Supply chain operators can cut the risk of cargo theft in the warehousing and distribution sector by sharpening their focus on inventory management processes like systemic stockholding and order flow, according to the logistics insurance and risk management provider TT Club.
Without effect inventory management, risks to goods escalate in environments characterized by confusion and disorganization, London-based TT Club said in an analysis of past claims.
“A failure to exercise such systematic control can have enormous risk consequences for security, reputation and contractual liabilities,” TT Club Logistics Risk Manager Josh Finch said in a release. “Inventory management is an aspect of the supply chain that often runs quietly in the background until something goes wrong. Small issues can quickly turn into large and costly errors if they are not observed and rectified.”
One key to sound inventory management and error mitigation is to ensure that actions taken in one system are recorded in others, by deploying robust data interfaces between the various software platform used to manage the flow of goods, including warehouse management system (WMS), order management system (OMS), transportation management system (TMS), and enterprise resource management (ERP) products. That approach supports traceability throughout the supply chain, uncovering any discrepancies promptly, the firm says.
“Stock that is not traceable is at risk,” Finch said. “It may be stolen or may simply go missing, making it difficult to determine where the failure has occurred. It is crucial therefore that supply chain operators responsible for managing inventory seek to maximise traceability throughout the entire journey of a particular item of stock.”
