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Mitigating Risk Within Your Supply Chain

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Mitigating Risk Within Your Supply Chain

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Mitigating Risk Within Your Supply Chain

  1. 1. 6/28/2017 1 Mitigating Risk Within Your Supply Chain Mike Combs, Director, Supply Chain Asset Protection, The Home Depot, Maurizio Scrofani, VP, Supply Chain & Intelligence, Alto US and John Tabor, SVP, Supply Chain, National Retail Systems, Inc. Mitigating risk Within your supply chain
  2. 2. 6/28/2017 2 Transportation loss is a multi billion dollar global problem The US Contribution to the Billion Dollar NUMBER Whether we agree that cargo theft is between *$15B- $30B or not, at the end of the day we would still react accordingly and work toward managing this “defect” *Resource: http://www.fbi.gov/news/stories/2006/july/cargo_theft072106 $15B-$30B What continues to be the problem? Heavy consultant arena The solution providers area is very deep by vertical (seals, CCTV, telematics ,data aggregation, routing engines, etc.) Law enforcement funding Task forces are continuing to lose funding and growing concern that we may begin to see more of what happened in Miami w/ the T.O.M.C.A.T.S. (disbanded) Fragmented data/information There are multiple databases that hold specific data elements but not all hold everything that is needed for complete connectivity. In addition, information sharing still has its roadblocks (re: complete transparency of data sharing) Legislation/Penalties Today the incarceration time for stealing a $2MM cell phone shipment is far less than the average bank robbery of $3.5M
  3. 3. 6/28/2017 3 What is the profile? • States that dominate are: CA, NJ, IL,TX,FL,GA, TN & PA • Commodities that dominate are: electronics, food & perishables, base metals and apparel • Days of week that dominate are: “THE WEEKEND” • Areas that dominate are: truck stops, warehouse/DC, parking lots and unsecured yards Resource: CargoNet and SC-Integrity Losses at a Glance
  4. 4. 6/28/2017 4 Truck Freight Flows - All CommoditiesPopulation Density Cargo Theft Data Census Department of Transportation Overlay Who suffers? Ultimately, The Consumer Trucking Company Shipper & Brand Owner Driver & Owner Operator Insurance Companies On multiple fronts
  5. 5. 6/28/2017 5 Retailer’s Challenges • We don’t all have our own fleets (tractors). We use third party trucking companies and their drivers or owner operators as drivers. • Selection becomes key. • We move goods in every possible way and mode from every possible location in the world to get to our customers’ doorsteps. • Air, Water, land • FCL,FTL,LCL,LTL, Parcel • Multiple Continents and multi-continent consolidation. The “Big 2” For discussion purposes, lets assume we are all on USA mother soil ONLY and we are moving our shipments on land ONLY: Type of freight that is being moved (commodity or novelty) • Usually the Routing systems are focused on cube, cartons and weight and not product profile or total cost. (fragrance vs apparel) • Usually the ship windows are too wide to the ETA windows are too flexible. Mode Selection (Full truck load, less than truck load, parcel) • There is a vast difference between FTL vs LTL as there is an increase in touches. Indemnification and Liability (vendor <=> carrier <=> retailer) • There continues to be a discussion around who owns the claim when there is a variance w/ shortages that make up more of the lost dollars in the market than actual full truckload losses. • Purchase order information (denotes payment terms to offset liability).
  6. 6. 6/28/2017 6 For discussion purposes, lets assume we are all on USA mother soil ONLY and we are moving our shipments on land ONLY: Origin and destination assessment (Lanes) • Usually the procurement or transportation departments focus on cost vs. risk • Usually we are not pulled into the discussion • Usually there is NOT a supply chain asset protection department in our enterprise Tender selection (driver & carrier) • We are not engaged in vetting drivers as that falls under the carrier(s) • We have to ensure our best practices are not misinterpreted as direction (co-employment call out) • We are usually NOT part of the carrier contract negotiations and selection We need to see it all and make better decisions • Lets acknowledge that we can’t go wide and deep on everything that is retail. • Let’s acknowledge that we need to continue to learn to maximize our data and the data feeds that can assist us. • Let’s acknowledge that there are strategic partners that have a very deep understanding of specific verticals we would like to master. • Let’s acknowledge that there are providers outside of our wheel house that have access to, “what we don’t know that we don’t know”.
  7. 7. 6/28/2017 7 Carrier Selection Driver Best Practices Contract Language Risk Minimum Standards Contract Language Best Practices Risk Minimum Standards Load ProfilingLoad Profiling within your tender management system Lane Risk Managemen t Program Module rules within your Transportation integrator Module rules within your Transportation Departments proprietary system or 3rd Party integrator Welcome Center Operations (In-gate/Out- gate) Yard Capacity & Dwell (What is in my yard Empty vs. Full) Legacy Yard Management System or 3rd Party integrator Bay Door Management High shortage doors Inbound & Outbound Aggressive Inbound Outbound Audit Program Legacy Yard Management System or 3rd Party integrator Solid GPS Program Solid EDI Standards Information Stored with Transportation integrator Information Stored with Transportation Departments proprietary system or 3rd Party integrator IP Based CCTV System Mobility Tablet Team Data stored via cloud or server? Encrypted at rest and in motion? Where the data repositories are domiciled today? Core Transportation Driver Vetting Carrier Vetting During GPS/EDI View/track Route Planning Reconciliation Post Scoring Key rec POE Signature verify Load Certification Audit/Audit Verify • Data capture • Data scrub • Data amalgamation • Data repurpose • Data Analysis Scoring Load Assessment Scoring Scoring Scoring “Data Democratization” “Make the hard stuff…. Easy” and share what you can. Goal – integrate, score and predict?
  8. 8. 6/28/2017 8 Let’s Recap… • We know the problem • We are fighting through the retail challenges • There is a light at the end of the data funnel so… …HOW DO WE MAKE PROGRESS? We Can Start With… Communication & Collaboration: • Communication ▪ Share intel in a controlled fashion that does not compromise your brand ▪ Share best practices and layers of control
  9. 9. 6/28/2017 9 Collaboration & Resources SWTSC ERTSC SETSC MWTSC MACSCMSCSC CS ATA CSCMP NRF RILAOOIDA TLCA NATSO TLP & SAFMI Federal Regional State Local Task Forces Sting Operations SCAP Import Division Regional Transportation Security Counsels Store Divisions Solution Providers LE Industry Associations SoftwareHardware We Can Get To… • Partnering with multiple solution providers and begin to bring them together to solve a wide problem vs. a deep problem • Continue to cross pollinate by bringing in talent from other departments and industries • Continue to be the innovators within our enterprise • Become the forced multiplier for share holder value for our organizations
  10. 10. 6/28/2017 10 • Cargo at rest is cargo at risk • Communicate across departments • Communicate across industries • Share intel & best practices • Know your partners (internal and external) • Create a solution for your company by linking your providers product offerings Crib Notes & Take-Aways • Background Checks - GSS • Seals – Sealock, Tyden Brooks,ControlTek • Locks – Instakey, Abloy • CCTV – Stanley, Axis • GPS – 7PSolutions, Rand McNally • Guard Services – SEB, Security Resources • Intelligence – CargoNet, Cap Index • Vetting agent & Risk Mgt Services - Alto Solution Providers

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