TRIGGER 1

Observer’s Self study Memo

Problem:

What are the challenges of outsourcing?

Learning Objectives:

How to minimize the risk of thefts? (in supply chain)

How to make a good outsourcing strategy?

How does black market affect the supply chain?

How to minimize the risk of thefts? (in supply chain)

I don’t think training in self-defense for the drivers would help that much, since it seems like the thieves use more modern ways of stealing the cargo, e.g. by technology.

The shippers should be extra careful when dealing with a new company that doesn’t have a track record or has been inactive for years. You should stay in contact with the police, and anti-cargo theft forces, so that you get to know the hot spots to avoid, regional trends and the latest way of theft. You should also research yourself where thefts are occurring regularly, and how to avoid those places while making your route. Communicate regularly with dispatchers and home offices. Use a strict identification method, one that incorporate pre-notification of both the transportation company and the name of driver at least.

Try to stop as little as possible, so that you can keep your cargo moving, to minimize the risks. When stopping park in a secure location with security cameras. Invest in high security locks to secure your cargo while it’s not on the move.  (Travelers, 2018)

By investing in a third-party company that prioritizes security, it can ensure that the trucks always have a safe place to stop at throughout their routes. Fenced yards have security officers guarding the yard, as well as security cameras.  The drivers should always be aware of their surroundings, see to that their trucks and trailers are locked properly, and immediately report any suspicious activity or behavior to the authorities. (Supply Chain Link, 2016)

You can hire a team of drivers who can switch driving, instead of taking longer breaks, to prevent the risk of getting hijacked during a break. By mandating a certain number of kilometers for the drivers to drive until taking a break, it prevents the chance of being followed from a pickup location to the closest stop. During the breaks, drivers should use tail to tail parking to block the entrance to the trailer. You should also use SkyBitz products to mainintein visability over the trailers and containers while on the move. (Ackerman, J. 2014)

How to make a good outsourcing strategy?

You should clearly define the scope and schedule your projects. You should do a thorough research of your service provider and evaluate them just like you’d do for hiring a full-time employee. Look for people with the right experience for the job, don’t only look at the price. Make a contract in writing, so that you’ll have the law on your side in case something would happen. (Crosley, K. 2016)

How does black market affect the supply chain?

The black-market effects the numbers a company will use to calculate their supply output. If a company expects to sell a certain amount, and stocks up, but then the numbers decrease because of the black-market, a business will have overstocked inventory. The goods might also get a smaller value, than the black-markets goods, which would result in a lower demand for the product. (Vitez, O 2017)

When the government makes a product illegal, a black market is subsequently created. There is a drop in supply, since the penalties for selling the illegal product makes the people change into other industries. There is also a drop in demand, since the prohibition of possession of the certain product deters some consumers form wanting to buy it.

(Mike, M. 2017)

Sources:

Ackerman, J. 16.2.2018. Prevent cargo theft: how to prepare your supply chain and avoid losses. Loaddelivered. https://www.loaddelivered.com/blog/prevent-cargo-theft-how-to-prepare-your-supply-chain-and-avoid-losses/ Accessed: 16.1.2014

Crosley, K. 9.9.2016. Top 10 tips for outsourcing success. The Balance.

https://www.thebalance.com/top-tips-for-outsourcing-success-1200436 Accessed: 4.2.2018

Mike, M. 27.10.2017. The effects  of a black market on supply and demand. ThoughtCO. https://www.thoughtco.com/effects-of-black-markets-using-supply-and-demand-1146967

Supply Chain Link, 7.12.2016. A secure supply chain – reducing cargo theft risk. https://www.nfiindustries.com/blog/a-secure-supply-chain-reducing-cargo-theft-risk/ Accessed: 4.2.2018

Travelers, 2018. 5 tactics cargo thieves use and how to help prevent them. https://www.travelers.com/resources/supply-chain-management/5-tactics-cargo-thieves-use Accessed: 4.2.2018

Vitez, O. 26.9.2017. How does the black market affect the supply & demand of today’s economy?. Bizfluent. https://bizfluent.com/facts-7287603-black-supply-demand-today-s-economy-.html