Using Total Quality Management to Mitigate Supply Chain Risk

Using Total Quality Management to Mitigate Supply Chain Risk

Terry D. Crippen (Navmar Applied Sciences Corporation, USA)
DOI: 10.4018/978-1-4666-5888-2.ch144
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Background

Since September 11, 2001, there has been a serious focus on the physical security of supply chains due to the fact that it is one method that a terrorist could bring a weapon into this country. Lee (2001) states that, “Governments and industry have already responded with proposals to create more confidence in supply chain security, while maintaining smooth flows of goods and services in a global supply chain (p. 2).” One of the biggest problems faced by these entities is the need to add visibility to the supply chain without creating delays and bottlenecks. The free-flow of goods must continue without those delays and without substantial increases in costs. Additional costs include the need for increased stock levels due to longer lead times in shipping, additional insurance premiums for lost cargo, and the expansion of the supply chain to keep inventory where it is needed to meet customer demands (Lee, 2001, p. 2).

The Department of Homeland Security's Customs and Border Protection (CBP) has the responsibility of insuring that the freight entering the United States is secure and will not pose a risk to the country. Their authority is unmatched to accomplish this goal. The CBP states in their 2006-2011 Strategic Plan that,

The border authority of CBP is unsurpassed in defense of national interests because examinations of cargo and persons do not require search warrants, probable cause, or particularized suspicion. In order to allow for the movement of legitimate travel and trade, CBP uses all resources at its disposal to target travelers and cargo that pose a risk for terrorism and to facilitate the flow of legitimate trade (p. 10).

CBP, through its Container Security Initiative (CSI), does not work solely at US ports; it has expanded its reach to foreign countries. They have agents posted at every port to inspect freight at the port of departure during normal down-times before loading so that any suspicious loads can be flagged for further inspection (CBP, p. 12). Partnerships overseas are vital to the success of these types of programs like the CSI. The European Commission, for example, welcomes this type of program, “The European Commission continues to advocate the internationally recognized multi-layered risk-based approach including mutual recognition of trade partnership programs for enhancing and protecting the international supply chain (Verheugen, 2009).”

Key Terms in this Chapter

Carrier: The party responsible for physically taking product from one point to another.

Cross-Dock: The process of a shipment passing from one truck, sorting through a distribution facility to another truck, then on to another cross-dock or on to its next destination ( Rodrigue, 2011 ).

Physical Security: Controls put into place to restrict access by unauthorized personnel (CBP, p. 27).

Radio Frequency Identification (RFID): A system that uses radio waves to obtain data programmed in devices (Reaz, et al., p. 24). The RFID tags hold that information which can be retrieved at any point in the products' travels.

Procedural Security: Written policies put into place to ensure the security of the entire supply chain (CBP, p. 33).

Advanced Manifest Rule (AMR): The requirement that U.S. Customs be notified in advance when a shipment is to arrive. The Rule requires that the notice be 24-hours (Lee, p. 4).

Freight Forwarder: Forwarders make the arrangements for a shipment and take the responsibility for getting the product to its destination. Forwarders also prepare any documentation necessary for the move ( Gunderman & Weaver, 1998 ).

Container: A container is a large metal box specifically designed for shipping products overseas. They generally come in a smaller size of 20' length which can hold up to thirty-two thousand pounds, or a 40' length which can hold up to forty thousand pounds ( IBP, 2011 ).

Vendor Qualification: The verification through a questionnaire that a vendor meets certain security criteria in order to do business (CBP, p. 13).

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