Protecting Your Assets While Maximizing Efficiencies

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Think about this scenario: Your leased distribution center is part of an industrial park consisting of millions of square feet of warehouse space, thousands of trailers and containers, and hundreds of millions of dollars of entrusted products.

On weekends, the operation often goes unmanned for periods, but much of the perimeter is protected by natural boundaries, including a 10-foot-wide flowing creek and heavy wooded areas. Aside from an infrequent black bear intrusion, security is not much of a concern.

But one Monday you arrive at work to find trailers vandalized, valuable products missing, and other products contaminated with an unknown substance. An act of this magnitude has never happened and there were no indicators that it would.

As you sort through the details, questions loom. Was this plain mischief or an organized attack? What will you say to your customers? Where do you begin?

Your key customers rely on you for precision timing and meticulous execution. And until today your delivery has been flawless. You know this incident will create far-reaching service disruptions to your just-in-time fulfillment contracts. The reality is that production lines will be idled until you—or your competition—find a solution. Your liability exposure will exceed those posed in your worst-case-scenario crisis management plan.

Compounding the issue, you can't find the most current trailer inventory documents. Without these files, you don't know the exact number of trailers, their contents, or their next scheduled movement. There is no definitive way to instantaneously grasp the totality of the situation by identifying the assets parked on your premises and the material they contain. The flurry of thoughts makes your head spin.

This catastrophe reflects your firm's inability to:

  • Identify assets in a dynamic fashion.
  • Identify threats and vulnerabilities to its facility and borders.
  • Devise measures to minimize or avoid risks.

What can you do to avoid this type of nightmarish situation?

Security concerns are blending with productivity initiatives to streamline operations inside and outside the distribution center. The catalyst for this recent trend is a greater focus on yard management by shippers, manufacturers, and third-party logistics providers (3PLs). They are recognizing that the millions of dollars of products parked in their yards or against dock doors are vulnerable to intrusions or administrative confusion. In certain cases, the value of product in the yard can be as high, if not higher, than product inside the warehouse.

Two key factors—Sept. 11 and the desire for increased operational efficiencies—have contributed to the interest in protective custody and proactive management of containers in the distribution center yard.

Since Sept. 11, several federally led programs have been implemented to protect and maintain effective security processes throughout the global supply chain. Of these programs, the U. S. Customs and Border Protection's Trade Partnership Against Terrorism (C-TPAT) has gained wide acceptance by the business community because it can be applied to a variety of industries.

C-TPAT focuses on six components:

  1. Procedural security
  2. Physical security
  3. Access controls
  4. Personnel security
  5. Education and training awareness
  6. Conveyance security

A yard management system covers many of these six C-TPAT components. It ensures procedural security by applying a precise methodology to tracking assets into and out of the distribution center. It also alerts management to physical security vulnerabilities within the yard as parking spaces are reviewed and grids are plotted to maximize flow and minimize threats.

A yard management system ensures that access controls to facilities and conveyances—such as positive identification of all carriers and vendors, and matching advance shipping notices with manifests—are highlighted and reviewed. And conveyance integrity is continually maintained, protecting against the introduction of unauthorized personnel and material. Only the right container with the right product being delivered by the right carrier and driver is permitted onto the property.

Yard management systems are gaining support from many types of businesses. Rich Lasek, customer logistics manager of Nabisco's Cleveland region, considers yard management a critical component of logistics strategy. He keeps all his trucks parked inside the warehouse throughout the loading process and they remain there until dispatch.

Some of the largest global manufacturers and service providers have acquired yard management systems, These companies are looking to secure the entire yard and all access points to provide a complete and tightly controlled process for receiving and dispatching containers, says Brad Mullins of K&T Switching, Ohio.

Yard management has become a critical success factor in security throughout the supply chain, particularly at the DC. Yard management solutions provide total visibility—both visual and information—on the use of gates, dock activity, and yard flows. This visibility helps maximize security, safety, and efficiency in improving operational execution.

In conjunction with these customized business rules for optimizing complex product flows, dispatch times, and labor availability, yard management systems hold equipment activity into and out of the distribution center grounds in constant vigilance. Container status and location can be verified at any time. More importantly, you can protect customers and be certain their products are being processed efficiently and securely.

The biggest benefit of yard management comes from the ability to apply the same process to a warehouse or distribution center of any size, says Mullins. Process is key, providing a standardized approach to meet most C-TPAT guidelines in a highly secured and efficient environment. Protecting real estate, assets, information, and people is a basic requirement today. The challenge is providing protection while maximizing efficiencies.

Physical security and distribution economies will continue to blend as companies focus on yard management as part of a greater competitive strategy.

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