FALL 2003
How ISyE is Addressing There are a variety of ways that ISyE, through its research and teaching, can help the nation address the security challenges that emerged on September 11, 2001. A key challenge that this article will focus on is ensuring that the national and international transportation systems are secure, for both passengers and freight, and that the U.S. economy, which is inextricably linked to these transportation systems, remains strong.
Exploiting the U.S. transportation system, the terrorist events of September 11, 2001, caused the deaths of more than 3,000 individuals and roughly $100 billion in direct and indirect economic losses, and pushed the nation into a war. It is well recognized that the attacks of September 11, 2001, were in large part attacks on symbols of U.S. economic strength and hence on the U.S. economy. Indeed, economic disruption as a result of terrorism is a major concern for many of those who have addressed these horrific events, their impacts, and how they can be avoided in the future.
According to Fortune (2002), the impact on U.S. supply chains due to higher shipping costs, increased inventories, border closures, increased travel times, and other changes as a direct result of the September 11, 2001, terrorist attacks is estimated to be $150 billion per year. In terms of potential future terrorist attacks, O'Hanlon, et al. (2002; p.7, Table 1-2) provide a table that lists the nature of economic disruption and the potential cost of each of several different types of possible terrorist attacks. At the top of this list is "weapons of mass destruction shipped via containers (or the mail)" with a potential cost of up to $1 trillion.
In response to September 11, 2001, a variety of different U.S. policies and regulations has been put in place to help secure the vehicles, cargo, individuals (e.g., truck drivers), and physical infrastructure of global supply chains, e.g., Container Security Initiative (CSI), Customs-Trade Partnership Against Terrorism (C-TPAT), Secured Trade in the APEC Region (STAR), and Trade Act 2002: Rules on Inbound Air Cargo to the U.S.A (descriptions of these terms can be found at www.isye.gatech.edu/setra). In particular, the CSI places U.S. Customs officials at the 20 largest non-U.S. "mega ports" (e.g., Singapore, Hong Kong, Rotterdam) to inspect sea cargo containers bound for U.S. ports.
Where do security-related issues fit in the ISyE research portfolio? What are the types of problems most amenable to solution, using ISyE core R&D; competences? There are many possibilities. One particularly natural fit, which we will discuss below, involves modeling and analyzing the impact of the new U.S. security initiatives on the productivity of the users and providers of freight transportation. This research, funded through Georgia Tech's The Logistics Institute (TLI, www.tli.gatech.edu) and the Trucking Industry Program (TIP, a member of the Sloan Industry Centers Network, www.isye.gatech.edu/tip), involves the use of mathematical modeling, logistics and supply chain management analyses, simulation, and optimization, all of which are part of the ISyE curriculum.
CSI essentially "pushes back the borders" for container inspections. It can also increase the complexity of various processes and, as a result, decrease productivity. For example, moving containers from in-bound ships to out-bound ships at a CSI-compliant trans-shipment seaport now also involves taking a percentage of U.S.-bound containers to inspection stations for (at least initially, non-invasive) security inspections. Although the inspections themselves tend to be completed quickly (within two or three minutes), they currently require draying each container to another part of the port, putting the container into a queue, x-raying (or gamma-raying) the container, and then draying the container back to its proper position for loading onto the out-bound vessel. Thus, security inspections require extra container moves, extra time, and extra infrastructure and manpower (e.g., dock space for the inspection equipment, extra drayage vehicles), which add up to more cost. Our studies show (again, see www.isye.gatech.edu/setra for further explanation and quantitative analyses) that, as the percentage of containers inspected increases:
The percentage of containers inspected does not have to get particularly high (5 percent to 10 percent) in order for these measures of productivity to be noticeably affected. These results indicate that the providers of transportation services (e.g., a seaport) may not be as affected as the users (e.g., a supply chain using the port) by these new security initiatives. Much effort in the private sector is now being placed on determining whether or not applications of new security-focused processes, combined with information technologies, will have an ancillary productivity benefit with the hope that the efficiency gains due to these new processes and information technologies will counterbalance the productivity degradations due to the added complexity inherent in the new regulations.
An example of on-going research involves understanding the productivity impact of performing freight security inspections at foreign, rather than domestic, seaports and airports. We instinctively feel that "pushing back the borders" is a security enhancing policy. Containers are checked before reaching U.S. borders, reducing the likelihood that a terrorist attack involving a weapon in a sea cargo container will occur at a U.S. port. Initial research results indicate that inspecting a container closer to the point of origin of the supply chain, and thus resolving uncertainty early, rather than inspecting the container closer to its destination can enhance productivity. Hence, non-U.S. port security inspections may benefit both the security and productivity of supply chains that originate in a foreign country and terminate in the U.S.
In summary, the list is long of interesting and highly relevant research topics associated with security that can be analyzed by the collection of problem solving disciplines taught and studied in ISyE. We have briefly discussed only a few of the many possibilities and look forward in the future to further addressing this critical national challenge. Further discussion of these and related issues can be found in the references. With the intent of leading a national discussion on supply chain security and productivity research and education, we are pleased to report that TLI and TIP will be hosting an NSF-sponsored workshop early next year on supply chain security and productivity, which will have as its deliverable a list of key research and education issues involving the impact of security on supply chain productivity. We anticipate a future article in this publication providing an overview of this workshop.
References Daalder, I. H., et al., "Protecting the American Homeland: One Year On," Brookings Institution, Washington, D. C., January 2003.
Flynn, S., "America — Still Unprepared, Still in Danger," Council on Foreign Relations, Washington, D. C., 2002.
Fortune, "The Friction Economy," 18 February 2002.
Korb, L. J., "A New National Security Strategy in an Age of Terrorists, Tyrants, and Weapons of Mass Destruction," Council on Foreign Relations, Washington, D. C., 2003.
Kunreuther, H., G. Heal, and P. R. Orszag, "Interdependent Security: Implications for Homeland Security Policy and Other Areas," Brookings Institution, Washington, D. C., October 2002.
O'Hanlon, M. E., et al., "Protecting the American Homeland: A Preliminary Analysis," Brookings Institution, Washington, D.C., 2002.
U.S. Security
Challenges
By Chelsea C. White III, ISyE Chair of Transportation and Logistics
Committee on Science and Technology for Countering Terrorism, National Research Council of the National Academies. Making the Nation Safer: The Role of Science and Technology in Countering Terrorism. The National Academy Press, Washington, D.C., 2002.
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