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Supply chain security and risk management

Losses related to the lack of security in operations are quite representative in companies from different sectors of the country. Monica Barros already commented at the beginning of the year that Brazil is considered the sixth country with the highest risk for cargo transport, something that considerably impacts the shipping price. However, cargo theft is just one of the possible losses due to lack of security in the supply chain, in addition to theft, cyber attacks and piracy, for example. It is important to emphasize that regardless of the company's location in the chain, any loss due to lack of security directly impacts the end customer and, consequently, all the links involved in its supply chain. So how can each company individually try to minimize these losses?

It is important to always align the security plan with the type of operation carried out by the company. A brick-and-mortar retailer, for example, sees thefts, both from customers and employees, as the main villains in terms of security, with investments in internal surveillance systems as the most adequate to reduce this type of loss. E-commerce retailers and distributors suffer considerable losses from cargo theft on the roads, and in some cases also cyber-attacks. Therefore, investments in armed escorts and digital security are more appropriate.

However, these losses due to lack of security can be minimized, but they will never reach zero. There will always be an optimal point between the total invested and the total losses avoided. Therefore, it is essential that all investments in safety are accompanied by a risk management plan for routine operations, which takes into account the magnitude of possible losses and the respective safety initiatives. Cargo insurance and/or armed escort only for cargo above a certain value are examples of this type of initiative.

The truth is that, for many times, security expenses are seen as costs and not as investments. Well-allocated expenses of this type can generate considerable financial returns by minimizing inventory losses, in addition to constituting a robust competitive advantage over competitors.

Does your company have a security and risk management plan in line with business needs? The security of a supply chain is only as strong as its weakest link.

 

References

<http://www.scdigest.com/experts/Holste_17-09-27.php?cid=13069>

<https://ilos.com.br/web/roubo-de-carga-e-o-impacto-no-custo-de-transporte/>

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