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This content is part of the Essential Guide: Key considerations in global supply chain management
Definition

supply chain security

Contributor(s): Sarah Lewis

Supply chain security is the part of supply chain management (SCM) that focuses on minimizing risk for supply chainlogistics  and transportation management systems (TMS). The goal of supply chain security is to identify, assess and prioritize efforts to manage risk by layered defenses in an agile manner. This requires a multifaceted approach to protecting the checkpoints, assets and infrastructures involved with the production of a product. Supply chain security also takes into account the protocols set by government agencies, like homeland security or customs regulations for international supply chains.

The first step in supply chain security is to identify any potential weaknesses in a system. Overall organizational risk management practices should then be adjusted to accommodate and address those weaknesses. Collaboration with a 3PL provider can also help organizations find vulnerabilities and make improvements within a supply chain.

Examples of supply chain security activities

A few examples of security procedures that can be put into place to make supply chains more secure include:

  • Verifying proper credentials for all participants within a supply chain.
  • Screening all of the contents within a cargo that is being shipped.
  • Notifying recipients of shipments in advance.
  • Securing the cargo in transit or storage with the use of access controls, alarms, locks, surveillance or tamper-proof seals.
  • Inspecting cargo at each stage of the supply chain or shipment process.
  • Completing background checks on all employees.
  • Meeting all compliance and security standards.
  • Conducting regular risk assessments of supply chain segments, vendors and partners.
  • Training employees to identify and resolve supply chain security risks.
Supply chain security timeline

Importance of supply chain security

Supply chain security should be a high priority for organizations as a breach within the system could damage or disrupt operations. Vulnerabilities within a supply chain could lead to unnecessary costs, inefficient delivery schedules and a loss of intellectual property. Additionally, delivering products that have been tampered with or unauthorized could be harmful to customers and lead to unwanted lawsuits.

Security management systems can help protect supply chains from physical and cyber threats. Physical threats encompass risks with internal and external sources, such as theft, sabotage and terrorism, while cyber threats refer to vulnerabilities in IT and software systems, like malware attacks, piracy and unauthorized ERP access. While threats cannot be completely erased, supply chain security can work towards a more secure, efficient movement of goods that can recover rapidly from disruptions.

This was last updated in May 2019

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