Supply Chain Canada: Criminally exposed

MISSISSAUGA, Ontario: Chris Mathers knows who make the best supply chain professionals. The trouble is, they’re far from ideal employees.

“Bad guys understand the supply chain better than anyone else,” he said. “Of course, they’re very hard on their contracts and their subtrade. If only you could kill a guy for not bringing stuff in on time, your supply chain would work better too.”

Mathers is president of his own security and risk consulting firm Chris Mathers Consulting Inc. He has a background in law enforcement and experience working undercover for a number of agencies including the Royal Canadian Mounted Police, the US Drug Enforcement Administration, and the US Customs Service. As part of those stings, he often worked on the supply chain side of crime and was involved with people who illegally moved money and goods around the world.

Speaking at Supply Chain Canada’s 45^th Annual Conference and Trade Show, Mathers described some of the international money laundering and smuggling operations he was familiar with, and explained how efficiently those who run illicit supply chains operate.

“These are the kind of people you’re up against. And the bad news is, some of these people work for you.”

He said that warehouses and distribution centres are often the targets of theft by those involved in organized crime. Additionally, he said they are often places where activities such as drug dealing occur and drug use occur.

“People are using drugs in your plants and warehouses and that’s a safety issue, a health issue and an absenteeism issue.”

In order to combat potential losses due to theft and to keep other criminal actions at work, Mathers said businesses need to take preventative measures, including running frequent background checks on all employees.

He also said that organizations need to ensure the physical security of their premises. This involves installing fencing, gates, and locking devices, implementing key controls, and monitoring and securing parking lots.

Additionally, IT systems need to be kept robust, not just for business reasons, but so they can be used to accurately determine inventory levels, and indicate when there might be losses due to theft.

He also cautioned businesses to be aware of their relationships with foreign companies and cited an example where a bank in a foreign country that did business with many American companies was taken over by people with ties to organized crime, unbeknownst to the bank’s US business partners.