and Controls to Impact Investigation.

 

Chairman Smith invited the Board of Directors to join him on stage to help close out the 2019 conference. The possibility for break-outs sessions at future conferences was encouraged by the attendees and group meeting opportunities to review growing safety issues were a couple of points raised.  Smith also shared the social media platforms that ISCPO uses today and reviewed the new podcast program launched in 2019.  He thanked the solution providers and the attendees for their participation and expressed that he felt this was the best conference to date for the organization.

Over 30 attendees took advantage of the Amazon Fulfillment Facility tour and the ISCPO Team thanked Amazon for allowing the attendees the opportunity to see behind the scenes. Big thanks to the 7-Eleven SSC for hosting the 2019 ISCPO Conference!  See you in March 2020 for #ISCPO2020.

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Thanks to our Sponsors

We thank all our participating sponsors for coming out to educate and network with the attendees.

“We believe that supply chain protection is one of the most important things in this industry and its really why we developed this company and came into this industry.” – Dereck Middleton, 7PSolutions

I think the solution providers give the attendees an excellent opportunity to see the product that they are offering and take it back to their companies.” – Terence Wilkerson, Investigations Manager, GAP

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.

ECommerce-ISCPO

The Fallout of Holiday Peak: Three areas where the LP industry is failing

Retailers need better planning and an improved infrastructure to support the changing habits of the retail customer.

As we all are well aware, the holiday shopping season seems to be starting earlier with each passing year. It was October 21st when I saw the first commercial advertising for the 2017 holiday season. To my surprise, however, I didn’t see many stories this year about people camping out for a week in the parking lot of a store waiting for the best Black Friday deals. There could be any number of reasons for this, but what we do know for sure is that retailers are now providing more options to consumers earlier in the shopping season than in previous years.

While holiday shopping patterns in retail stores is something we may all notice, there are other areas within the business that may not be as visible to the customer, but just as impactful on the business. The one thing that I have witnessed firsthand is how this new strategy is affecting the supply chain. “Peak,” as it is referred to, is the time leading up to Christmas when holiday order volume increases dramatically. That’s roughly fourteen weeks of what is now becoming pure chaos for logistics providers.

The official numbers for the 2017 peak season have yet to be tallied, but based on projections this is going to be a record season for retail, with a large percentage being attributed to online sales. While overall this may be good for business, this is nonetheless having a profound impact on the domestic supply chain because the infrastructure supporting all these parcels simply cannot keep up with the volume of products being shipped.

Here are three key areas where the industry is failing to keep up with the changes in holiday shopping habits and some basic steps that can be taken to solve this growing problem.

 

Volume Projections: It’s a guessing game

Most retailers have analytic models that produce estimated volume projections to determine the number of orders that will be passing through the supply chain network. This information is passed on to its contracted transportation providers, allowing them to plan for the staffing models necessary to handle the anticipated product volume.

Despite all the computer analytics being used, the one thing that cannot be easily forecasted is how online ordering can be affected by the unpredictability of human behavior. This is especially true from Thanksgiving Day through Cyber Monday. In talking with my loss prevention peers in both retail and transportation, consumer sentiment was grossly under-estimated going into the 2017 holiday season. So, regardless of the current political atmosphere, the federal reserve raising interest rates, or the potential that North Korea may launch a nuclear bomb, U.S. consumers were ready to spend money this holiday season.

This buying atmosphere creates both a positive and negative scenario for businesses in the supply chain. The obvious positive results in an increase in revenue. However, a less-than-ideal result follows when unplanned volume cripples the infrastructure that moves parcels along the supply chain. This would be the equivalent of a dam breaking 50 miles up-river with all the towns down-river being flooded as a result—except the flood comes in the form of packages.

SOLUTION: To avoid this type of catastrophe from occurring again, retailers must do a better job of preparing for a potential spike in online sales and projecting product volumes in real-time. This may be challenging since most of these online orders are being placed during the Thanksgiving holiday when the majority of corporate America is out of the office. One solution would be to have retailers streamline the flow of information to logistics providers by providing daily volume-trend monitoring that is communicated immediately to transportation providers.

 

Transportation, bottlenecks and a tangled infrastructure

The majority of retailers that do business online don’t have their own transportation infrastructure. This means they have to contract out transportation companies to move freight. 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. 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.

What this means is that everyone is ultimately contracting with everyone else and parcels can easily transit multiple companies before reaching your doorstep. With each touch point is an exposure to a parcel being lost or stolen.  It is difficult to investigate losses in this network when volumes are normal. Add 50 percent or greater volume in a very short time span and investigating loss becomes nearly impossible.

Some of the contributing factors to this loss include lack of management oversight, mis-shipped packages, and theft that is camouflaged due to operational failures. It is critical for transportation providers to be able to plan and manage this volume appropriately.

SOLUTION: The most common areas where loss occurs during peak is during the morning launch of drivers. This is when the terminal has the most amount of freight on the floor and the least amount of management oversight. Transportation managers should also focus on conducting spot audits of drivers prior them launching. This will not only keep the drivers honest but also allow management to find mis-loaded packages that occurred by mistake.

 

A Tight Labor Market

The labor market in the supply chain has increasingly become very tight. If you look at any major fulfillment or distribution company, everyone is fighting for the same contracted employee. This becomes a booming industry for staffing agencies, but also poses a challenge for them on finding suitable people to fill open positions.

To try and gain an edge, we are now seeing companies during peak season reducing or even eliminating their applicant screening process to get employees in the door. This may result in your contracted labor having criminal backgrounds, financial issues or drug problems. In year’s past, jokes would be made in the loss prevention community that staffing agencies are resorting to hiring people on the steps of county jails after they bond out from a weekend incarceration. In recent times, these types of jokes are becoming more a reality.

SOLUTION: Enforce your background check process instead of skipping this important activity. Reducing or eliminating the background check process can have major impacts to your organization resulting in lower productivity rates, criminal activity within your operation and a greater likelihood of theft.

 

The Future

People say there are no guarantees in life. I tend to disagree as it relates ecommerce. The trend has been and will continue to be unprecedented growth. With this growth brings numerous challenges to an infrastructure that was not designed to move millions of packages in a short time period such as peak. Without substantial investment and planning Peak Season in 2018 will be just as challenging for industries that are tasked with getting that holiday gift to the consumer.

 

Glenn is the Co-Founder and inaugural Chairman of the ISCPO. He currently is employed with Newgistics as the 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 Bachelor’s in Criminal Justice from the University of Texas-Arlington.

 

 

Two FREE Whitepapers Every Loss Prevention Manager Should Read

Staying current is a must in Loss Prevention. Whether you work in retail, logistics, or transportation you’ll get the latest stats, strategies, and best practices after reading these free white papers.

Logistics Management: An Evaluation of Warehouse Operations & Trends

Logistics Management Whitepaper

This 42-page report features all the data gleaned from its readers in this year’s Warehouse Operations & Trends Study including:
•Nature of distribution center’s operations
•Size of distribution center and scope of distribution activities
•Areas for possible expansion
•Distribution center systems and technologies in use
•Means for measuring productivity
•Actions taken to manage warehouse operating costs
•Events that cause disruptions in distribution center operations

Download the full report from Logistics Management

ISCPO

LPM Special Report on Supply-Chain Security: Trailer and Warehouse Theft, Investigations, and Loss Prevention Tips from the Experts

Our friends at Loss Prevention Magazine recently asked Glenn Master (ISCPO board member and former Chairman) and John Tabor (ISCPO board member) how organizations can anticipate, prevent and investigate cargo theft as well as maintain logistics protocols that mitigate risk when it comes to supply chain security.

This in-depth, expert guide takes you through supply chain security and solutions where you’ll not only learn how theft occurs, but also where and when, and how you can fight it. You’ll…

  • Understand the threat to your organization that cargo theft represents
  • Master the details of the entire supply-chain process
  • Get up to speed on the LP pro’s role in stopping loss
  • Pinpoint those stops along a shipment’s way where the danger is greatest – including your own distribution center
  • Integrate supply-chain security knowledge into your day-to-day responsibilities
  • Establish practices, processes and a company culture that will save your organization millions of dollars, and put your career on a fast track to success

Download the full report at LPM

 

ISCPO