Are Security Investments an Indicator of Overall Supply Chain Performance?

I came across this story yesterday at Manufacturer’s Blog citing a new report from Stanford that argues investments in supply chain security far outweigh the costs. The study investigated eleven major manufacturers and three logistics companies that are "considered innovators in supply chain security" and found that these organizations not only reduced their vulnerabilities "to global acts of terrorism, natural disasters, and energy shortages" but that they also realized significant, quantifiable "collateral benefits” as well. Some of these additional benefits include reducing customs inspections by 43%, improving on-time shipping to customers by 30%, lowering excess inventory by 14%, and reducing inventory theft by 38%.

Impressive numbers, but what do supply chain security leaders do differently? Among other areas, the study suggests that leaders have looked outside their four walls to enhance supply chain security by placing more "explicit" demands on suppliers to play an active role in security. Others have even evaluated partners and made sourcing decisions based on risk assessment models of individual suppliers. When I checked out the report, I became completely convinced out the auxiliary benefits of investing in supply chain security – and heavily involving suppliers in the process. But decide for yourself whether it makes sense by reading the entire report here.

Jason Busch

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