DRIVING FORCE

Since its creation 20 years ago, one of TAPA’s greatest strengths, and the reason it is recognised as the world’s leading Security Expert Network for everyone in the supply chain, has been the quality of its Manufacturer and Logistics Service Provider membership.

In the EMEA region, the Association’s membership is at its highest-ever level, with another 32 new member companies, Associate Partners and Security Service Providers joining in the first six months of 2018.

TAPA’s Manufacturer membership already includes strong representation from industries such as Technology, Pharmaceuticals, Clothing & Footwear, Cosmetics & Hygiene, and Tobacco but part of the TAPA 2020 growth initiative focuses on attracting more leading companies from other major industry sectors known to be severely impacted by cargo crime. One of these is the Automotive sector.

Over 12 months ago, TAPA EMEA’s Chairman, Thorsten Neumann opened dialogue with Volkswagen AG, one of the world’s leading manufacturers of automobiles and commercial vehicles and the largest carmaker in Europe. As well as encouraging Volkswagen Konzernlogistik to join the Association, he also wanted to gain a better understanding of the risks faced by a company with such a dynamic and diverse supply chain. At the start of 2018, Volkswagen Konzernlogistik joined TAPA EMEA and, in April, Slawomir Mrugalla, Security Manager, Volkswagen Group, and Jan Poppelbaum, Specialist/Logistics Planner, Volkswagen Konzernlogistik GmbH & Co. OHG, addressed TAPA’s conference in Warsaw to present an overview of the logistics network of Volkswagen and specific challenges of cargo crime.

“We are extremely proud to welcome VW to the TAPA Family. As with our Manufacturer members in other industries, we need the engagement of the largest companies across every sector because of the knowledge, expertise and intelligence they bring to our Association. My meetings with the leadership team at Volkswagen Konzernlogistik have provided a great opportunity to listen and learn about their business. I am excited by the active contribution they want to make to TAPA and to mitigating risks as part of their end-to-end supply chain strategy, not just in Europe but globally,” Thorsten said.   

“We value every TAPA member but we want them to proactively participate in what we do today, and to help shape our future. We are not simply looking to build a list of global brand names, we want to learn from these companies. To do that, we must ensure that TAPA continues to give back sufficient value through our Security Standards, Incident Information Service (IIS), training and networking to keep these companies onboard with us. I now have a clear understanding of the specific supply chain security challenges VW faces and we will connect these learnings to help further the development of our work.”

Headquartered in Wolfsburg, Germany, the Volkswagen Group comprises 12 brands from seven European countries: Volkswagen Passenger Cars, Audi, SEAT, ŠKODA, Bentley, Bugatti, Lamborghini, Porsche, Ducati, Volkswagen Commercial Vehicles, Scania and MAN. It operates 122 production plants globally, including 75 in the EMEA region. In the first six months of 2018, the Group recorded the best-ever first half year in its history, delivering 5.5 million vehicles to customers, including 958,600 new vehicles in June alone, up 4.1%.

To understand more about the scale of VW’s supply chain operation and the risks involved in moving such large volumes of high value, theft targeted parts all over the world, Vigilant spoke to Matthias Braun, Head of Digitization and Concept Development in Materials Logistics at Volkswagen AG.

How many products might you have moving in global supply chains at any one time?

In general, we run a network capable of delivering the material to produce more than 10 million  cars per annum, including different kinds of products for the production plants, from individual parts up to complex modules, and also covering the demands of the spare part network. This global network includes around 8,500 suppliers and hundreds of transportation companies delivering goods to 122 production sites and many more secondary destinations.

Can you provide a guide to the scale of thefts from automotive supply chains globally?

We cannot speak for the whole supply chain of the automotive industry, but we are well aware of the risk to thefts. This, combined with our network complexity, makes it important to focus more on this topic.

In terms of overall thefts from automotive supply chains, does your intelligence show these are increasing year-on-year?   

What we can see is that, based on our improved awareness regarding the process and a much better information network, we do get more reports of thefts within the last months. This makes our internal figures grow without any conclusion about real higher thefts. Another observation is that we see more and more variations in Modi Operandi which target specific elements of the supply chain and/or try to circumvent countermeasures taken.

What are the biggest risks to automotive companies when car parts are stolen and, presumably, then sold on using the black market?

This question requires looking at from a lot of levels or aspects. We need to reacquire the part itself, transport to the site (including any extra cost to expedite the shipment), which also causes process hazards. Especially in long-range connections, lower stock levels and, in cases where higher numbers of parts are stolen, production may be at risk. Additionally, there is also an impact on the after sales business. Besides commercial issues, there are risks regarding product liability, image and so on. They may also be used as a sample for product counterfeiting.

What actions is the automotive industry taking to make its supply chains more secure? 

We are connecting our partners to strengthen the supply chain by implementing awareness and security standards. Internally, we will further secure containers and trucks for endangered parts by developing our contracts and implementation processes, including technical measures. For dealing with this matter, organisations have to be capable of reacting in the same professional way as the offenders do with us.

What are the main types of cargo crime incidents suffered by the automotive industry?

In our case it is mostly criminal activity specially tailored to our supply chain processes, mostly trying to mask the thefts. The general risk, e.g. curtain slashing, plays a much smaller role. Fortunately, we also see a very low number of thefts by force. A newer challenge we see in rare cases involves false flag operations, which means loading a truck at a supplier`s site using false papers or faked identity and then never being seen again.

Volkswagen Konzernlogistik is a relatively new member of TAPA EMEA. What convinced you to join the Association and what are you hoping to gain from your membership?

To answer it shortly: networking opportunities, learning about standards and experiences of others, join the information network and staying up-to-date with initiatives and developments of standards which might benefit our network.

What are your first impressions of TAPA EMEA?

The first personal experience was the Warsaw conference. Very big, very professional and a very high concentration of knowledge. Add the opportunities to get in touch with supply chain security specialists of any branch and it was time well spent. It motivates us to get deeper into cooperation and broaden our knowledge base, e.g. by attending auditor classes.

How useful is the incident intelligence provided by TAPA’s Incident Information Service (IIS)?

We are using it but are still evaluating what we can do with it.

Do you plan to share incident intelligence data with TAPA’s IIS?

There are some first cases entered in IIS, but we are still gaining experience of the service. We see that on a general scale, from a political perspective, for example, sharing intelligence is the best way to raise awareness. Therefore, we encourage other companies within or outside the OEM industry to focus on this topic and to start getting active.

You will be aware of TAPA’s Security Standards for Facilities and Trucking. Are you keen for your suppliers to be TAPA-certified?

We will review this under economic viewpoints, taking in specific risks and general cost-value ratio. A lot of very basic things to do are either easy to implement or already in place, mostly in the context of quality management, if you know what you are doing and why. So, you can get some more security by raising awareness without generally pushing the costs up.

TAPA has a new Parking Security Requirements. In your opinion, how important is this initiative and does it have your support?

The issue of parking space shortages, both general and secure, is a major problem for any supply chain. It leads to disturbances, e.g. because the drivers miss their time-slots because they had to search for a place to rest. So, if there are investments in new infrastructures, please make them safe and secure for the drivers and for the goods they are carrying.

The majority of cargo crimes in EMEA involve attacks on trucks, usually when they are parked in unsecured parking locations. Looking forward, do you expect organised criminals to become even more sophisticated in the way they target supply chains?

During all times, crime has evolved to follow targets when they are evolving. This means like in general security concepts, you have to evaluate logistical megatrends, specific developments of your own business and the general progress of technology and society for their impacts and implications on your supply chain security. So, yes, we do expect that organised criminals will change the way they target supply chains as technological and other developments can be used to support their criminal intentions.