Time to get over the 'secure means costly' mindset

Implement supply chain security correctly and it won't be an unwanted cost, say two executives in the risk management business. Correspondent Phil Hastings reports.

Many organisations around the world are still not buying into the idea that investment in better supply chain sec-urity should be seen as an opportunity for value enhancement rather than as just another unwanted business cost.
Confirmation of that picture was provided by the TT Club, a leading provider of insurance and related risk management services to the international transport and logistics industry, and ICHCA International, an organisation that promotes safety and efficiency in the handling and movement of goods by all modes, who have just collaborated in the publication of a new handbook designed to "guide all operators in the supply chain on how to enhance value through effective security implementation".

According to the two organisations, the handbook, Supply Chain Security - Management, Initiatives and Technologies, "not only promotes good practice but also explains why security need not be seen as an unnecessary drain on resources and can actually provide a significant contribution to the bottom line".

Asked by Cargonews Asia whether that concept was now widely accepted by companies involved in managing supply chains, Peregrine Storrs-Fox, TT Club's risk management director, said research carried out for the new publication indicated that "probably the balance is towards those who still see enhanced security as a cost - which is one of the reasons we decided to put out the book".

"We wanted to get over the idea that where security is carefully integrated with the management processes and allied to other processes within the operation that's when the benefits will come and there is significant value to be derived from that," he said.

For the moment, though, confirmed Carina Dixon, who chairs ICHCA's International Security Panel, "we are still battling against the mindset that security is just an additional cost rather than something people can actually enhance their business with".

She said part of the reason for that was the fact that security had been forced on everyone following various events around the world over the past few years.

"The approach from people has been to try to comply with whatever they have been asked to do, to put a tick in the box, rather than having a look at security and thinking 'well this is something we need to be doing these days so how should we best manage it, how can we make this thing work for us'."

Storrs-Fox outlined several other factors that he felt were behind the unwillingness of many organisations to take on board the argument about security being seen as a value enhancement opportunity rather than an unwanted cost.

One was the fact that a lot of the supply chain security focus post 9/11 had been on the "dirty bomb'' angle "and I think a lot of people in the industry don't see that as very much of a real potential so to some extent they see a flawed logic in why security is such a big issue".

Another factor, he agreed, was the continuing disparity in security regulations and enforcement around the world. "That has made it more difficult for people to sign into the idea that improved security is something which really is going to bring them value and deliver some sort of level playing field."

He suggested wider adoption of the ISO 28000 standard called Specification for Security Management Systems for the Supply Chain, which could have a role to play by providing a benchmark for compliance with any of the security regimes in the world.

"The standard has been designed to incorporate most of the requirements of the various security regulations and initiatives now in force, so by adopting ISO 28000, operators will automatically be complying with these regulations - it's a sort of security one-stop shop," he said.

Dixon said ISO 2800 was a very good way to go for supply chain operators, large or small, global or local, "because it makes you look at security as part of your operations, not as something in isolation that you have to do".

"That for me is the key thing as security is often ineffective because it is not given the position within the business that it should be."

In the longer term, added Storrs-Fox, being certified to ISO 28000 was likely to deliver competitive advantage. "Customers will be more inclined to contract with those who are following good practice in security matters. It will demonstrate to customers, business partners and employees a company's commitment to effective security practices and the protection of their personnel, goods and assets."
(Source:www.cargonewsasia.com)