Better Supply Chain Analytics for Clothing Manufacturer
The 400 miles of the Pan American Highway between Nicaragua to the Port of Puerto Cortés in Northern Honduras is a notoriously tough stretch. Dubbed the ‘highway of death’ by Smithsonian magazine, it is rugged, inhospitable terrain exacerbated by the presence of organized gangs such as MS13. And for an international apparel company—one that routinely sends quarter-million-dollar shipments along the route—it was a dangerous black hole.
The company was using GPS services to track shipments along the supply chain route, but location signals were often imprecise and repeatedly dropped altogether as trucks traversed the mountainous territory. The extended gaps in service complicated efforts by the company’s shipping and receiving department to drive efficiencies and injected significant risk into its supply chain. With no insight into the location of shipments, often for hours on end, it was impossible to know if hijackers were making off with valuable containers or if they were progressing safely to port.
Need for a Better Approach
Lack of reliability was only part of the problem. The technology also didn’t come cheap. Costs for what was an unreliable and inefficient service had ballooned to $45 per shipment, a significant add-on when multiplied by the company’s 25,000-plus annual shipments along the route. If the service had provided true visibility into its supply chain the cost would have been justifiable. But to spend more than a million dollars yearly on a solution, and still be forced to merely hope that shipments were safe, was unsustainable.
Frustrated and a little pessimistic, the international clothing manufacturer’s vice president of global corporate security asked U.S. Security Associates (USA) to take a crack at its dilemma. It needed an “always on” solution at a price it could afford. And, if possible, it wanted a level of clarity on shipments that could drive supply chain accuracy and precision tracking.
USA designed a tailored solution that fit its client’s needs that used CTAP-certified GPS devices installed with SIM cards from all major cell providers along the route. The devices, fastened and secured to each shipment container, offer redundancy and strong location signaling at all points along the treacherous route, as it switches from one provider to the next. Monitoring of shipment movements was then integrated into USA’s Security Command Center in Mexico City.
Unreliable tracking technology posed significant risks to a manufacturer’s $250,000 shipments along the Pan American Highway in Central America. U.S. Security Associates took up the challenge—and delivered a solution that now provides 99.96% dependability at 51% cost savings—and drives supply chain efficiencies.
Did it work?
Armed with the new technology solution, USA monitored 34,000 shipments in the first 15 months post implementation. The success rate—trips that met the client’s “always on” mandate—was an astonishing 99.96 percent. And not a single hijacking event.
The manufacturer would have been pleased had benefits stopped there, but the added supply chain visibility and enhanced security also cost less than the company had been paying for its hit-and-miss technology.
Significantly less. Instead of the $45 per-shipment expense to which its old service had swelled, USA is delivering its superior service for about half per shipment. In the first 15 months, the client netted $782,000 in savings. With its number of shipments increasing steadily, the company is poised to push past the million-dollar mark in savings in the years ahead. Was the client pleased? “It’s better security at lower cost—and that’s always a winning formula goal,” explained a senior operational executive at USA.
Pleased and content are not synonymous
Monetary savings already in hand, the clothing company is now turning to USA to leverage even more value from its highly reliable security tracking technology. With a consistent data stream from which to work, USA is developing a range of key performance indicators to help the clothing company improve its supply chain operations.
Able to constantly track shipment containers, the company’s shipping & receiving department now has the visibility it needs to hold contractors accountable, speed delivery times, identify problem personnel, track compliance with shipping procedures, identify billing discrepancies, and to measure other areas of continuous quality improvement.
“We have teamed with the software engineers to establish data fields that the client finds useful and to deliver a range of automated reports that they want to see,” explained the USA official. The company is now able to answer key questions that it previously couldn’t, such as: Did the Shipping Team cover security requirements with the driver? Did the driver have excessive dwell times during transit? Did the driver follow the established primary route?
The company will also be able to use the data to measure whether shippers and other contractors are meeting metrics required under service agreements. If contractors fail to meet objectives, the company will have the ability—thanks to its new data collection—to negotiate financial rebates or more favorable contract terms.
Piqued by the initial value it is enjoying from its data cache, the manufacturer is continually working with its USA partner to identify additional ways to leverage and share the data streamed by the tracking devices to USA’s monitoring center. “Now that they’re seeing added benefits from the ability to reliably track shipments, they’re like, ‘what else can we do?’”
U.S. Security Associates (USA) is the market-leading, wholly-owned American, full-service safety and security solutions provider. With over 160 locally-responsive offices, international locations and over 50,000 dedicated professionals, they offer the most complete array of physical security, remote surveillance, and global consulting and investigations to ensure better outcomes for thousands of clients and a range of industries. Innovative applications of leading-edge, proprietary technology enable USA to rank annually among the world’s best training companies, sustain the highest standards of quality, and underscore world-class customer service with unparalleled accountability. USA’s rise as one of the largest innovative security solutions leaders is a natural byproduct of these differentiators which enables the company to provide the most Safe. Secure. Friendly.® environments for people, assets, and brands. For more information, contact us here.