**2. Supply chain and the transport network**

[4] defines the supply chain as, "*The network of organisations that are involved through upstream and downstream relationships in the different processes and activities that produce value in the form of products and services in the hands of the ultimate customer".* These processes can be in different companies or in the same company. The different building blocks in a supply chain can, literally, be located throughout the world and connected through the use of a transport network. The transport network is designed to use economy of scale when moving products

© 2012 Ekwall, licensee InTech. This is an open access chapter distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. © 2012 Ekwall, licensee InTech. This is a paper distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

from consignor to consignee in a supply chain, through nodes and links. This means the transport network only physically integrates the supply chain with the fulfilment of its transport demands [5]. Therefore, several different supply chains can be present at the same time and the same place in the transport network. This indicates that the relationship between supply chains and transport activities would be better described with complexity theory, especially if the interactions between components are the object of the research [3].

Supply Chain Security – Threats and Solutions 159

possibility to draw far-fetched conclusions unless more detailed data is added. A good indicator for criminal threats and common distrust in the society is level of corruption in a country [10]. The higher level of corruption, the higher is the distrust in the society and this

A good indicator of the violence present in a society is the number of homicides per 100 000 citizens (lower number means safer). The average homicides rate 2007 in EU which is 1.4 in general but increases to 1.9 in capital cities [11]. This indicates that the country sides are safer than bigger cities, and the long term trend is a lower average homicides rate, which means a safer society (relatively). Other good indicators of criminal threats are the reported total number of crimes as well as the reported number of thefts and robberies. Risk rating (both relative and absolute) are good indicators on more transport related crimes. It is important to remember that each country may (are likely to) have different definition of

The general criminal trend in EU is that crime is declining from the pike around 1995. According to [11] have their being an increase in reported crimes types violent crime (up 3%), drug trafficking and robbery (both up 1%) in the period 1998-2007. During the same period has seen a decrease in motor vehicle crimes (down 7%) and domestic burglary (down 3%). There seems to be a time difference between countries in the trend but nevertheless the declining in reported crimes and even criminal patterns are surprisingly similar between member states [12]. The reason for this decline is according [12] the "*changing demographics, among other factors, have played a causal role in the decreases in crime across the Western world. Since the bulk of common crimes are committed by young males".* There is also a suggestion that the better policing and/or more severe sentencing contributes to the declining criminal trend

The term inventory shrinkage is the loss of products between the point of manufacturing or purchase from supplier and the point of sale. According to [13], the average shrinkage rate is 1,8 percent of total annual sales. This means a total loss of \$33,21 billion annually in the U.S. The report points out four major sources of shrinkage: employee theft, shoplifting, administrative error, and vendor fraud. Therefore, three of four sources for shrinkage are criminal actions. The losses in the European fast moving consumer goods are for 26 percent in manufacturing, 8 percent in distribution, and 66 percent in retail [14]. Shrinkage during distribution/transport is approximately 0,14 percent of annual sales for all types of products. According [15] is the worldwide loss ratio as 0,025 percent of the total revenue (\$307 billion revenue and \$77 million in losses). Benchmark participant loss rates varied from 0,0038 percent to 0,25 percent of total revenue. The three different reports [13, 14, 15] indicate that the annual shrinkage during distribution/transport would be 0,025 percent to 0,14 percent of annual sales. This loss ratio is compared with the loss ratio for retailers (1,75 percent) and

may lead to a lower will to report crimes to the police. This is only a weak indicator.

crimes and guidelines for data collection [9].

**3.2. Shrinkage and theft** 

manufacturers (0,56 percent) [14].

[12]. The different official statistics supports these conclusions.

Looking at transport from a system perspective, we find that logistics is made up of different levels, infrastructure, resources and material known as the three levels of logistics [6]. A logistics system consists of links and nodes, where nodes are geographically fixed points such as factories and terminals, while the links are the elements connecting the nodes, i.e., the modes of conveyance. The flow of materials is the first level of the system, because it is the reason for the system's existence. Moving material from one place to another requires a flow of movable resources such as Lorries, trains, airplanes, and ships. These movable resources need infrastructure like roads, harbours, airports, and terminals [7, 8].

The complexity in logistics can be explained by displaying the four flows always involved in logistics activities. The flows of material and resources are mentioned already. These two flows represent the "physical" part of logistics, but the other two flows, monetary stream and flow of information, are just as necessary to make the system work [6]. The four flows of logistics need geographical fixed constructions and infrastructure to fulfil the scope of logistics. Some of the infrastructure is owned and used exclusively by one company while some is co-owned or owned by governments. The four flows of logistics and the necessary infrastructure are the five needs for logistics fulfilment [9].

The cargo thief aims to remove goods from the goods flow by attacking the movement of resources and/or the infrastructure it uses. A potential perpetrator can also utilize the information flow in order to better plan the theft of goods or commit a fraud which targets the flow of capital. This paper uses primary the three elements, flow of goods, movement of resources and infrastructure of the five needs for logistics fulfilments. The frame of reference uses the routine activity theory from criminology to explain the interaction between the transport network and potential perpetrators, where the theft opportunity is determent by each unique configuration of the five needs for logistics fulfilments and then exploited by a potential perpetrator.
