Study analyzes spillover benefits for supply chain security
Stanford University researchers Barchi Peleg-Gillai, Gauri Bhat and Lesley Sept, recently released a study on the results of implementing Supply Chain Security standards, titled “Innovators in Supply Chain Security: Better Security Drives Business Value”. The Study was co-sponsored by the National Association of Manufacturers (NAM) and IBM, and is the latest in a series of papers on the costs, implications and benefits of supply chain security measures created following the terrorist attacks of 9/11. This paper focuses on the spillover benefits of compliance with C-TPAT, the 24-hour rule and other related measures such as the Technology Asset Protection Association (TAPA) and the ISO 28000 Specification for security management systems for the supply chain.
For compliance, security or customs managers, this study is significant in that it may help to engage internal stakeholders and management in proposed or existing C-TPAT programs. Implementing security standards throughout one's supply chain has the potential to benefit the overall operation of large multinationals and small importers alike, according to the study.
The research is based on data gathered from responses from 11 manufacturers and 3 logistics service providers. Participants were interviewed about how implementing security measures had affected them in terms of supply chain visibility, efficiency, customer satisfaction, inventory management, shipping time, and any associated cost reductions.
According to the study, participants reported experiencing the following:
- 38 percent reduction in theft/loss/pilferage
- 37 percent reduction in tampering
- 14 percent reduction in excess inventory
- 12 percent increase in reported on-time delivery
- 50 percent increase in access to supply chain data
- 30 percent increase in timeliness of shipping information
- 43 percent increase in automated handling of goods
- 30 percent reduction in process deviations
- 49 percent reduction in cargo delays
- 48 percent reduction in cargo inspections/examinations
- 29 percent reduction in transit time
- 28 percent reduction in delivery time window
- close to 30 percent reduction in problem identification time
- response time to problems and problem resolution time
- 26 percent reduction in customer attrition
- 20 percent increase in number of new customers.
This complete study can be found here.
