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Supply chain executives can take some comfort in the latest numbers from FreightWatch International's US cargo theft report for 2010, which showed that the loss of consumer electronics products to thieves declined in both the number of cargo theft incidents and the average value of electronic goods stolen.
The study revealed that there were 174 incidents in 2010 compared with 196 incidents in 2009. Also, the average value of electronic goods stolen declined from $814,000 in 2009 to $512,000 in 2010.
The drop in consumer electronics theft ran contrary to overall trends, which showed that cargo theft rose by 4.1 percent in 2010, to 899 recorded theft incidents, the highest on record. With an average of 75 incidents per month, the manufacturing supply chain sustained full truckload/container losses at a rate of 2.5 incidents per day. Of the 899 incidents, 724, or 81 percent, were full truckload or container thefts, and 31 were warehouse burglaries.
Dan Burges, corporate director for Global Intelligence at FreightWatch International, told me that the main driver for the decline in consumer electronics theft was that supply chain managers are far more diligent in applying additional security measures to consumer electronic goods that are in hot demand.
In the electronics product category, FreightWatch recorded 42 cases of television theft (the most of any single product), 33 computer/laptop hardware thefts, and 15 cellphone theft incidents. This is the second year in a row in which televisions were the products most stolen. Of note, 61 percent of all electronics thefts occurred in the states of California (52), Florida (32), and Texas (22).
While a decline in theft of consumer electronics is good news, supply chain managers shouldn’t rest on their laurels. In fact, there’s plenty to be concerned about, according to another study from {complink 7426|Gartner Inc.} titled “Predicts 2011: Global Logistics Leadership a Strategic Imperative.”
One of the report’s key findings was: “Supply chain security has taken a back seat to cost reduction during the last three years. A major port disruption is likely within the next five years, however, which will force SCM organizations to formalize risk management.”
For his part, Burges recommends that electronics supply chain managers develop stringent in-transit security protocols, which should be contractually agreed upon with every vendor in their supply chains. Further, the process should be regularly audited to ensure compliance.
While electronics supply chain managers seem to be enjoying some success in managing theft, there’s never an excuse to be complacent in developing risk management processes, or failing to apply the right technology to mitigate supply chain disruption of this kind.
Click here to read the full report from FreightWatch.
I wonder how much cost has been involved to prevent this kind of theft.
That's a practical point, all right. Based on those numbers, a cost of $300,000 to prevent theft would not yield a net gain.
I feel new technology should be inherited in order to track the goods more efficiently once it has been despatched out of factory and also to add additional officers to strengthen the supply chain. all these will definitely increase the cost on consumers and companies.
Stealing a container at a port or during trucking must be a huge undertaking. Containers can be and are tracked from the point of release to the port; and then once they leave the port confines. I imagine bogus truckers just drive off with these containers? Wow.
The ratio of cost to prevent theft vs. the cost of the items stolen has to make sense. While the value of the goods is over $500K, the cost is considerably lower. It may be easier for the companies to write off the stolen goods than invest in technology or elaborate methods to prevent the theft. I understand no one wants to see their goods stolen, however, it is still a cost issue at the end of the day.
Yes, but at the same time, if one doesn't invest in the security measures, the losses would likely be much higher.
Companies should concentrate on an effective security program, which must be well planned and combine technology with robust security procedures.Screen and train employees about security awareness and know them about the places which has more chances of theft and which product has high ratio of lost.
Using technologies like GPS on borad tracking to moniter vehicles will reduce the chances of theft.
Besides this, there are other risks such as pirate attack as well.
Electronics theft is similar to any pther product expect most of the times the product have individual serial numbers to actually include the traceability into the products. Only when the OEM's are badly hit by the product theft, they might start worrying. Othereise this looks like an every day business and to avoid this the companies may need to issue all the product in the future as a software license basis.
Does the study show if the decline has anything to do with implementation of RFID tags or other electronic security systems? For years it's been praised as a great technology that will help reduce this type of problems.
Is the complete system still too expensive? Are the individual tags too expensive?
Hi Mr. Roques,
The report didn't comment on the use of RFID tags or other security systems. Essentially, the report looked at the types of consumer goods that were stolen, where they were stolen and the cost of these goods.
As far as I'm concerned, security can always be improved at various stages along the supply chain.
Thanks for your comments.
Nicole
I was reading that Pfizer implemented RFID, specially in their Viagra product to reduce theft and counterfeiting. Don't know how recent that news is, because I don't know if RFID is still a technology to watch or if it's being replaced with something else. Any thoughts here?
I hope the chips weren't in the pills? Maybe it's an effort of Pfizer to track its pharmaceutical users.
haha! I seriously doubt that Pfizer is putting chips in the actual pills (don't think the FDA would be happy about it) but to the cases that contain several hundres, thousands of them.
I would believe that if some companies didn't do things the FDA doesn't want them to anyway… (aka get what we need now & worry about the consequences later).
I seriously doubt that Pfizer will put their revenus in jeopardy by adding a RFID tag (or something else, for that matter) that the FDA doesn't approve.