How secure is your supply chain?

Picture your supply chain as a massive bird feeder, and imagine a family of squirrels spending their whole day trying to figure out how to get at its contents. That picture of the supply chain resembles the view security expert Doug Durden takes.

"With each advance in technology that we apply to shipments or anything attached to security, there's someone out there who's trying to figure out how to break it," says the manager of safety, security and asset retention for third-party logistics (3PL) services provider Mallory Alexander International Logistics.

Thinking "it can't happen here" is just wrong, says Durden. If there are two common mistakes that support an environment where cargo loss can occur, Durden feels they are underestimating what a thief is willing and capable of doing to get what you have, and believing that it won't happen to you.

There could be more happening in your supply chain than you realize. Rusty Winfield, Mallory Alexander's global transportation manager, put additional security initiatives in motion following the terrorist attacks of September 11, 2001, but since the creation of Durden's full-time position, the company has reduced cargo losses by 70%.

Some of the steps Mallory Alexander has taken aren't dependent on technology; instead, they rely on very human elements. One is simply being both proactive and reactive to situations. Another is a novel approach to using the eyes and ears of workers along the supply chain and their basic honesty and pride to reduce opportunities for thieves and terrorists.

To that end, Durden initiated a program through Crime Stoppers International to deter and uncover dishonesty along the supply chains Mallory Alexander manages. The simplest piece of the program is a brightly colored label attached to every shipment the 3PL handles. The label states that Mallory Alexander endorses Crime Stoppers and explains how an individual can phone in a tip on stolen cargo.

Crime Stoppers Memphis, in Mallory Alexander's headquarters city, manages the telephone tip line and rewards as part of a broader anti-crime program. Walter Crews, executive director for the Memphis group and a former police director, says it's difficult to estimate the deterrent effect of a program like Crime Stoppers. Mallory Alexander's approach is unusual, if not unique, he points out. It has the support of the National Cargo Security Council and the regional Mid-South Cargo Security Council.

The only cost to Mallory Alexander, says Crews, is the cost of printing the labels and any posters or other materials it uses to promote the program to its employees and along its supply chains. It reaches the truck drivers, warehouse workers, forklift drivers, and anyone else who actually moves or accounts for the freight, not just inside the four walls of the company's facility, says Durden.

Crime Stoppers International was launched in 1977, and the Memphis group was started in 1981, says Crews. The basic premise is that a tipster who sees a crime can call Crime Stoppers with the information and remain anonymous. Rewards are given following an arrest, he continues, not just on conviction. The board of the Crime Stoppers group decides on the monetary reward based on a number of factors, and arranges for the verification of the tip and the payout.

"Annually, we return 10 times the amount in stolen property that we pay in rewards," says Crews. It sounds a little astounding, but Crews says about 20% of the people who call with tips never come in to claim the cash.

Since 1981, Crime Stoppers Memphis has paid out $2 million in rewards for tips on all types of crimes. It has recovered $16 million in stolen property, $19 million in illicit drugs, and boasts 800 solved murders in that same period. In Memphis, 98% of the people arrested from Crime Stoppers tips are convicted or plead guilty. Memphis led the country's Crime Stoppers programs with 22,000 felony cases solved in 2003, Crews points out.

Crime Stoppers is a not-for-profit 501c3 organization and relies on corporate sponsors and private sources for taxdeductible donations.

A more conventional approach to security is Durden's combination of proactive and reactive steps. On the proactive side, Mallory Alexander sets security goals for its facilities and its suppliers. Durden will visit his own facilities and those of vendors, look around, take photos, and talk to the local managers to help keep security on track.

If something goes wrong, you have to react, Durden says — not in a few days, but immediately. When he detects a problem, he will often make an unannounced visit to the vendor's facility. He'll talk to the local manager and try to get to the heart of the problem. It's more of a consultative effort than it is an official investigation, according to Durden's description.

Durden then reports the results to Rusty Winfield and discusses the situation. If it's an isolated lapse, they ensure that everyone is agreed on the solution. If it is an utter disregard for security parameters, the decision could be to drop that vendor.

"The people who want to break through your security will work relentlessly to find or create a weakness," Durden notes, so he is constantly thinking of ways to reinvent the company. He and other Mallory Alexander managers and executives keep in constant contact with other security professionals and law enforcement officials. This provides a steady stream of information on what is occurring in the area of cargo theft and what methods others have found to deter loss.

CSI: Supply Chain

Frustrated in a murder investigation, Albuquerque police detective Greg MacAleese took the unconventional approach of having a reenactment of the crime televised with a promise of anonymity and a possible cash reward for information. An arrest resulted five days later. That was in 1976, and today there are over 1,000 Crime Stoppers programs around the world offering cash rewards to anonymous tipsters following an arrest.

The program extends across the U.S. and Canada and into places as far flung as Fiji and Poland. Based on 1,165 known programs, Crime Stoppers International has helped clear over 1 million cases, resulting in more than 550,000 arrests. It has paid out more than $70 million and recovered $1.6 billion in property and $4.9 billion in narcotics. That's a recovery rate of over 90 times the cost of the rewards.

Crime Stoppers USA had cleared 681,171 cases as of June 2004 with 336,579 arrests. It paid $49 million with $3.2 billion in property and narcotics recovered. That's a recovery rate of nearly 65 times the cost of the rewards.

Walter Crews, executive director of Crime Stoppers Memphis, says the money certainly helps motivate tipsters to speak up, but the guarantee of anonymity helps. "Twenty percent of the people who call us and give us tips never come in to collect their reward." This sparked Crews to conduct a survey of tipsters who were coming in to collect their rewards, and the tipsters are nearly unanimous in saying the reason they've called in their tip was because they want the criminals off the streets; they want to protect their children. Crews points to another program in Memphis (and elsewhere) that helps support this desire. Weapons Watch is a program in Memphis schools offering tipsters cash rewards for reporting weapons in the schools. It has been years since Memphis city schools have had an incident involving a weapon. But during that time, Weapons Watch has helped to recover a number of guns and knives.

Another application of the Crime Stoppers system is a cargo security program at Mallory Alexander which labels each piece of cargo the logistics provider handles with the Memphis Crime Stoppers tip line number.

While the actual crimes solved and property recovered add up to some impressive numbers, Crews says there is no way to measure the deterrent effect. When criminals see the posters and labels with the Crime Stoppers number, they know there are silent eyes watching, and they may think twice before acting.