Archive for July, 2009

Important Announcement to All C-TPAT Members

Monday, July 27th, 2009

This is a very important announcement sent to all C-TPAT members by the U.S. Customs and Border Protection Agency.  Supply Chain Solutions takes its commitment to the principles of C-TPAT certification with the utmost seriousness. We have taken this announcement under advisement and will continue to hold ourselves, our partners, and our carriers to the highest of standards.  Thank you.

C-TPAT Members:

As we maintain our vigilance against extremist attacks originating from locations far from our borders, we must also recognize that many threats we face are much closer.

Over the course of the past few months law enforcement on both sides of the US/Mexico border have made several large narcotics seizures involving commercial shipments linked to C-TPAT members. The seizures have occurred across the entire southwest border and involved both dry goods as well as fresh produce. In most cases the narcotics were commingled with the commercial merchandise. Of particular note is that in many instances C-TPAT members were utilizing the services of non-C-TPAT service providers.

CBP reminds members that they are expected to use C-TPAT partners to the extent possible and to conduct extensive screening of their non-C-TPAT business partners. Members must have written and verifiable processes in place to ensure this screening takes place on a consistent basis. Given the current threat from Mexico, non-C-TPAT business partners must be afforded higher levels of scrutiny. C-TPAT members are expected to verify the security measures being utilized.

Comprehensive reviews of recent events have clearly identified two primary causative factors having enabled supply chain security breaches;

  1. Companies had established security procedures in place yet failed to follow them.
  2. Lack of corporate oversight ultimately resulting in significant levels of subversion of established supply chain security procedures via internal conspiracies.

It is imperative that C-TPAT partners perform internal risk assessments to identify inherent threats to supply chain corridors and augment established security procedures accordingly. We have taken this opportunity to identify other causative factors which you may wish to consider as you evaluate the risk factors unique to your supply chain and further, the steps that you can take to mitigate these risks. Areas of consideration include:

Ensuring there is adequate oversight and accountability of the cargo loading and sealing process.

Employing the use of cameras and/or other suitable monitoring devices or processes at the cargo loading areas.

Ensuring that all conveyance hardware and fastening devices are inspected for overall security and deterrence of unauthorized access. Where deficiencies are present, steps must be taken to mitigate the risk and/or harden all fastening/access devices.

Consider the use of more stringent security devices to secure trailer doors.

Audit and verification of employee screening processes, to include periodic reviews.

Consider rotating personnel assigned to operationally sensitive positions, such as dispatcher.

Review the established processes for oversight of the transportation component. Areas of potential weaknesses and vulnerability should be assessed. Specific attention and focus should be provided towards addressing potential delays and/or opportunities for security breach.

Members should work with service providers to develop written and verifiable procedures to track conveyances from the point of origin to the final destination.

Establishment of route times from the manufacturing site to various points in the transportation flow will help monitor and ensure that drivers are arriving at designated locations within established time parameters.

Members should work with service providers to develop written and verifiable procedures to address those instances that a driver does not check in within established time parameters. Drivers should not be allowed to make unauthorized stops.

While the focus of this security bulletin is directed toward operations along the South West Border of the United States, all C-TPAT members are highly encouraged to take this opportunity to review their established security processes. Continued supply chain security is dependent upon your continued vigilance.

You are encouraged to contact your assigned Supply Chain Security Specialist to discuss ways in which your company can help CBP address this issue or if you have specific concerns that need to be addressed.

In closing, the program relays its continued appreciation of your diligent and continued efforts in securing the international supply chain.

Bradd M. Skinner

Director

C-TPAT/ Industry Partnership Programs

U.S. Customs and Border Protection

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Collaborative Logistics and the Creation of Business Value

Monday, July 27th, 2009

 Collaborative Logistics and the Creation of Business Value

By: Les G. Brand

With volatile forecasts for many industries, manufacturing companies are finding unusual ways to reduce costs, eliminate waste and emissions, and maintain their stability. Logistics has become a growing area of interest, as made evidenced by BIFMA’s recent formation of a committee dedicated solely to supply chain management.

I am privileged to have been a part of an industry-first project, where two competing companies have partnered to create business value through the modification of their supply chains – working together to share resources and save time and money.

This project is proof that collaborative logistics is not a fancy buzzword. It is very real, and its proper application can save companies hundreds of thousands of dollars.

Working closely with Steelcase, we approached Haworth with the idea of collaboration. Although both companies’ logistics specialists knew that closer scrutiny of their logistics and transportation expenses would help their bottom lines, approaching and responding to a competitor about a collaboration project isn’t the easiest thing to do. It’s quite innovative, and we applaud both companies for breaking tradition and finding the value to move forward.

With the help of Supply Chain Solutions, Inc., Steelcase and Haworth identified that many of their loads were not moving from supplier to manufacturer at full capacity. Because both companies use many of the same materials in production and have a common supply base, it became evident that working together to share inbound logistics costs could eliminate waste in their supply chains.

It’s often been said that war makes strange bedfellows.

We began by piloting a cost-savings program in the Midwest. By reviewing supplier locations, and frequency of trips, this was further narrowed down to the route between West Michigan and Eastern Wisconsin. In addition, custom software for both companies was quickly put in place by Supply Chain Solutions, and was critical in allowing both companies the visibility necessary to see exactly where products were located throughout the process.

As we worked to extract information from both suppliers and carriers, we knew that the program hinged on making the transportation change seamless to both Steelcase and Haworth. The challenge was coordinating the efforts of multiple parties to achieve cost savings. It went much deeper than just negotiating lower costs with carriers – we actually changed the way that business was conducted.

Working with suppliers and carriers from both Steelcase and Haworth, we received their advance shipping notices directly and analyzed them for collaborative opportunities. If a shipment could be re-worked to save money, our team would review all of the shipments along the route and look for opportunities to build fuller loads.

Three major areas were affected by this process: 

  1. Improved Lean Processes. The efforts for both companies resulted in a just-in-time strategy that kept inventory low.
  2. Elimination of waste from supply chain. Before collaborating, it was not unusual for Steelcase or Haworth to have trucks on the road that were underutilized by 30-70%. Wasted space equaled wasted dollars.
  3. Maintenance and improvement of Service Levels.

After realizing nearly 40 percent cost savings, Haworth and Steelcase considered the pilot project a success. The results have prompted another company, Trendway, to join in the collaboration. We expect the savings to be maximized when up to five companies traveling similar routes are involved.

While collaborative logistics is merely one facet of the supply chain management process, it is one in which results can be added to the bottom line almost immediately. As companies realize the opportunity to combine loads, reduce inventory and negotiate with their existing suppliers and carriers, the potential for savings will be unmistakable.

The success of the initial collaboration pilot program has prompted Supply Chain Solutions  to expand the collaboration initiative to the rest of the West Michigan business community.  As we take the first precarious steps towards a West Michigan Freight Collaboration Consortium, Supply Chain Solutions, along with Haworth, will be selectively seeking companies in the area with which to partner. These initial companies will help to establish the consortium, and in turn, stand to reap the benefits of drastic reductions in their transportation spend.  Stay up to date and follow our progress as we work to promote collaboration AND business value among companies right here in Western Michigan, on our blog or on twitter at screen name SCSolutionsinc

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