The Benefits of Investing in Supply Chain Security

With the memory of attacks by Somali pirates still fresh in mind, supply chain security has come to the attention of supply chain managers. Already in 2005, the IBM Center for the Business of Government published “Investing in Supply Chain Security: Collateral Benefits”, a report which highlights how certain security investments can create collateral benefits well beyond the immediate security breach they were aimed at. In addition, the report also shows how investments in security programs can increase the efficiency, flexibility and resilience of the supply chain.

Areas for investment

Secure supply chains are a prerequisite that enables firms to continue exchanging goods and services in un unrestricted and uninterrupted manner. Firms, then, have a variety of investment options available to improve their supply chain security. Below are some of the areas that should be addressed:

  • Asset Visibility and Tracking
  • Personnel Security
  • Physical Security
  • Standards Development
  • Supplier Selection and Investment
  • Transportation and Conveyance
  • Organizational Infrastructure Awareness and Capabilities
  • Collaboration Among Supply Chain Parties
  • Proactive Technology Investments
  • TQM Investments
  • Voluntary Compliance with Security Regulations

The areas above are used throughout the report to portray a range of security investment options and the associated broad range of anticipated collateral benefits. Firms should be aware that different supply chain security investment may create similar collateral benefits and thus, the main aim of the report is to deliver guidelines for understanding the potential collateral benefits available prior to making an investment decision.

Summary tables

The following are some of the summary tables used in the report. For an in-depth discussion of each investment and potential benefits, you should download the full report (see link below).

Reference

Rice, J. B. and Spayd, P.W. (2005) Investing in Supply Chain Security: Collateral Benefits. Special Report Series, IBM Center for The Business of Government .

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