How vulnerable is your supply chain? (page 2)

-- Logistics Management, 4/1/2005

Page 2 of 4

SF: The report did do a good job of raising the awareness level. It lead the charge to combine the frontline border agencies under one roof, which was put forth in the third-phase report of the commission—but that happened post 9/11.

The frustrating part of the story was that this was a commission sanctioned by Congress, officially called the “U.S. Commission on National Security in the 21st Century.” We found that the number one security threat to the U.S. in the 21st Century would be a catastrophic attack on our soil, and we weren’t prepared to deal with it. It was briefed down on Jan. 31, 2001, in the Mansfield Room in the Senate, and not a single major media news outlet showed up to report on it. 

LM: What was the first thing that crossed your mind on 9/11/01?

SF: Well…the event happened and the response was precisely the kind of thing that I had been writing about in the past. Our response was to turn everything off; not only ground transportation and aviation, but to close our borders and seaports. I caught the first train out of New York City to Washington to meet with [then Coast Guard] Admiral Jim Loy to discuss how to turn it back on again.

LM: The 9/11 Commission has noted that the terrorism risk is "great or greater" in the maritime and surface transportation modes, yet there remains an extreme focus on air safety. Why does this imbalance continue?

SF: We put all our eggs in the air transportation basket, and we continue to go through the motions of talking about security within the other sectors. [But] we really haven't created a means to make other modes less vulnerable.

The question is, when will TSA [Transportation Security Administration] be allowed to shift its focus to U.S. ports? A lot of that has to do with resources. It's almost certain, looking at the President's budget for this year, that the TSA is not going to be able to deal with the land and maritime elements anytime soon. You have to remember, TSA is the new guy on the block, and they don't bring a lot of value-added services.

LM: We've been able to avoid an attack through the global supply chain over the past three years with a patchwork of governmental oversight. Do you consider that a success?

SF: We can say that the success over the past three years is in the raised awareness of the potential vulnerability of the supply chain. It's now well accepted all the way up to the White House... When we're talking about global supply chain security it's more than a border security or a homeland security issue. It involves the Department of State, Department of Commerce, and the Department of the Treasury. They have the tools to create the incentives one needs to improve security, but that has to be effectively coordinated—and that's yet to happen.

LM: What are your recommendations for changing the way shippers approach supply chain security?

SF: There are a couple of key concepts that I try to advance, and they really challenge people's notions of security. Most of what we see of security is what we experience at airports or when we drive around the White House—moats and castles. I'm arguing that in the "new world" we have to borrow from "safety" thinking.

Security at its essence is managing the risk that something we value will be disrupted by people with malicious intent, much in the same way that safety is about managing the risk that an "act of God," human error, or mechanical error will compromise things of value. I try to make the case that safety is never an end unto itself. It's about giving something a value and putting reasonable measures in place matching the value to managing the risk. Continued...

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