when security is deployed for the logistic industry: elisa, a case history

When security is deployed for the logistic industry: ELISA, a case history Columbia Business School - Columbia University - New York, NY November 19 2012

november 19 2012 | [email protected] | @StefanoOrsenigo

Meet ELISA: Electronic Locking Interactive Security Apparatus


General Market Concepts


Quality


In business, engineering and manufacturing, quality has a pragmatic interpretation as the non-inferiority or superiority of something; it is also defined as fitness for purpose. Managing quality is fundamental to any activity and it implies: having a clear understanding of all related aspects, measuring performance and taking action to improve.

“Being sure that a product arrives safely and undamaged to the final customer is obviously an aspect of its quality”


Customer satisfaction


a measure of how products and services supplied by a company meet or surpass customer expectation. In a competitive marketplace - where businesses compete for customers - customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy. It is therefore essential for businesses to effectively manage customer satisfaction.

“Making sure that a product arrives safely and undamaged to the final customer is obviously closely tied to that customer’s satisfaction!”


Cost optimization


Adjusting a/all process/es so as to optimize some specified set of parameters without violating some constraint is known as process optimization.

The most common benefits which derive from a successful optimization are: minimizing cost, maximizing throughput and/or efficiency.

“Making sure that all processes used to assure that the product arrives safely to the final customer are the best possible, obviously results into a more fluid and cost-effective system, one which gives the manufacturer better quality and higher customer satisfaction (and one that, therefore, can improve the company’s standing in the market)”


Specific Keywords (or Concepts)


Security:


The degree of protection necessary to safeguard something (or someone) against danger, damage, loss, and crime. As a form of protection it includes all structures and processes that provide or improve security as a condition. It also implies a condition in which one becomes AWARE of the possibility that, in its development, a system can evolve into some unwanted states.

Risk:


The Oxford English Dictionary defines risk as the: (Exposure to) the possibility of loss, injury, or other adverse or unwelcome circumstance; a chance or situation involving such a possibility. Risk is therefore the potential that a chosen action or activity (including the choice of inaction) will lead to a loss (an undesirable outcome). The notion implies that a choice having an influence on the outcome exists (or existed).

Analysis:


The process of breaking a complex topic or substance into smaller parts, to gain a better understanding of it. Analysis, in business, is a fundamental step to identify needs so that solutions can be devised and implemented. It involves the study of the activity conducted and of all relative statistics, environment, procedures, workforce, risks and other pertinent aspects, with the objective of producing an assessment of the situation.

Management:


All the activities put in place when conducting an activity. Proper management includes procedures for all possible stages of the activity: normal as well as critical. In the area of security, proper management implies devising: •  preventive measures (actions put in place to

prevent the event of a possible risk) •  protective measures (actions put in place to

protect people and goods in the case of an hazard)

The cycle of security Risk Analysis

knowledge & awareness

Risk Assessment balance & selec6on

Risk Management ac6on & measure


Both awareness and prior knowledge are to be considered a method as well as an objective and as such they require an holistic approach, considering the interdisciplinary and the global issues related to the subject of security.


Security deployed for logistics


the landscape


Globalization and the consequent aperture of new markets requires that companies face new and bigger challenges, to answer with quality and efficiency to client’s needs, especially in terms of flexibility, cost optimization and attention to the environment.

This has required, in the last decade, a continuous push for innovation in industrial strategies, in the organization of the operational processes and in system management.

Obviously, these development involve the field of logistics - as well as the supply chain infrastruc- tures and the systems used to manage them - which has also evolved to cater to the progressive demand for new solutions and new approaches.


Logistic processes, thus, have grown and have been implemented with a series of technical and organizational optimizations, well supported by a technology that is increasingly becoming more efficient and cost-effective.


Nonetheless, to date, little attention (aside from the insurance point of view) has been placed on the aspects that relate to the industrial security of logistic processes and to its components.

Failing to acknowledge the consequences of such oversight can heavily impact - in terms of quality as well as of economical and financial implications - on the business.


Such consequences are readily accessible in daily news: property, information, equipment, supplies, personal belongings or intangible data, all can be stolen or damaged and the weakest link in the supply chain is the process that takes a product from the manufacturer to the consumer is the road the product rides to reach the final user.


It is not easy, in fact, to monitor effectively the entire path the goods travel to go from point A to point B, primarily for two reasons:

•  part of this process (like transportation or stock- age) is often assigned to third-party providers

•  consequences of damaging acts by internal

employees are considered more important than those perpetrated by other people, outside the company.


Logistics operators are obviously the ones primarily affected by the “holes” in these processes, as they are responsible for stocking and moving the goods from one step to the next in the supply chain.

There are no certain statistics, although some researches quantify the security issue in a value that goes from the 0,5% to the 1% of gross income.


DHL has declared that, only in Europe, over 8 billion Euros in value of high added-value goods are stolen each year.

Not to mention the damage derived by the loss in image by the company.


In such a complex and ever-changing environment the primary efforts need be focused on developing integrated products and services at an accessible cost, characterized by innovative high technologies.

The challenge? Delivering dynamic and sustainable answers to the ever-changing needs of logistics operators in the secure management of the supply chain.


ELISA: the project


In this landscape, therefore, the need to rethink the various processes involved appeared evident.

We chose to approach the issues with a methodological approach that implied the following, consequential activities:


•  Risk Analisys - to identify vulnerabilities, the probabilities of happening and the type of dangers and liabilities;

•  Risk Assessment - with the aim of balancing risks and actions and of selecting the best and more opportune interventions;

•  Risk Management - to apply the appropriate procedures and the best methodologies of management;


the risks


The analysis of the activities implemented in the entire logistic path evidenced how the security risk is directly tied to the increased incidence of certain factors: •  poorly controlled (or controllable) fluxes; •  increasingly small dimensions of products/goods; •  high added-value of products/goods; •  recyclability of products.

the assessment


The evaluation of the elements of risk allowed for the definition of a solution based upon an innovative Integrated Security Model founded on a systemic base rather than on a technological premise.

The system is built on a IOT (Internet of Things) platform that can offer at any time, through ITS (Intelligent Transportation Systems) and ALS (Advanced Logistic Services) solutions to assure the automatic traceability and recoverability of goods and products along the entire supply chain


This allows Logistic Operators to monitor without interruptions and in real-time the path followed by the goods, the resources and the premises/facilities, regardless of their location.

Obviously, this increases significantly the operative efficiency and the level of protection applied to the assets, allowing for more secure supply chains


Furthermore, these solutions address and resolve also, amongst others, some important issues related to the safety of the products: •  by preventing or deterring counterfeiting and

tampering; and •  by assuring the conformity of transportation

and stocking with the most different legal requirements


the solution: ELISA


An “intelligent transportation unit” made up by: •  a container, fit for logistic transportation; •  an integrated “smart” closing device.

The system is completed by the capability of an interactive connection with a Central Management Platform.

ELISA: the Apparatus


the innovative container


ELISA’s peculiarly die-cut cardboard container (subject also to a specific industrial patent) allows for a perfect homogeneity and geometric continuity which guarantees for excellent anti-burglary protection, while maintaining an elevated ergonomic quality and an equally high manageability.

the ”smart” closure


ELISA’s particular container is associated to a specially designed smart closing device.

Structurally, the closing device is composed of two elements of closure made of biodegradable plastic, one of which is immovably connected with the internal closing flap of the container. The other element is actively operative on the external closing flap.

The internal locking element is predisposed to accommodate different types (and levels) of technology, according to the operative requirements


The innovative structural characteristic of ELISA’s closing system is the perfect integration of different technological devices with the internal locking element.

This way, once closed, the container becomes “self-protecting”.


technological add-ons


The closing system can be integrated with scalable technological devices which can modularly add functionalities such as: •  simple identification and space-time localization

through R.F.I.D. (Radio Frequency Identification), •  sophisticated functions of security, control and

monitoring through ITS (Intelligent Transportation Systems), ALS (Advanced Logistic Services) and GPS (Global Positioning System)

connectivity


ELISA can exchange data and information with a remote Management & Control Platform through diverse standards of communication, such as N.F.C. (Near Field Comunication), GSM/GPRS or satellite.

adaptability


The innovative functional characteristic of ELISA’s closing system is its dynamic adaptability to any requirement/need that may be opportune in different situations for each parcel.

Summary of functionalities


Thanks to its innovative concepts and inventions, ELISA allows for:

-  monitoring the packing activity with respect to the “picking list” of the order, memorizing the qualitative and quantitative data that refers to the nature and/or the quantity of the goods held by the container


-  automate and optimize the different management and control processes on the entire logistic path of the supply chain, including:

•  traceability of the goods; •  correct loading sequence on the different

vectors; •  stock management and warehouse

restocking; •  automatic detection of attempted forceful

opening or tampering of container;


•  automatic detection of attempted theft or concealment of the entire package;

•  control of the conformity of transportation/ stocking of goods to ensure the respect of the required legal parameters and procedures (through the monitoring of the environmental characteristics detectable inside and outside the container);

•  permanent connection with a Management & Control Center, to exchange data and collect information in real time.


ELISA is based on an industrial patent, conferred with a high level of innovation and inventiveness which, do date, is extended over Europe, USA and Canada.


Conclusions


ELISA represents a good example of a new and innovative approach to security in the logistics context.

Through a rigorous scientific, technological and managerial approach, this system can guarantee operators in the field of logistics the utmost technical compatibility for every shipment and, from an economical point of view the best adaptability for most types of transportation needs.


Thank you for your attention (and patience with the language) Contacts: [email protected] @StefanoOrsenigo
