Supply Chain Dirty Secret of Drug DiversionGP0|#cd529cb2-129a-4422-a2d3-73680b0014d8;L0|#0cd529cb2-129a-4422-a2d3-73680b0014d8|Physical Security;GTSet|#8accba12-4830-47cd-9299-2b34a43444652017-08-01T04:00:00Z, Lilly Chapa<p>​Controlled substances were going missing at Hennepin County Medical Center (HCMC), and the hospital’s security investigator, William Leon, was determined to get to the bottom of it. So, at 11 p.m. on a Friday, Leon settled in for a night of observation at the Level I trauma center in Minneapolis, Minnesota. He kept a trained eye on one registered nurse who was suspected of stealing hydromorphone, an opioid pain medication, for her personal use.</p><p>HCMC has cameras set up in the medication room to monitor controlled substances, and Leon watched as the nurse began gathering prescribed medication for a patient in the emergency department. The process, called wasting, requires the healthcare worker to take a fresh vial or syringe full of medication and then dispose of the excess, leaving only the correct dosage—all with a witness present. Leon observed the nurse dispense a syringe of hydromorphone from the medicine cabinet, and, while a fellow nurse was signing off on the withdrawal, she placed the syringe in her pocket and pulled out an identical syringe, which Leon later learned contained saline. The nurse held up the saline syringe and wasted the required amount, tricking her fellow nurse, and left the room.</p><p>At this point, Leon knew exactly what was going on, and watched with increasing alarm as the nurse headed to a patient’s room in the orthopedic area of the hospital. “In that area, I knew immediately, this patient could have a broken bone—they were in intense pain and requiring this medication,” Leon says. “I see a lot of doctors standing around and I’m thinking ‘uh oh, this patient is going to get saline.’”</p><p>Leon raced to the room and saw that the doctors had given the patient the saline the nurse had brought up. “The patient was still screaming in pain and the doctor was frantically asking the nurse, ‘Are you sure you got the right dosage? Are you sure it was hydromorphone?’ and she was insisting she had,” Leon says. He called the doctor and the nurse into the hall and explained that the patient had just gotten saline and still needed the proper pain medication because the nurse had diverted the hydromorphone in the medication room. The doctor went to properly treat the patient and Leon called the nurse manager and the local sheriff’s detective in to begin an official investigation into the nurse’s actions.</p><p>Drug diversion in the United States is a nebulous problem that is widespread but rarely discussed, experts say. Whether in manufacturing plants, retail pharmacies, hospitals, or long-term care facilities, healthcare workers are stealing drugs—typically for their own personal use—and putting themselves, patients, and coworkers at risk. </p><p>“I hate to tell you, but if you have controlled substances and dispense narcotics, you’ve got diversion going on,” says Cherie Mitchell, president of drug diversion software company HelioMetrics. “It’s just a question of whether you know it or not.”</p><p>The scope and frequency of drug diversion is almost impossible to grasp, due in large part to how diversion cases are addressed. A facility that identifies a diversion problem might bring in any combination of players, from private investigators and local law enforcement to state accreditation boards or the U.S. Drug Enforcement Agency (DEA). There is no overarching agency or organization that records every instance of drug diversion in the United States.</p><p>Controlled substance management is dictated by a number of laws, including the U.S. Controlled Substances Act of 1971, which classifies substances based on how they are used and the potential for abuse. It also dictates how the substances are dispensed, and a facility may be fined if it does not comply. </p><p>The closest estimates of drug diversion rates come from people or organizations who dig up the numbers themselves. The Associated Press used government-obtained data in its investigations on drug diversion at U.S. Department of Veterans Affairs (VA) medical centers. Reported incidents of diversion at about 1,200 VA facilities jumped from 272 in 2009 to 2,926 in 2015, the data revealed, and the VA inspector general has opened more than 100 criminal investigations since last October. John Burke, president of the International Health Facility Diversion Association, extrapolated data he obtained from facilities in Ohio to estimate the presence of 37,000 diverters in healthcare facilities across the country each year. </p><p>Mitchell points out that any statistic derived from officially collected data still wouldn’t accurately reflect the extent of drug diversion in the United States. “There’s a lot of people investigators really suspected were diverters but had to be chalked up to sloppy practice due to a lack of concrete evidence, so any statistic is talking about known diverters who are fired for diversion,” she tells <i>Security Management</i>. “Even if you did have a statistic, it would be off because how do you incorporate those so-called sloppy practicers, or diverters who thought they were about to get caught so they quit on you and left? No matter what number you come to, it’s probably bigger in reality.”​</p><h4>Addiction and Diversion</h4><p>Although more people are paying attention to drug diversion due to recent high-profile cases and the current opioid epidemic in the United States, experts say they have been dealing with the same problems their entire careers. </p><p>“I can personally tell you that I dealt with the same issues 15 or 20 years ago that the healthcare arena is facing today, specifically in the drug abuse and diversion by their own hospital healthcare employees,” says Charlie Cichon, executive director of the National Association of Drug Diversion Investigators (NADDI) and a member of the ASIS International Pharmaceutical Security Council. “There are different drugs today, of course, than there were 20 years ago.”</p><p>Susan Hayes has been a private detective for healthcare facilities for more than a decade and says the opioid epidemic has magnified the drug diversion problem in recent years. “The opioid addiction in America has lit my practice on fire,” she says.</p><p>It’s no secret that opioid addiction has reached epidemic levels in the United States. In 2010, hydrocodone prescriptions were filled 131.2 million times at retail pharmacies alone, making it the most commonly prescribed medication, according to the Mayo Clinic. However, those are just the numbers that were legally prescribed—about 75 percent of people who take opioids recreationally get them from a friend or family member. According to the U.S. Centers for Disease Control and Prevention (CDC), approximately 52 people in the United States die every day from overdosing on prescription painkillers.</p><p>Healthcare workers are not immune to the draw of opioids. In fact, up to 15 percent of healthcare workers are addicted to drugs or alcohol, compared to 8 percent of the general population, according to the Mayo Clinic. </p><p>“Healthcare providers are in very stressful jobs,” Hayes says. “They all have problems. Nurses have emotional attachments to patients that they see die. Even orderlies have very stressful physical jobs, they’re lifting patients. Pharmacists can make mistakes that mean life or death. You have people that are already in very stressful situations, and now you give them access to drugs…. I think the combination is almost deadly.”</p><p>While a bottle of 30mg oxycodone tablets can sell on the street for up to 12 times its price in the pharmacy, most drug diverters are addicts using the drugs themselves. Because of this, diversion shouldn’t be considered just a security concern but a patient safety concern, Cichon says. He references several high-profile diversion cases in which the diverters used the same syringe full of medicine on both themselves and their patients, spreading bacterial infections and hepatitis. In one especially egregious case, a traveling medical technician with hepatitis C would inject himself with his patients’ fentanyl and refill the same syringe with saline, ultimately spreading the virus to at least 30 people in two states.</p><p>Unfortunately, experts acknowledge that most diverters don’t get caught until they have been diverting for so long they start to get sloppy. “The people who are your real problem are the people who are hiding in the weeds, not doing enough to get caught, and those are the ones you want to find,” Mitchell says. “The people they are finding now are the people that have the needle in their arm or somebody has reported them. You want to try to find them before that.”​</p><h4>Out of the Loop</h4><p>Hayes details the path of drugs through a hospital: a pharmacy technician orders the medication from a wholesaler, who will deliver them to the hospital pharmacy. The drugs are sorted and stocked in the pharmacy, where they will remain until they are brought up to the patient floors and stored in various types of locking medicine cabinets. When a patient needs medication, a nurse goes to the medicine cabinet and dispenses the drug for the patient. </p><p>Another ASIS International Pharmaceutical Council member—Matthew Murphy, president of Pharma Compliance Group and former DEA special agent—describes this as the closed loop of distribution. “Once a drug is outside of the closed loop, when it gets dispensed from a pharmacy or administered by a doctor, it’s no longer in the purview of DEA rules and regulations,” he explains. Drugs are most likely to be diverted during those times when they are in transit or exchanging hands, outside of the closed loop.</p><p><strong>Wholesalers.</strong> When fulfilling a pharmacy’s request for medication, wholesalers have just as much of a responsibility to notice if something is amiss as the pharmacy does. Whether it’s a retail pharmacy or a hospital pharmacy, wholesalers are responsible for cutting them off if they start to request unusually high amounts of opioids. </p><p>In 2013, retail pharmacy chain Walgreens was charged $80 million—the largest fine in the history of the U.S. Controlled Substances Act—after committing record-keeping and dispensing violations that allowed millions of doses of controlled substances to enter the black market. Cardinal Health, Walgreens’ supplier, was charged $34 million for failing to report suspicious sales of painkillers. One pharmacy in Florida went from ordering 95,800 pills in 2009 to 2.2 million pills in 2011, according to the DEA. </p><p>Hayes says the fine against the wholesaler was a wake-up call, and now suppliers use algorithms to identify unusual spikes in orders of opiates. Wholesalers can even stop the flow of medication to pharmacies if they believe diversion is occurring—which can be disastrous to a trauma center, Hayes notes.</p><p><strong>Pharmacies.</strong> To restock the shelves, pharmacy technicians compile lists of what medications they are low on to send to the wholesalers at the end of each day. Hayes notes that many pharmacies do not conduct a retroactive analysis on what is being purchased—which is why wholesalers must pay attention to any unusual changes in orders. She stresses the importance of constantly mixing up the personnel who order and stock medications. </p><p>“If you’re both ordering and putting away drugs, that’s a bad thing because you can order six bottles when you only need five and keep one for yourself,” Hayes notes. </p><p>Similarly, it is important to rotate who delivers the drugs to the patient floors. “John the technician has been taking the drugs up to the floors for the last 20 years,” Hayes says. “Well gee, did you ever notice that John drives a Mercedes and has two boats and a house on Long Island? He makes $40,000 a year, did you ever do any investigation into why?”</p><p><strong>On the floor. </strong>Experts agree that the most egregious diversion occurs during the wasting and dispensing process in scenarios similar to the incident Leon witnessed at HCMC. Mitchell explains that all hospitals have different wasting procedures—some require nurses to waste the medication immediately, before they even leave the medication rooms, while others may have a 20-minute window. Other hospitals may prohibit nurses from carrying medication in their pockets to prevent theft or switching. ​</p><h4>Investigations</h4><p>Any company involved with controlled substances, whether manufacturing, distributing, or dispensing, must be registered with the DEA and must adhere to certain rules and regulations—which aren’t always easy to follow.</p><p>Murphy, who worked for the DEA for 25 years, now helps companies follow mandates he calls “vague and difficult to interpret.” For example, DEA requires anyone carrying controlled substances to report “the theft or significant loss of any controlled substance within one business day of discovery.”</p><p>“This hospital had 13 vials of morphine that ‘went missing’ and someone called me in to find out why,” Hayes says. “They asked me, ‘Are 13 vials substantial or not? Do I really need to fill out the form?’ I counsel them on what’s substantial because the language is very loose.”</p><p>Depending on the frequency or significance of these or similar forms, the DEA may open an investigation, Murphy explains. “DEA will look at these recordkeeping forms and determine if in fact everything has been filled out correctly, that they have been keeping good records,” he says. “If DEA determines that they are lax or have not been adhering to requirements, there could be anything from a fine to a letter of admonition requiring corrective actions.” In more serious cases, DEA could revoke the registration because the activity or behavior was so egregious that it was determined that the facility is not responsible enough, Murphy explains. If a facility loses its DEA registration, it cannot dispense controlled substances.</p><p>However, DEA does not get involved in every suspected case of diversion. “There are only so many DEA diversion investigators, so they have to prioritize what they get involved with,” Murphy says. “It has to be pretty egregious for them to get involved to seek a revocation or fine.”</p><p>That’s where people like Hayes come in. “They want me to come in instead of DEA or law enforcement,” she explains. “I’m a private citizen, I understand law enforcement procedures, and I can help them get at the root of the problem before they call in law enforcement.” </p><p>After an investigation into a diverter is opened, it is unclear what happens to the offender. Hayes says that she typically gathers evidence and gets a confession from diverters, at which point her client calls in law enforcement to arrest them. Leon, who was in charge of diversion in­vest­igations at HCMC for 20 years before becoming a consultant for HelioMetrics, was able to investigate but not interview suspected diverters. He tells <em>Security Management</em> that he would call in a sheriff’s detective to interview the suspect.</p><p>Although most diverters are fired when their actions are discovered, they are not always arrested—it’s often at the discretion of their employer. Depending on the diverter’s role, state accreditation boards—such as those that license nurses and pharmacists—would be notified and could potentially conduct their own investigations. </p><p>Cichon cautions that some hospitals hoping to avoid bad press and DEA scrutiny may look for loopholes. “We found out through the course of investigations that if someone resigns and was not sanctioned it may not be a reportable action,” he says. “If we allow this person to resign rather than take action against him, then we don’t have to report it.”</p><p>Murphy notes that DEA typically has no role in individual cases of diversion. “If the diverter has a license from one of those state agencies, usually it’s required that they be reported, and then it’s up to the board how they proceed with the personal license of the individual,” he says. The DEA doesn’t regulate the personnel—that’s up to the state and the facility. </p><p>Cichon notes that the lack of standards when addressing diversion makes it more likely that offenders could slip through the cracks and move on to continue diverting drugs at another facility. “Unfortunately, there are different laws and statutes in every state that set up some sort of reporting requirements,” he says. “There are medical boards, nursing boards, pharmacy boards, and not every worker even falls under some sort of licensing board for that state.” ​</p><h4>Staying Ahead</h4><p>Due to the stigma of discovering diverters on staff, many hospitals just aren’t preparing themselves to address the problem proactively, Cichon explains.</p><p>“This is something that is probably happening but we’re not finding it,” he says. “The statistics I’ve seen at hospitals that are being proactive and looking at this are finding at least one person a month who is diverting drugs in their facility. If a 300-bed hospital is finding one person a month, and Hospital B has the same amount of staff and beds and is finding nothing…”</p><p>NADDI has been providing training for hospitals to develop antidiversion policies. Cichon notes that many hospitals throughout the country have no plan in place to actively look for diverters. “As big as the issue is, many of them are still just not being that proactive in looking at the possibility that this is happening in their facility.”</p><p>Cichon encourages a team approach to diversion that acknowledges diversion as a real threat. “Not just security personnel should be involved with the diversion aspect,” he says. “Human resources, pharmacy personnel, security, everyone is being brought into this investigation, because the bigger picture is patient safety. The diverting healthcare worker typically isn’t one who’s going to be selling or diverting his or her drugs on the street, but they are abusing the drugs while they are working.”</p><p>Leon worked hard on diversion prevention at HCMC after discovering a surprising pattern: almost all of the diverters he investigated wanted to be caught. “What got me on this path of prevention was observing the nurses as they would admit to what they did,” he explains. “More often than not the nurses would say, ‘I wanted somebody to stop me. I needed help, didn’t know how to ask for it, and I was hoping somebody would stop me.’ That’s pretty powerful when you’re sitting there listening to this on a consistent basis.”</p><p>Leon implemented mandatory annual training for everyone in the hospital—from food service workers to surgeons—to recognize the warning signs of drug diversion. “If a nurse or anesthesiologist or physician is speaking with you and telling you they are having these issues, then you should say something,” Leon explains. “It’s not doing the wrong thing—you’re helping them, and that’s the message we sent out. Look, these individuals are not bad individuals. Something happened in their lives that led them down this path.”</p><p>Leon also had cameras installed throughout the hospital that allowed him to observe diversion but also kept his investigations accurate. “We had a nurse who was highly suspected of diverting,” he says. “With the cameras I was able to show that she wasn’t diverting, just being sloppy. The employees appreciated the cameras because it showed they weren’t diverting medication, they just made a mistake.”</p><p>Over time, HCMC personnel became more comfortable coming forward with concerns about their coworkers. Before the facility started the annual training, Leon caught at least one diverter a month. Before he retired, he says, that number had dropped to one or two a year.</p><p>“The success of our program at HCMC was the fact that we paid more attention to educating rather than investigating,” Leon says. “You have to keep those investigative skills up, but you have to spend equal amount of time on prevention and awareness.”</p><p>Mitchell points to algorithmic software that can identify a potential diverter long before their peers could. Taking data such as medicine cabinet access, shift hours, time to waste, and departmental access allows software to identify anomalies, such as a nurse whose time to waste is often high, or a doctor who accesses patients’ files after they have been discharged. </p><p>“Most people are using the logs from the medicine cabinets trying to do statistical analysis,” Mitchell explains. “You find out 60 days or six months later, or you don’t see that pattern emerge by just using one or two data sets. That doesn’t help. The goal is to identify these people as quickly as possible so they are no longer a risk to themselves or the patients or anyone they work with.”</p><p>Murphy encourages facilities to be in full DEA compliance to mitigate diversion. “If somebody wants to steal or becomes addicted, they are going to find a way to do it, and sooner or later they are going to get caught, but then there’s a problem because the hospital has to work backwards to determine how much was stolen and reconcile all that,” he says. He also notes the importance of following up internally on each diversion case and figuring out what went wrong, and adjusting procedures to address any lapses. </p><p>“Every entity that has a DEA program should have diversion protocols in place because if they don’t they are playing Russian roulette with theft and loss and their DEA registration,” Murphy says.  ​</p>

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 You May Also Like... Chain Security: A Comprehensive Approach <p dir="ltr" style="text-align:left;">​<em>CRC Press;; 189 pages; $69.95.</em></p><p dir="ltr" style="text-align:left;">Author Arthur Arway brings the reader into the world of supply chain security by looking at the why, the what, and the how in Supply Chain Security: A Comprehensive Approach. He also demonstrates how important it is to instill a culture of security in and around the supply chain, showing how a weak link in the chain can bring the rest of it crashing down.</p><p dir="ltr" style="text-align:left;">One section of the book is devoted to the regulations and resources available to a security practitioner; this is especially valuable to people who are new to the field. Additional value is brought to the text by including sample documents such as plans and budgets that can be used in a supply chain security program. Lastly, the addition of real case studies helps to dem­onstrate the lessons taught by this book.</p><p dir="ltr" style="text-align:left;">Based on my own experience at the third-largest seaport in the United States, I can confirm that the enormity and complexity of the supply chain can become overwhelming, even to a seasoned security manager. This book certainly earns a place on the bookshelf of the security professional looking to explore the world of supply chain security, as well as the practitioner just starting in the field who needs a solid reference.</p><p dir="ltr" style="text-align:left;"><em><strong>Reviewer:</strong> Bill Crews, CPP, served as the director of port security and emergency operations at the Port of Houston Authority in Texas. He is a member of the ASIS International Houston Chapter.</em></p>GP0|#cd529cb2-129a-4422-a2d3-73680b0014d8;L0|#0cd529cb2-129a-4422-a2d3-73680b0014d8|Physical Security;GTSet|#8accba12-4830-47cd-9299-2b34a4344465 Chain Strategies<p>​Take almost any product you have purchased in a store or used at home or work in the last week. Chances are, that object moved thousands of miles from where it was originally manufactured to the place where it was ultimately purchased or delivered to you. Organizations have intricate supply chain networks that are constantly moving every day around the world, and having an efficient supply chain security program ensures that movement of goods is not interrupted or compromised. </p><p>Security professionals must take a detailed look at the vendors who supply their assets and understand how those goods will be handled and ultimately implemented into their company’s operations or services. Following is a look at how a children’s hospital in Alabama applied supply chain security best practices to weather an unexpected storm, as well as provide for day-to-day operations. In addition, supply chain experts discuss lessons learned from their own experience of conducting risk assessments, following standards, and vetting suppliers and transporters to better protect company property. ​</p><h4>Alabama Children’s </h4><p>When a snowstorm hit Birmingham, Alabama, on January 28, 2014, the city was caught unawares. The snowfall, which quickly turned to ice, left thousands stranded on highways or in their offices. Children were stuck at school, their parents unable to pick them up. The event became known as “Snowpocalypse,” and news service called it “the winter storm that brought Birmingham to its knees.” </p><p>Hospitals were affected by the storm as well, including Children’s of Alabama. The pediatric center encountered vulnerabilities in its supply chain during that event it hadn’t previously considered, says Dennis Blass, CPP, PSP, director of safety and security at the hospital. </p><p><strong>Lessons learned. </strong>Every year the hospital conducts a hazards vulnerability assessment for its supply chain to find out where it can improve safety and security. “Once you identify your hazards and your vulnerabilities–the things that are dangerous to you or the things that you’re weak in–then you start peeling those back,” he says. “If we identify hazards that we need to correct, then we probably are going to create a management plan to correct those issues.” </p><p>Many displaced people in the community turned to the hospital for shelter when they had nowhere else to go. “We have a very prominent position in the Birmingham skyline, so if things look bad, the hospital looks like a place to go and get help–as it is,” Blass says. There were also clinic patients who had come to the hospital that morning for a routine checkup, planning to leave; many of them were stuck because of the snowstorm, which began around 10:30 a.m. local time.</p><p>Instead of being filled to the normal capacity of 300 people—the number of beds in the hospital—there were roughly  about 600 people who spent about 48 hours at the facility to ride out the storm.</p><p>The number of people at the hospital exposed one unforeseen vulnerability—obtaining clean linens from its supplier, which is separated from the hospital by a chain of mountains. “The supplier can wash the linens, but they can’t deliver them to us…we ended up making it, but that was a close call,” says Blass.</p><p>“We could handle supplies for patients, but we had a lot of people who just came to the hospital because it was a warm place to be,” according to Blass. “That had impacts on the amount of food that got consumed, and it had impacts on the amount of linens we went through. Just things that people need, supplies like toilet paper, things you don’t think a lot of.” </p><p>For those who weren’t patients, the hospital served smaller meals than normal; “sandwiches and soup, as opposed to meat and potatoes,” Blass says, to stretch resources. </p><p>The main drug supplier for the hospital is located in the same region, so obtaining critical medicine was not a concern during the storm. The hospital also has plenty of diesel fuel tanks, and can go for days without restocking. Only the insufficient linens, which must be sent off to a facility for proper sanitation before being returned to the hospital, turned out to be an issue.</p><p>“We did an after-action report on that experience, so we…put it in our emergency management plans for the future,” he notes.</p><p>The hospital’s emergency plans help ease any supply chain shortages. The institution follows the hospital incident command system (HICS) which assigns temporary duties to leadership during an emergency. For example, during the snowstorm, the chief operating officer of the hospital assumes the role of incident commander; an information officer is assigned to keep the community informed of hospital activities; and the plan also incorporates a medical officer, logistics chief, and planning chief. </p><p>During the incident, this system helped ensure proper patient care and as few gaps in the supply chain as possible. “Food was getting tight,” Blass says, and the food warehouses are not located near the hospital. “Because of the command structure, leadership can say, ‘okay you have a company credit card, we’ll contact the bank and raise your limit from $500 to $5,000 or whatever you need.’”</p><p>The U.S. Joint Commission, which certifies and accredits healthcare bodies, requires that hospitals have a group with representatives from various divisions that evaluates the standard of care they are providing to patients. Alabama Children’s has an environment of care committee that meets once a month to complete this requirement. “Our environment of care committee looks at things like safety, security, and resource management,” says Blass. “We have to meet the Joint Commission’s standard, and it surveys us every three years.” </p><p>Representatives on the team at Alabama Children’s include staff from the pharmacy, medical team, facilities, human resources, dining services, and more. This team ensures that there aren’t any gaps in the supply chain that would interrupt the hospital’s daily operations. As a rule, Blass says that having enough supplies for 96 hours will allow the facility to continue operating smoothly and efficiently. This includes a variety of items that the environment of care team must carefully think through and document. “You’re talking about water, fuel, basic sanitary supplies, and then you start talking about medicine and those things necessary for a hospital to run,” he says. </p><p>And there can be more than one type of each supply, a detail that, if overlooked, could mean life or death. “We have pumps that pump air, we have pumps that pump blood, we have pumps that pump saline, we have pumps that do many different things. You have to have all the things needed to make those supplies work for 96 hours,” he notes. </p><p>Keeping track of inventory is critical to determine whether the hospital has a sufficient supply of each item. Blass says that the hospital is moving toward a perpetual inventory system, where a new item is ordered as soon as one is pulled off the shelf. </p><p>There is a downside to stocking too many items, which is why it’s a delicate balance between having 96 hours’ worth of supplies and more than enough. “Space is expensive. And if you want to have enough water for four days, how much water is that? Where do you put it? How do you keep it fresh?” He adds that the hospital must be thoughtful in its policies and procedures on maintaining its inventory to avoid any issues.  </p><p>Thankfully, Blass notes, t​he 2014 snowstorm only lasted 48 hours. “The size of the surge exceeded our plan, but the length of the surge was shorter than our plans, so it all worked out,” he says. </p><p>And not every element of securing the supply chain is tangible; the information and communication pieces are also critical. “Every day we’re getting blood supplies in, and other kinds of materials that must be treated very carefully,” he says. Special instructions need to be followed in many cases. For example, there may be medicine that must be stored at a precise temperature until 30 minutes before it’s dispensed. That information must be communicated from the pharmacist to the supplier, and sometimes to security, who can give special access to the supplier when it delivers the drugs. </p><p>Blass is a member of the ASIS International Supply Chain and Transportation Security Council. He helped develop an American National Standards Institute (ANSI)/ASIS standard for supply chain security, Supply Chain Risk Management: A Compilation of Best Practices Standard (SCRM), which was released in July 2014. The standard provides supply chain security guidelines for companies, and has illustrations of what exemplary supply chain models look like.</p><p><strong>Best practices.</strong> Marc Siegel, former chair of the ASIS Global Standards Initiative, also participated in the creation of the ANSI/ASIS standard, which provides explanations of how to look at managing risk in the supply chain. “It’s based on the experiences of companies that have very sophisticated supply chain operations,” he tells Security Management. “The companies that put it together were really looking at having a document that they could give to their suppliers, to help them look at themselves and think of things that they should be doing and preparing for.” </p><p>Siegel is now director of security and resilience projects for the homeland security graduate program at San Diego State University. He promotes supply chain mapping, which takes a risk management–based approach to supply chain security. “Traditionally, a lot of security people have looked at supply chain as logistics security,” he says, “whereas companies with major supply chain considerations have been moving more into an enterprise risk management perspective.” These organizations take an across-the-board look at risks that could create a disruption in the supply chain, asking themselves what the specific things are that could interrupt or prevent them from manufacturing or delivering their product. </p><p>Siegel says there is a disproportionate focus on bad actors and intentional acts as threats to the supply chain, when more often it’s a natural disaster or accident that causes the most significant disruptions. “The broader risk management perspective is also looking at, ‘Is there a potential for a storm, is there a potential for political disorder, or instability in a region, that can cause a delay in processing?’” Only then, he says, are companies efficiently mapping out all the factors that could introduce uncertainty.</p><p>Maintaining a broader perspective will keep organizations from fixating on two of the most common hangups in supply chain security. “You have people who fixate on ‘everything is a threat,’ and you have people who fixate on ‘everything is a vulnerability,’ and if you only fixate on those two things you’re going to miss a lot of stuff,” Siegel says.</p><p>Blass agrees. “When we start that annual hazards vulnerability assessment, I’m going to look through the standard and notes I’ve written myself to make sure I’ve got everything covered,” he notes. “You can never rest and say, ‘well, we’re safe and secure and we don’t have to do anything else,’ because the threats keep changing.”   ​</p><p>--</p><h4>Sidebar: assess risk<br></h4><p> </p><div>​For the co​rporation that produces the F-35 fighter jet and other advanced technologies for the U.S. government, supply chain security is of utmost importance. “The threats that we face are universal in nature due to the size and the complexity of our supply chain,” says Vicki Nichols, supply chain security lead for Lockheed Martin’s Aeronautics business. </div><div><br> </div><div>Lockheed Martin Aeronautics assesses the supply chain in a number of categories, but Nichols works most closely with cargo security. “The threats there are cargo disruption, unmanifested cargo, and anti-Western terrorism,” she notes. </div><div><br> </div><div>The division conducts a risk assessment of its international suppliers. “We look at what type of products they provide us and how vulnerable that product is to manipulation or intellectual property theft, and we look at country risk,” she says.  </div><div><br> </div><div>The company sends a questionnaire to its suppliers, and comes up with an overall score for each of them based on 10 criteria, including country risk and transportation mode. In many cases, it also sends field personnel to evaluate the supplier’s facility. “If we know we have eyes and ears going in and out of the facility, and those people are trained to recognize red flags, then we know we have a lower threat because of our presence,” she says. </div><div><br> </div><div>After one such site check at a facility in Italy, Lockheed Martin Aeronautics determined that the use of technology was warranted to further enhance security. “The concern was that the area was known for introduction of unmanifested cargo—weapons, cargo disruption,” she notes. “We began to look at tamper-evident technologies, and track-and-trace devices that would allow us to know if someone had opened or tampered with the freight.”  </div><div><br> </div><div>Lockheed Martin has a corporate supply chain security council that meets at least once a month to provide updates and discuss any issues that arise. Representatives from the company include human resources, personnel security, physical security, and counterintelligence. Stakeholders from major partner organizations are also invited to participate.</div><div><br> </div><div>Lockheed Martin Aeronautics also works closely with law enforcement and federal intelligence sources who disseminate relevant information to the company. “We subscribe to some intelligence data that is cargo-specific, so we issue a spotlight report about three times a week just to keep people engaged and aware of the threats in the supply chain,” she notes. </div><div><br> </div><div>Supplier engagement is also critical, Nichols says, so the company stays in touch with about 120 suppliers internationally. </div><div><br> </div><div>Sometime in 2017, Lockheed Martin Aeronautics plans to purchase a software management tool that will release supplier questionnaires in the native language for countries it does business with. It will tap existing resources such as “Supplier Wire” to offer training to the supply base. “This will be another evolution on how we can engage, rather than just sending them to a website,” Nichols says. “I think it’s important for our supply base to see how seriously we take security, so they will take it seriously as well.”​</div><div><br> </div><h4>sidebar: consult standards<br></h4><p> </p><p>​Laura Hains, CPP, operations manager, supply chain security and consulting at Pinkerton, member of the ASIS International Supply Chain and​ Transportation Security Council, says that companies should research whether their partners and suppliers are following major supply chain security protocols, like those put out by ASIS, and others such as the Transported Asset Protection Association (TAPA) standards for trucking companies. “TAPA is one of the big authorities on trucking, so if a company says they are TAPA certified, that to me says that they follow protocol,” she says. </p><p>Other standards include the National Strategy for Global Supply Chain Security which U.S. President Barack Obama signed in 2012 and was designed to enhance public-private partnerships. Arthur Arway, CPP, author of Supply Chain Security: A Comprehensive Approach, says the framework seeks to combine input from government and industry on protecting the transport of goods to and from the United States. “I think the government is far more willing to seek out subject matter experts and all the different modes and companies that may transport goods into the United States for their help,” he says. Arway adds the document is relatively recent, and that it could take a while before it is widely adopted. </p><p>Though terrorism is an uncommon threat to the supply chain, it must always be a consideration. Hains gives the example of vehicular attacks. In Nice, France, on July 14, 2016, Tunisia native Mohamed Lahouaiej Bouhlel drove a 19-ton cargo truck into a crowd of Bastille Day festival-goers. That attack killed 86 people and injured more than 400. New York police also warned of possible vehicular terrorism against the 2016 Macy’s Thanksgiving Day Parade. “A small company truck—that could be a target,” notes Hains. “So everybody has to think about terrorism because it’s out there.”</p><p>Another standard at the national level seeking to combat terrorism within the supply chain is the U.S. Customs Trade Partnership Against Terrorism (C-TPAT). The program is voluntary for private industry, but Arway says the national standards as a whole are seeing global adoption.​</p><p>“Standards have come a long way in how they’ve been able to incorporate security into the movement of goods,” he notes. “Many countries have accepted these programs into their own supply chain security programs.”​</p>GP0|#cd529cb2-129a-4422-a2d3-73680b0014d8;L0|#0cd529cb2-129a-4422-a2d3-73680b0014d8|Physical Security;GTSet|#8accba12-4830-47cd-9299-2b34a4344465 Tracking Trends<div class="body"> <p>You’ve probably misplaced your keys at one time or another. You may even have misplaced your car in a parking lot temporarily. On a personal level, that’s just inconvenient, but for businesses, it can be costly. Management needs a way to keep tabs on assets, whether they’re precious assets, like newborn babies in a hospital, or just very important, like computers in an office building or retail goods in a warehouse, in transit, or on the shelves.</p> <p>Companies have been grappling with this challenge for as long as they have had assets, but today they have many more options thanks to technology. In fact, helping companies track assets is a multibillion dollar industry, the capabilities of which are continuously evolving.</p> <p> <strong>Bar Codes </strong></p><p><strong>Bar codes are among the more traditional and cost-effective solutions. They have been around for decades, but they have evolved over the years and are now more sophisticated. There are several different types of bar codes to choose from, says Kelly Harris, director of program management at Barcoding Inc. There are tamper-evident bar code labels that can show when someone has attempted to alter them. For example, Harris says that some look like chipped paint and crumble when a person tries to remove them. There are others that leave behind a checkerboard print when removed. With these systems, someone must scan a bar code label to get the tracking data.</strong></p> <p> </p> <p>There are companies that are concerned about tracking traditional fixed assets, such as computer equipment, says Harris. And there are rental scenarios, “where you’re going to have an inventory of assets that you’re going to loan to a client, bill them for the rental, and then bring that back into inventory. And being able to know where all those are and how long they’ve been there is vital to that rental business,” says Harris. </p> <p>Harris says that while companies have automated the tracking of fixed assets for years, she’s seeing it branch out even more to places [it had slower adoption], such as those rental businesses.</p> <p> <strong>RFID</strong> </p> <p>While bar codes have to be manually scanned, radio-frequency identification (RFID) technology uses radio-frequency electromagnetic waves to transfer the information wirelessly. There are various types of RFID.</p> <p>One type is passive RFID tags, which are not battery powered, so they must be within 20 feet of a reader. But because they are not externally powered, these tend to be relatively inexpensive tags.</p> <p>“Passive RFID are tags that require an external stimulus in order to be read. So it’s a chip with an antenna. And when you apply a radio signal to that label, you get what they call the backscatter, or a reflection, off that signal, and then you read that reflection and that’s how the passive RFID is read,” says Zahir Abji, president and CEO of Guard RFID Solutions. It’s inexpensive, he adds, running from several cents to several dollars for a tag or label. You’ll often see passive RFID tags on retail items.</p><p>Active RFID can be four to five times as expensive as passive RFID, says Richard Jenkins, vice president of marketing and strategic partnerships at RF Code, which specializes in active RFID. But despite the cost, he notes that several large companies, such as Bank of America and Thomson Reuters, started out with passive RFID and then switched to the active technology because it suited their needs better.</p><p>For example, passive RFID doesn’t do as well in a metal-dominated environment like a data center, because the RF waves bounce off the metal. “They are either not read well or not read at all,” says Jenkins.</p><p>Active RFID tags use batteries for power and to broadcast information via radio waves to readers in real time. “So any time one of our tags is in motion, it’s traveling every 10 seconds to a network of receivers, which then broadcast the location of that particular piece of equipment to the potential head end,” says Mohsen Hekmatyar, of Elpas (a division of Tyco), another company that sells this type of product. By contrast, passive tags only tell the company where the asset was the last time the system saw it.</p><p>Companies set up their RFID systems in a variety of ways. Steve Pisciotta of Remote Tracking Systems says his company often implements its v-track RFID system in fixed sites like airports, seaports, and military bases. He explains how it works: “We set up a series of base receivers throughout a facility…. So we create a wireless infrastructure around that facility,” he says. Then when a person “with one of our tracking devices is driving and walking around, every second it’s sending out a message that says, this is the tracking ID and this is where I’m located.”</p><p>Pisciotta explains that the information then goes over the radio back to the base unit that is in the vicinity, which receives the message and sends it to one of the servers. Servers merge the data together, to be sent to a display system or a security system. “We’re just one piece of a large security system,” Pisciotta says.</p><p>The v-track system will often look like a smartphone, with a device embedded. It can include a panic button that can be depressed when in trouble and it can even detect a “man-down” scenario, Pisciotta says, and that will prompt an alert.</p><p>The active tags also work at much longer ranges than the passive tags. For example, Abji says that small tags that a hospital can put on at-risk patients, such as babies or the elderly, can be read up to 200 feet away, even through walls.</p><p><strong>Uses.</strong> Companies can use active RFID tags to achieve a range of objectives. “Let’s say I’m a nurse, and I try to use a fusion pump, and it doesn’t work,” says Hekmatyar. “I can simply trip the button on the asset tag and that button press can generate an automatic message that goes to the biomedical technician saying that this particular infusion pump, located currently in this room with number, let’s say, 232, is out of order.”</p><p>The automated workflow not only takes that particular piece of equipment out of circulation, but it also broadcasts a message to the technician to come and repair it. Most importantly, it gives the exact location of that piece of equipment at that point in time, so the technician doesn’t have to look for it, Hekmatyar says.</p><p>Abji explains another approach. “Studies have found that if you were able to track both staff members and assets in healthcare especially…you would be able to potentially save a lot of cost by increasing their efficiency and the way they use the equipment and the way they go to the different rooms and the amount of time they spend on certain locations and so on.” He adds that there is pushback from staff who don’t want to be watched by “Big Brother,” but “once you really make the user understand what the consequences of being tagged are going to be, they’re very happy and actually accept that.”</p><p>Although RFID tags can store information, many companies are careful about how much information is stored on the tag for security and privacy reasons. Hekmatyar says, his company, for example, tries to limit information to the product tag number and the location of the tag, as well as other maintenance information, such as the tag’s battery level.</p><p>“Any other pertinent data that the facility wants can be entered in user-designable fields…that information is associated with that particular tag ID number, but it’s not necessarily stored in the tag,” he explains. It’s on a secure computer. “We can secure it using passwords and log-in IDs and so on, so that it’s not being exposed, it’s not being transmitted in air,” he says.</p><p>RFID tags can have other sensors and microprocessors to report motion, or temperature, or to sense light, for example. “Quite a few different kinds of sensors can be put in there,” says Abji.</p><p> <strong>Longer-range Solutions</strong></p><p>Companies also use the Global System for Mobile Communications (GSM) cellular network tracking and satellite tracking, which enables tracking goods in transit virtually anywhere. “You can go international with those devices, as long as you have a SIM card that is valid in those regions,” says Pisciotta. He says his company has also deployed GSM trackers with panic buttons; some of the applications are for executives who are traveling and might not want to be tracked but can push a panic button and send a message back to the company’s monitor system, which will then turn on tracking.</p><p>The satellite network can theoretically be tracked anywhere the satellites reach, which is helpful in areas without cellular coverage. Pisciotta says that tags will sometimes have all three types of trackers in them—GSM, cellular, and RFID. There are also Global Positioning System (GPS) solutions. Some systems are real-time locater systems (RTLS), which add a continual tracking component to the tags. This is more costly and sometimes requires access to a network.</p><p>Pisciotta’s company pairs GPS with active RFID. The main components are the GPS and the long-range radios. As you’re moving, the GPS is always determining its location via the radios, but there’s an active RFID reader as well for tracking assets indoors. When the GPS signal is lost, the system switches over and uses the active RFID technology. It’s not as accurate as GPS, but will report generally on the asset’s vicinity, Pisciotta says.</p><p>Harris says real-time tracking makes sense in certain applications, such as in a hospital. Hospitals buy very expensive equipment that is continuously moved from patient room to patient room. “Many a time, they don’t know where all their stuff is, so then they’re putting in requisitions to buy more,” notes Harris. If they knew where all their equipment was and could locate it quickly, there would be actual return-on-investment to the bottom line, he says. Such real-time tracking systems are not as likely to pay for themselves in an office environment.</p><p><strong>Trends<br> </strong><br> The tags have gotten smaller over the years, says Hekmatyar, as battery power has evolved and batteries have become smaller. “But the biggest factor has been acceptance. A few years ago, not too many people were considering asset tracking, whereas nowadays, we’re getting constant interest in that particular area.”</p><p>Abji says that performance is another issue. His company has focused on making tags work better among metal objects. “We wanted the tags to be such that they could be placed on heavy-metal objects without degrading the performance, also have a fast transaction of the tag, between the tag and the system. We can determine theoretically, for example, a thousand tags per second,” he says, “whereas old technology would potentially miss one or two because the transaction rate is very slow. And you can imagine that you may put tags on hundreds of items that are put on a skid and go through a warehouse door, for example. So it’s very necessary for us to have those [faster] types of transaction speeds,” Abji says.</p><p>Another trend in this arena is toward standardization, much like in other areas of security. Abji says his company has been involved in the development of a standard for the Institute of Electrical and Electronics Engineers (IEEE) which was released last year. This alleviates the concerns some companies might have when investing in proprietary technology. Such systems would become useless if the manufacturer went out of business.</p><p>As a result of these improvements and other factors, such as the need for companies to comply with regulations like those stemming from Sarbanes-Oxley, RFID is being used more in places like data centers, says Jenkins. The RFID in data centers industry is expected to grow to nearly $1 billion by 2017, according to the site RFID 24-7.</p><p> In retail, by contrast, RFID has fallen short of initial expectations, but it still holds promise. Fifteen years ago, Walmart wanted all of its manufacturers to start using RFID tags to track merchandise, but even a company with that much clout couldn’t make it happen back then, notes Read Hayes, research scientist, Crime Prevention Research Team, at the University of Florida and director of the Loss Prevention Research Council (LPRC). And JCPenney is reportedly reversing its decision to try a switch to RFID that has been blamed for increased shrinkage, though the details on that are unknown at this point.</p><p> The main barrier to RFID adoption has been cost. For the system to really work, the RFID tags have to be on everything and the readers have to be everywhere—all over distribution centers, in trucks, in stores. Obviously, this is an expensive proposition.</p><p>But if such a system could be successfully and economically implemented, says Hayes, “you would actually know where all your stuff is.” The allure of that potential is strong, so all the retail chains are looking into RFID, he says.</p><p>Some are already starting to roll it out for expensive items or items at high risk of theft. Tyco ADT and Checkpoint Systems are two companies that already market such solutions. And Hayes says this will increasingly catch on in the market, but it’s hard to say whether that will be in one year, five years, or longer.</p><p>Part of the key to success is to find ways to more closely integrate tracking technology with other security technologies, like video surveillance, throughout the supply chain and in stores, says Hayes. That’s the focus of the LPRC’s RFID Center of Excellence. Hayes expects that the center will be “up and running” with some RFID innovation projects by June 2014. That will include live testing in stores or distribution centers. The center hopes to ultimately output best practices guidance to help stores implement solutions and get good return-on-investment metrics.</p><p>Asset tracking is an ever-growing field. “There’s a lot of R&D going on,” notes Hayes. And while most businesses may never get to a point where it is worth the cost for every asset to be tagged, RFID and other technologies are sure to be more pervasive in the future.</p><p> <em>Laura Spadanuta was formerly a senior associate editor at Security Management.</em></p></div>GP0|#cd529cb2-129a-4422-a2d3-73680b0014d8;L0|#0cd529cb2-129a-4422-a2d3-73680b0014d8|Physical Security;GTSet|#8accba12-4830-47cd-9299-2b34a4344465