Achieving Safe & Secure Supply Chain Operations

In the fast-paced realm of new age freight movement, ensuring safety has become a nonnegotiable imperative. Within the intricate ballet of shipping, be it domestic or global, cargo security is a pivotal act that requires precision, planning, and a meticulous approach. Protecting shipments from a spectrum of threats demands a cohesive strategy built upon a foundation of essential components. Companies that implement effective safety programs stand to gain a significant return on their investment. Our recently held panel discussion on ‘Achieving Safe & Secure Operations’ discussed the strategic priority of ensuring safety & security during cargo movement. Our expert panellists delved into the vital issue of addressing security concerns in today’s freight industry while highlighting the challenges faced and the strategies they employed to uphold safety standards. Excerpts…

As India prepares to become a US$5 trillion economy, there are varied challenges that need to be ironed out when it comes to supply chain. The two important ones involve Security and Safety. Whenever we discuss about security, it always implies chemical transportation security owing to the hazardous nature of the product. It also involves other products as well but what is less understood is the security aspect in the supply chain. It is no longer the safeguarding business that we have deployed some guards for a facility, it’s all about securing our assets or our products, making sure that goods are not hijacked while in-transit. The other day someone was talking to me with an apprehension if the goods would reach the destination. As startling as it may sound about a decade back or so, 15% of the truck moving on Indian roads not do not know where they disappeared. If that persists, it is now increasingly becoming a major security threat owing to reasons such as counterfeit, kidnapping, terrorist activity, to name a few.” With these remarks, RG Panicker, MD, Dangerous Goods Management India, moderator of the panel set the tone in the right direction. 

The evolving landscape of freight transportation presents a distinct array of security challenges for logistics and supply chain management. These challenges range from cargo theft to cyber threats targeting digital supply chain systems, highlighting the industry's multifaceted vulnerabilities. The growing complexity of supply chains, which often span multiple countries and logistics management approaches, amplifies these risks. Cargo security encompasses a spectrum of measures and practices to safeguard shipments against various threats. These threats extend beyond traditional theft and include tampering, unauthorized access, and the transportation of hazardous or contraband materials, reflecting the need for innovation in supply chain security.

However, the industry is rising to the occasion. Triumphs in the realm of freight transportation security are characterized by innovative solutions and collaborative efforts. The objective is clear: to ensure that the integrity of cargo remains intact throughout its journey, preserving its value, reliability, and safety. Government, industry associations, and private enterprises are collaborating to establish best practices and regulations that enhance security across the supply chain. Employing advanced technologies such as IoT sensors, blockchain, and real-time tracking, companies are bolstering security measures to monitor cargo conditions and thwart unauthorized access. Here’s an insightful take on companies’ innovative strategies to tackle safety & security while in-transit…

What are the most important critical safety risk and challenges that the industry is facing?

Arush Kishore, VP - Integrated Operations (Liquid & Gas), Reliance Industries: I think the risks are pretty much well known, if we can start with environment, health, financial and not limited to risk to reputation. At RIL, we are at a curve where every safety initiative that we take releases efficiency and therefore leads to cost competitiveness vis-à-vis competition. During the initial days, people would consider this as the cost factor. It forces you to look at minute tasks in 3P triangle – People, Process and Platform. For us as business entity, safety is linked to business efficiency.

Dhritiman Chakraborty, Director Operations, Ingram Micro: In the IT distribution landscape, while the nuances may vary, many safety and security aspects are fundamentally shared across industries. At the heart of our operations lies the trust of numerous OEMs, for whom we manage the distribution. Ensuring data security is paramount, as it upholds the integrity and reputation of both our partners and us. Beyond data, there’s also the tangible aspect, which is safeguarding the high-value inventory in our warehouses. The financial metric aside, any compromise on this front can severely dent the trust OEMs have on us and that we’ve built over the years.

RG Panicker: Supply chain security is critical concern for organizations as it encompasses the protection of goods, information, and processes throughout the supply chain. Couple of key issues that are of concern and needs to be addressed are -

• Counterfeit product: Counterfeit product being of inferior quality can be dangerous to consumers as they don’t meet any safety standards or undergo quality checks. Fake pharmaceuticals, electronics or cosmetic products can have severe health and environmental issues. They can undermine legitimate business resulting in significant economic loss and even brand reputation losses if consumer associated it with the company without understanding that they are counterfeit products.
• Physical safety of the people when transporting dangerous goods if they are not packed appropriately and in accordance with the regulations.
• If security is weak, it can lead to pilferage, theft and tampering of goods.
• Cyber security is another area of concern, as the virus attack can immobilise the organisation as today almost every system is IT enabled and interconnected.

How would you carry out risk assessment for your organization?

Arush Kishore: We have a well organized, cadence-based system of risk assessment – identification, assignment, and classification. We have a risk register at various levels of our organization and again a risk mitigation cadence of platforms that meet regularly to flag of concerns and expedite mitigation efforts.

Dhritiman Chakraborty: A robust risk assessment hinges on diligent identification of all possible risk areas. It’s vital to consider every facet of our operations, while assessing risks - from human assets and physical inventory to data and our corporate reputation. Following identification, a comprehensive mitigation strategy is to be crafted. Parallelly, contingency or ‘Plan B’ scenarios are to be prepared to handle any possible exposure. Every organization, especially in our fast-paced industry, should also have a Business Continuity Plan (BCP) that seamlessly merges with risk assessment. The cornerstone, however, remains employee training. An organization’s frontline should be well-equipped and aware of their roles in risk scenarios and hence they need to be frequently trained.

What are the requirements or steps you follow when you are selecting your third-party vendors when it comes to safety & security?

Arush Kishore: The Covid disruption threw up many insights into day to day operations. One of the insights was the need for management of vendor quality. one of the learnings we immediately implemented was a vendor capability audit for both entry of new players and standardization of desirable practices among existing associates. This coupled with a data derived performance measure is proving to be a great tool in capability building and enhancement of our vendors, thus improving our ability to service the demands of a dynamic business environment.

Dhritiman Chakraborty: Safety and security are paramount in our vendor selection process. The steps we typically follow include:

1. Background Checks: Assess the vendor’s reputation, previous collaborations, and any recorded breaches or issues.
2. Safety and Security Audits: Conduct a thorough audit of their infrastructure, personnel, and processes to ensure they meet our safety standards.
3. Data Protection Protocols: Ensure they have stringent data security measures in place, including encryption, secure access controls, and regular backup processes.
4. Regular Training and Updates: Our vendors must ensure their staff is regularly trained on the latest safety and security protocols.
5. Review of Legal and Compliance Documents: All vendors must adhere to local and international laws regarding supply chain safety and security.

Vishal Sharma, Regional Supply Chain Manager - ISC, SEA & China, Indorama Ventures Oxides ANK: We have our own tailor-made process for selecting a third-party vendor. In terms of warehousing, we gauge the vendor based on his experience in handling chemical goods, the other chemical companies they are dealing with, the experience of their EHS person and safety protocol they follow. A through audit from the perspective of safety and security is done before finalizing the vendor. Similar audit is done for transporters as well.

RG Panicker: Companies must follow a two pronged approach to selecting vendor:

1. First step must involve analysing the vendor on their technical and safety competency by checking their antecedents, employee recruitment policy, safety standards implementation, training of their human resources etc. Only after they qualify in this aspect, then move to the second layer which is Commercial evaluation
2. Commercial evaluation must be examined against industry benchmark. If the offered price is lower than industry benchmark, then more detailed investigation must be done to see how the vendor is able to give such low rates.

How can organizations ensure that proper safety protocols are maintained during transportation?

In the intricate choreography of shipping, the dance of cargo security is not left to chance. It’s a well-orchestrated performance that demands meticulous planning, collaboration, and a proactive approach to identifying and addressing risks. A global company has mentioned these interesting aspects to enhance and empower safety & security of cargo…

• Pre-Shipment Preparations and Risk Assessment: The journey towards secure cargo begins long before goods are loaded onto a ship. Pre-shipment preparations involve a careful evaluation of the entire supply chain, from origin to destination. This includes scrutinizing the routes, transportation modes, and potential vulnerability points. A comprehensive risk assessment allows shippers to identify high-risk areas and potential threats, enabling them to implement targeted security measures. Shippers can make informed decisions that minimize risk exposure by understanding the intricacies of their shipments’ journey.
• Collaborative Efforts Among Stakeholders: In cargo security, collaboration is not just a strategy – it’s a necessity. The interconnected nature of the global supply chain demands active cooperation among all stakeholders. Governments, shipping companies, logistics providers, port authorities, and even customers must come together to exchange information, share intelligence, and coordinate efforts. A collective approach enhances situational awareness and enables timely responses to emerging threats. This collaborative synergy is particularly crucial in addressing complex challenges like piracy, where joint efforts can lead to apprehending criminals and recovering stolen cargo.
• Best Practices for Onboard Security Measures: As cargo embarks on its oceanic journey, security measures must extend beyond the port. Ships become floating fortresses tasked with protecting their precious cargo. Best practices for onboard security encompass a range of measures, from securing access points to employing trained security personnel. Locking mechanisms, access control systems, and well-defined security protocols ensure that only authorized personnel interact with cargo. Regular drills and training sessions help crew members respond swiftly to security breaches, mitigating the impact of potential threats.

Arush Kishore: I think we have to look at everything through the prism of People, Process and the Platform. One major emphasis area of our company is strong communication, and I can tell you that we are at the cusp of a major information highway, and we are not talking about 5-10 years’ timeframe, we are talking about months, for being able to access high quality data anywhere in India. We’re all sitting in the age of a major information revolution and as supply chain practitioners, we are not thinking as to what are the good use cases that can happen with access to such kind of data availability. I personally believe that all the three aspects – People, Processes and Platforms – they will all have enormous impact as to how do we move our goods daily. Data will help us Implement Journey management easily. It will not be just a signed paper at the end of the journey, it could be verifiable and trackable in real-time. Data really enables us to do the manual work in a more visible trackable and repeatable manner.

Dhritiman Chakraborty: Ensuring safety during transportation is a multifaceted process:

• Vehicle Tracking Systems: Use GPS tracking for real-time monitoring of the shipment.
• Tamper-proof Packaging: Use packaging that clearly shows any unauthorized attempts at access.
• Driver Training: Regularly train drivers on safety protocols and the importance of secure transportation.
• Emergency Response Protocols: Have a system in place for immediate action in case of any breaches or issues during transportation.
• Collaborative Communication: Maintain a transparent and constant line of communication with all stakeholders during the transportation phase.

Vishal Sharma: In transportation industry, drivers play an unmatched role in adhering to safety norms. Regular training to the drivers and other members of the industry to make them understand the importance of following the safety procedures like, adhering to speed limits, following safe loading and unloading practices, regular vehicle inspection, etc., and imparting basic product knowledge (TREM Card) and also explaining them how these compliances have direct impact of their lives, will help to build a strong safety mind set.

RG Panicker: Organizations can ensure that proper safety protocols are maintained during transportation in the following ways…

• Clearly understanding the need to ensure highest degree of safety for the people operating the system, the public and the asset involves.
• Human factor must be addressed through proper management of people working hours to prevent fatigue, thorough training in safety standard and need to maintain discipline.
• Round the clock monitoring of the transport system through GPS and control tower approach.

What do you see as the future trends in the supply chain safety and security aspect which the technology can solve for the industry?

In the rapidly evolving landscape of international shipping, staying ahead of security threats demands more than traditional methods. Innovative technologies have emerged as game-changers in the quest to ensure the safety and integrity of cargo throughout its journey. The Internet of Things (IoT) has revolutionized how we interact with our surroundings, and its impact on cargo security is no exception. Smart sensors embedded in cargo containers enable real-time monitoring of conditions such as temperature, humidity, vibrations, and even unauthorized openings. These sensors transmit data to centralized platforms, allowing shippers and stakeholders to receive immediate alerts in case of anomalies. This level of transparency enhances security by enabling rapid responses to disruptions and tampering attempts.

Arush Kishore: The entire gamut of operations will be impacted by high quality data availability. We will be spoilt for choice as to what to digitize and which aspects to automate. The most repeated tasks should ordinarily be the first to come into this ambit. I would think the movement in between nodes, long , short and ultrashort, would be first impacted by this. We will have the ability to have , should we want it, complete end to visibility and control.

Dhritiman Chakraborty: With the rapid evolution of technology, I foresee the following trends playing a significant role in supply chain safety and security:

• IoT and Sensors: The integration of the Internet of Things (IoT) in the digital supply chain will greatly enhance the visibility and tracking of products in real-time. This will not only improve inventory management but also significantly reduce the risk of theft or misplacement.
• Blockchain: The distributed ledger technology will ensure the authenticity and integrity of products by providing an immutable record of every transaction and movement.
• AI-driven Predictive Analysis: Artificial intelligence will be crucial in predicting potential risks and suggesting mitigation measures well in advance, based on historical data and patterns.

RG Panicker: Use of following technology to tackle myriad problem are already happening and will accelerate as we move forward. There is an increasing focus on regulatory compliance related to supply chain security. Regulations such as the European Union’s General Data Protection Regulation (GDPR), the Customs-Trade Partnership Against Terrorism (C-TPAT), and other industry-specific standards require organizations to adhere to specific security protocols and standards including in India the encouragement to go for AEO by customs.

Puneet Agarwal, Founder, Fretron: When we talk about safety and security, I break it down into 3-4 parts. One is security and safety within the premise and outside the premise. Then there is safety & security within the organization boundary and outside organization boundary. Within the premise, technology is going to be instrumental in everything because with the kind of video analytics that are now possible such as gesture recognition, we have to give real-time feedback, real-time alerts. It’s a human behaviour if you get immediate feedback, that’s when it gets embedded in your muscle memory. Most of the organizations still view safety as a compliance mechanism, rather it should be a DNA. We must emulate the working ethics of the European companies wherein a small incident also needs to be reported to the CEO. We must follow the top-down approach in imbibing safety as the culture and technology is going to play a key role. Tools such as Artificial Intelligence, Generative AI and Video Analytics are going to be the key.

Cyber security is still not a buzzword in India, what is your take on that?

Puneet Agarwal: I see there has been a significantly increased awareness about cyber security in the country. This is the mandate from the company’s board that Chief Information Security Officer must be nominated. Today, it’s not just about ensuring physical goods security, the digital systems security is an equally essential aspect and financial institutions have been instrumental in creating awareness about the mechanisms for ensuring cyber security. We must work with vendors who are compliant with the latest security standards such as SOC and periodic Vulnerability Assessment and Penetration Testing (VAPT). A bigger concern is most of the companies have in-house IT systems, and to harden those IT systems is quite difficult because security itself is very challenging gamut to achieve, which entails the services of an expert. More and more people are moving towards outsourcing these services, by this I don’t mean to say they are bulletproof but they’re reasonably more productive.

People are moving away from their own server to Cloud. How secure is the Cloud? India is talking about keeping the data within the country. Data localization is a big issue, how does the Cloud help in that because most of the clouds are working outside India?

Puneet Agarwal: Most Cloud providers today have presence in India. They understand India has a big market. No system can be termed an absolutely unbreakable system. When you work with large, reputed providers, they would have much more mature. The chances of the system getting breached are much lower if it’s part of their core value proposition.

What role does compliance play in mitigating the supply chain risk and how can organization ensure they stay updated with safety requirements that India is now coming up with?

Arush Kishore: There is absolutely no doubt that safety regulation and standards play a great role in giving direction and containing risk. Organizations have to ensure that the keep abreast of developments in the field of safety and its related regulations by using multiple tools and fora available to it. They should also participate in fora that gives them the opportunity to inform on the debate and represent to decision makers in India at every opportunity.

Vishal Sharma: Today the global supply chain compliance is more dynamic compared to the recent past. This embedded more responsibility on supply chain management. The risk of non-adherence to compliance can range from heavy monetary penalty to restriction of trade in certain markets. As a supply chain professional, you not only should have the knowledge of compliance regulations of your home country but also of the country from where you are importing and your exporting countries. To manage the safety and regulatory requirements, it’s not only necessary to have the access of the information and understand the impact of existing compliance requirement but also to have the capability to foresee the new and rapidly emerging requirements.

What should organisations do to ensure that they comply with safety norms?

Arush Kishore: I think safety is a hygiene factor. It’s not good enough being agile or quick. Supply chain is nothing if you are unsafe. This understanding of safety has to be owned by the entire organization and not just supply chain. Only then will the efficiencies flow.

Dhritiman Chakraborty: Organizations must prioritize the establishment of a comprehensive safety culture, which is both imperative and challenging to implement. This cannot be achieved overnight and demands collective accountability, transcending beyond just the purview of the EHS department. It’s essential for organizations to foster an environment where employees feel empowered to discuss safety concerns without apprehension. Occasionally, it’s observed that certain managers, in their bid to portray their zones as exemplary, might inhibit open conversations about safety issues, especially in the presence of senior officials. Such practices are counterproductive. The commitment of the management is crucial in this regard. The decision to invest in a robust safety culture should not be weighed against other financial allocations. Genuine dedication towards building this culture is pivotal, as it forms the backbone of an effective safety management system.

Vishal Sharma: It’s the management’s responsibility to build the culture of safety in their organization. Like other operations equal emphasis should be given on safety and security. The message of “Safety First” should be percolated down the line. Regular safety audits, proper and regular safety training to employees, rewards or recognition for identifying the unsafe acts, comply with OSHA regulations are some of the programs that can help the organization to build the sound safety habit.

Puneet Agarwal: I believe that safety is a continuous journey. It needs to start from the top and we as a range of organizations have different levels of maturity. We have a long way to go. We are one of the largest most populous countries in the world, so we have to level up. We must take a step-by-step approach. I strongly believe in technology besides awareness is there but still as humans, we are most of the times not conscious and are operating in our subconscious minds. The way technology has become more affordable and with AI and video analytics, unsafe behaviour is being automatically pointed out. We have seen plants where if a person is moving without a helmet, it will immediately cause an alert and security would immediately charge on that person. If the person is not moving on the designated walkways, then again, it’s immediately being reported. I’m very excited about the future. We would be fast tracking the journey as we progress.

Is India ready for higher level implementation of compliance in health and safety?

Arush Kishore: There are two levels, and I will not address the ESG debate, but I see no option for companies like mine, but to move in that direction. We are on that side of the curve where these things are releasing efficiency in the system, for example, we have implemented a mandatory half an hour check for the driver after every three hours. They need to be given 30 minutes’ compulsory rest time. It is electronically & digitally monitored and implemented. Our per day journey in kilometers covered has gone up by 30%. We have reduced the size of our fleet by about 17%, we have increased our loaded kilometers by about 14%, we have a far younger fleet that we used to have about three years ago. All these results have been possible because of the safety implementation program.

Dhritiman Chakraborty: Large corporations in India have steadily moved towards stricter safety standards. However, we must also shift our focus to the multitude of MSMEs in our ecosystem. Their readiness, often constrained by financial considerations, is the real litmus test. Collaborative efforts between larger entities, government agencies, and MSMEs can bridge this gap. My past experiences in the chemical industry have shown that while the intent may exist among smaller entities, the execution often falls short, mostly due to the cost-benefit equation of such measures. This is where support from Govt. and collaboration with large organization would be very fruitful. Addressing this can reshape our collective readiness.

Vishal Sharma: With India becoming the 5th largest economy, it is utmost necessary to have health and safety standards equivalent to that of other large economies and that needs quick transformation. We had already started experiencing this transformation in India with the implementation of new compliance regulations. Also, for our industry to compete with the larger economies and gain access to the market of these economies, it is necessary to make ourselves ready to adopt the higher level compliances in terms of health and safety.

RG Panicker: Yes, India is ready for higher level of implementation of compliances in health and safety. Various regulations and attendant rules are already in place. Petroleum companies are showing the way which is examples for others to follow. Further a new standards IS18149:2023 - Transportation of Dangerous Goods — Guidelines’, has been formulated under the Transport Services Sectional Committee, SSD 01, of BIS, and is expected to set a new benchmark for the safe handling and transportation of hazardous materials across the country.

In conclusion, safety stands at the forefront of modern freight transportation. While security concerns persist, the industry’s dedication to embracing technology and fostering partnerships demonstrates its commitment to safeguarding goods and ensuring their seamless journey across the globe. As the landscape continues to evolve, the pursuit of safety-first practices will remain an ongoing journey, shaping the future of freight transportation.