TARGET GAINS FROM ALLIANCE ON SECURITY

Katherine Bowers

ORLANDO, Fla. -- Through its pro-active alliance with the federal government, Target Corp. is stepping up its security strategy for imported goods and helping smooth the inspection process for its products at U.S. ports.

So reported Kelby Woodard, Target's director of supply chain asset protection, in a presentation on supply chain security at the recent International Mass Retail Association's Annual Convention & Business Development Forum. The convention, which concluded Sept. 16, took place here at the Gaylord Palms Resort & Convention Center.

In particular, Woodard outlined Target's alliance with C-TPAT, the Customs Trade Partnership Against Terrorism, launched after Sept. 11, 2001, as a joint government-business venture to safeguard the supply chain.

Minneapolis-based Target -- the third-largest U.S. importer behind Wal-Mart and Home Depot -- realized the full benefits of its membership in C-TPAT last September, Woodard said. That was when Target had six containers aboard the Palermo Senator, the foreign cargo vessel suspected of carrying radioactive materials that ended up quarantined off the East Coast for several days.

"Because we'd been working with the government, when they started combing through that ship, I could get on the phone and say from a risk-level standpoint, 'Look elsewhere first,"' he said.

"If you're not in conversation with the government about your containers," he added, "expect 100% to be inspected."

According to Woodard, senior Bush administration officials have been vocal about how seriously they take risks to commercial shipping, citing it as one of the areas they believe terrorist agents are studying.

If even a single cargo container explodes in a West Coast port, those officials promise "a blanket shutdown" that would "make last summer's port strike look like nothing," Woodard said. "The supply chain belongs to everyone. It's like climbing Mount Everest. We are roped together, and we'll either make it to the top or perish together."

Woodard urged retailers and importers not only to join C-TPAT, but to design their own specific security measures that go beyond C-TPAT's provisions.

Citing Target's practices, he recommended profiling countries based on security risks, bringing sourcing and asset protection management into cross-functional meetings to discuss global risk, and using outside contractors to audit foreign factories for security.

He also touted technologies like radio frequency identification (RFID) chips and light sensors as a way to make the supply chain safer. "Smart containers could shave time off getting things through customs here and abroad," he said. "Wouldn't it be important to know, for instance, if a container arriving at port had seen light inside of it?"

Target has been closely involved with C-TPAT since its founding after Sept. 11. In exchange for compliance on a checklist of security measures, C-TPATimporters would be considered "lower risk."

Large U.S. corporations would be better off voluntarily writing new policing measures, the C-TPAT theory holds, than waiting for the government to develop what would likely be more cumbersome regulations on its own. Now, with the threat still deemed high, government has been tapping additional agencies and committees to review shipping security.

That means "we need to drive C-TPAT to the next level, to have it prove itself to government," Woodard said.

For its part, Target has developed Business Partner Management, an in-house data management system allowing sourcing staff to review country profiles and weigh a region's risks against its benefits.

"Just like lead time, [security] has to be one of the factors you weigh in your sourcing decisions," he said.

Target uses its sourcing offices in 54 countries as ground-level intelligence agencies, giving headquarters briefings on everything from items sold at the flea markets to the status of local elections. From that, Woodard's team develops a global stability forecast that drives procurement decisions.

In recognition of its efforts, Target has "convinced the government we take it seriously, with dedicated resources to the issue," Woodard said, adding "we will have advanced warning if there is going to be a blanket [border] shutdown and priority in restarts."