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Mitigating Risk Within Your Supply Chain
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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
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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
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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
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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
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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).
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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”.
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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?
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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
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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
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• 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