The Link Between Physical Security and Supply Chain Success!

Physical Security

70% of companies believe that strong supply chain management is the driving force behind exceptional customer service, while 57% believe that supply chain management gives their company an edge over competitors. Supply chains are an essential part of a fast-moving global economy.

Physical attacks on supply chains generally cause disruptions that can have long-lasting consequences to both reputations and finances. Physical security may seem like a given, but its importance cannot be overstated when considering manufacturing, logistics, transportation, and distribution.

2022 saw losses of $223 million across the United States and Canada due to a 15% in ‘supply chain risk events’ and a jump of 20% in cargo theft according to  Supply chain attacks impacted 62% of companies as well, clearly indicating the need to prioritize supply chain physical security strategies through the identification and analysis of common and emerging risks.

What Is Physical Supply Chain Security?

Physical supply chain security refers to the strategies and actions used by businesses to protect supply chains from vulnerabilities and risks. This may include everything from natural disasters and theft to acts of sabotage and terrorism.

The goal of physical security is to protect the flow of goods during every stage of the supply chain so that they successfully arrive at their intended destination on time and safely. Physical security guarantees the protection of physical goods.

For physical supply chain security to succeed, all potential weaknesses and vulnerabilities must be identified including within transportation networks, supplier relationships, and the integrity of employees. Clear communication between all involved parties, such as manufacturers, suppliers, distributors, transporters, and retailers, must be maintained to ensure accountability and transparency.

Successful physical supply chain security can aid in reducing the costs associated with disruptions, thus improving a company’s reputation and overall customer satisfaction but it does present challenges.

Complex, interconnected global supply chains offer numerous vulnerabilities further complicated by the emergence of evolving cyber threats. Security policies, risk assessments, safety procedures, auditing, and advanced security technology paired with training are the foundation of efficient physical security for supply chains.

The Importance and Impact of Physical Security on Supply Chain Success

The physical security of supply chains is vital for business growth and stability. It ensures that operations proceed unhampered and can contribute to a company’s reputation for reliability leading to increased profits. When physical security is not prioritized, financial loss, legal issues, and damaged reputations may be the end result.

Supply chains can vary significantly depending on the type of industry and the number of organizations involved. Physical risks include both internal and external bad actors and can range from theft and sabotage to terrorism.

Tracking shipments and following the paper trail, running background checks on personnel, and arranging unscheduled external audits are traditional methods for mitigating physical attacks and protecting staff and supply chains from physical attacks against facilities and assets.

Considering the variables in supply chain security, there is no single strategy that can protect every situation. Multiple components will need to work together to ensure the security of products during their journey to destination and this requires identifying threats, risks, and vulnerabilities and creating strategies to mitigate them.

Physical Security Strategies and Tools for Supply Chain Success

Security technology has significantly improved supply chain visibility thanks to tracking, inventory updates in real-time, product locations, and establishing delivery times. These tools also aid in foreseeing and preventing eventual delays, disruptions, and consequential shortages.

Access control on loading docks and CCTV in warehouses can prevent tampering and theft. Regular auditing of supply chains can identify weaknesses where improvements need to be made. Evaluation and analysis can increase efficiency from product procurement to delivery.

Identifying issues in sourcing materials, storage warehouses, and transportation methods together with employee management is crucial to physical security success and consequently supply chain success. Supply chains cannot be managed successfully without excellent physical security. 

In Conclusion

The implementation of a physically secure supply chain requires planning, the coordination of the activities of all stakeholders, and above all, ongoing vigilance to traditional and emerging threats to product brand reputation and its future profitability. In an increasingly global marketplace, secure supply chains are critical to any company’s financial success. Security breaches can be disastrous for brand credibility as well as  financially ruinous.  

An effective approach to supply chain physical security requires recognition and in-depth analysis of vulnerabilities. Advanced technology such as IoT sensors and blockchain together with inventory management, transparent communications, and regular risk assessment can significantly improve supply chain security and continued business success. 

Solid physical security can aid in reducing waste, increasing efficiency, protecting against disruptions and losses, and achieving customer satisfaction because delivery times are both predictable and reliable. An investment in supply chain security is an investment in your company’s future. Safeguarding today’s supply chain guarantees tomorrow’s business.

Article and permission to publish here provided by Emma Williams. Originally written for Supply Chain Game Changer and published on August 16, 2023.

Cover image by edwardbrownca from Pixabay