I Uncovered a sophisticated Tanker Fraud – a memorable real-life experience, that helped me recoup all losses!
The Business context
- Local Refinery Shutdown
- Tanker sourcing from another refinery 2000 miles away.
- 5 tanker loads – 60000 liters received.
- SOP was followed using Dip Stick verification at unloading.
The Missing Quantity
After dip checking and unloading, calibrated underground storage tank indicated shortage in receipt. The Procurement Head had to solve the mystery of the missing liters – about 10%!
The investigation and strategy adopted
Although the local refinery resumed operations, a fresh batch of 5 tanker loads was ordered from the same outside refinery.
- Tankers monitored by Security staff after entering the factory.
- Dip check done under video coverage,
- Underground calibrated reservoir reading counter checked – same loss noted.
The Discovery
I climbed the tanker to intensify the examination.
Entire Dip Stick insertion assembly was disassembled for scrutiny.
A brilliantly engineered contraption – the dip chamber was a cylinder scientifically designed with holes at the bottom to allow entry of the fluid for the main tanker chamber, and just an overflow hole at the top! Even a partially filled chamber will have the liquid rising to the desired FULL level just by the weight of the dipstick!
ACTIONS
- Exemplary penal actions taken.
- Tanker Operator blacklisted.
- Resultant High Visibility to Management’s Governance created a Great Compliance ambience.
- All cumulative monetary losses recovered.
LESSONS FOR SUPPLY CHAIN LEADERS
- Verification must extend beyond documentation and SOP.
- Measurement systems can be manipulated – need for creative checks and balances.
- Hidden leakages can add to landed costs.
- Risk Management requires critical thinking.
Sometimes Supply Chain Leadership requires climbing the tanker yourself!
A REAL-LIFE SUPPLY CHAIN LEADERSHIP CASE ON HOIW OPERATIONAL VIGILANCE AND PROCESS CONTROLS HELPED UNCOVER HIDDEN LEAKAGE AND IMPROVE LANDED COST MANAGEMENT
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