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Security in Physical Distribution - Causes, mitigation measures and an investment model

Urciuoli, Luca LU (2008)
Abstract
Recent statistics and terror events testify an increased vulnerability of distribution networks.

Antagonistic threats as theft, counterfeiting, contamination and terror are burdening supply

chains with unexpected costs in form of lost cargo, production downtimes, lower customer

satisfaction, and higher transportation costs. Society is also worried about the possibility for

terrorists to exploit supply chains to smuggle terrorists or weapons for mass destructions.

Despite many governmental initiatives, very little is being done by supply chain and logistics

managers. Previous research points out globalization, JIT, weak prosecution of criminals so as

lack of business cases as... (More)
Recent statistics and terror events testify an increased vulnerability of distribution networks.

Antagonistic threats as theft, counterfeiting, contamination and terror are burdening supply

chains with unexpected costs in form of lost cargo, production downtimes, lower customer

satisfaction, and higher transportation costs. Society is also worried about the possibility for

terrorists to exploit supply chains to smuggle terrorists or weapons for mass destructions.

Despite many governmental initiatives, very little is being done by supply chain and logistics

managers. Previous research points out globalization, JIT, weak prosecution of criminals so as

lack of business cases as the main causes hindering higher security in distribution chains.

However some of these trends, as globalization and JIT, cannot be reverted. At the same time,

the weak prosecution of criminals shouldn’t hinder stakeholders putting security measures

into operation.

This report performs an explorative study to understand the main reasons affecting the

vulnerability of physical distribution chains. Main actors are identified and their interaction

phenomena are hypothesized as barriers and driving forces of security in physical distribution.

Results show that it can be hypothesized that other causes, besides those identified by

previous research, may actually be significant factors of the vulnerability of distribution

chains. A total of 38 barriers and only 17 driving forces are identified as factors affecting

security in physical distribution. Some of these include the impotence of the law enforcement

agency in allocating enough resources to combat freight crime, absence of security clauses in

standard contracts, complexity of legislation, etc. These barriers may force the identified

system to find its equilibrium point into a state condition where actors are not properly

working with security. The hypotheses found in this part of the research have not been

validated. However they highlight the importance for collaboration and working by

transforming the barriers into driving forces that could turn the present state condition into a

new equilibrium state in which stakeholders will handle security in a proper manner.

In addition, this study includes a survey to identify available measures to secure distribution

networks. 25 security routines, 14 security management strategies, and about 28 generic

security technologies are described.

Finally, an investment model is developed, based on the Quantitative Risk Assessment

approach, impacts’ judgments performed by a panel of security experts, System Reliability

Analysis, and Monte Carlo Simulation. It is then applied to calculate the NPVs and B/C ratios

(Net Present Values and Benefit-Cost ratios) to demonstrate the profitability of a limited set

of 511 technical security systems (nine single technologies and their combinations) against

road transportation cargo threats. Several technologies turned out to have rather short payback

time, but they are still not widely used. This confirms the importance and existence of other

relevant barriers that are hindering the enhancement of security in distribution chains. (Less)
Please use this url to cite or link to this publication:
author
supervisor
organization
publishing date
type
Thesis
publication status
published
subject
keywords
security investments., security measures in supply chains, causes of security vulnerability, antagonistic risks, security, physical distribution
pages
203 pages
publisher
Teknisk logistik, LTH
ISBN
978-91-976974-4-6
language
English
LU publication?
yes
id
297ec72c-10ac-44db-8880-e38453d21c8f (old id 1270605)
date added to LUP
2008-11-26 11:33:24
date last changed
2016-09-19 08:45:10
@misc{297ec72c-10ac-44db-8880-e38453d21c8f,
  abstract     = {Recent statistics and terror events testify an increased vulnerability of distribution networks.<br/><br>
Antagonistic threats as theft, counterfeiting, contamination and terror are burdening supply<br/><br>
chains with unexpected costs in form of lost cargo, production downtimes, lower customer<br/><br>
satisfaction, and higher transportation costs. Society is also worried about the possibility for<br/><br>
terrorists to exploit supply chains to smuggle terrorists or weapons for mass destructions.<br/><br>
Despite many governmental initiatives, very little is being done by supply chain and logistics<br/><br>
managers. Previous research points out globalization, JIT, weak prosecution of criminals so as<br/><br>
lack of business cases as the main causes hindering higher security in distribution chains.<br/><br>
However some of these trends, as globalization and JIT, cannot be reverted. At the same time,<br/><br>
the weak prosecution of criminals shouldn’t hinder stakeholders putting security measures<br/><br>
into operation.<br/><br>
This report performs an explorative study to understand the main reasons affecting the<br/><br>
vulnerability of physical distribution chains. Main actors are identified and their interaction<br/><br>
phenomena are hypothesized as barriers and driving forces of security in physical distribution.<br/><br>
Results show that it can be hypothesized that other causes, besides those identified by<br/><br>
previous research, may actually be significant factors of the vulnerability of distribution<br/><br>
chains. A total of 38 barriers and only 17 driving forces are identified as factors affecting<br/><br>
security in physical distribution. Some of these include the impotence of the law enforcement<br/><br>
agency in allocating enough resources to combat freight crime, absence of security clauses in<br/><br>
standard contracts, complexity of legislation, etc. These barriers may force the identified<br/><br>
system to find its equilibrium point into a state condition where actors are not properly<br/><br>
working with security. The hypotheses found in this part of the research have not been<br/><br>
validated. However they highlight the importance for collaboration and working by<br/><br>
transforming the barriers into driving forces that could turn the present state condition into a<br/><br>
new equilibrium state in which stakeholders will handle security in a proper manner.<br/><br>
In addition, this study includes a survey to identify available measures to secure distribution<br/><br>
networks. 25 security routines, 14 security management strategies, and about 28 generic<br/><br>
security technologies are described.<br/><br>
Finally, an investment model is developed, based on the Quantitative Risk Assessment<br/><br>
approach, impacts’ judgments performed by a panel of security experts, System Reliability<br/><br>
Analysis, and Monte Carlo Simulation. It is then applied to calculate the NPVs and B/C ratios<br/><br>
(Net Present Values and Benefit-Cost ratios) to demonstrate the profitability of a limited set<br/><br>
of 511 technical security systems (nine single technologies and their combinations) against<br/><br>
road transportation cargo threats. Several technologies turned out to have rather short payback<br/><br>
time, but they are still not widely used. This confirms the importance and existence of other<br/><br>
relevant barriers that are hindering the enhancement of security in distribution chains.},
  author       = {Urciuoli, Luca},
  isbn         = {978-91-976974-4-6},
  keyword      = {security investments.,security measures in supply chains,causes of security vulnerability,antagonistic risks,security,physical distribution},
  language     = {eng},
  note         = {Licentiate Thesis},
  pages        = {203},
  publisher    = {Teknisk logistik, LTH},
  title        = {Security in Physical Distribution - Causes, mitigation measures and an investment model},
  year         = {2008},
}