Last week, we published a story on the brazen theft of $600,000 worth of hoverboards, scooters and similar gear from a DC in Carrollton, Texas, operated by GoTrax, a distributor.
The entire heist – captured on video – took just 20 minutes and appears almost certain to have been aided by a worker at the DC, as the thieved hauled away four trailers, each with $150,000 worth of inventory in them. (See Warehouse Theft Remain Big Problem for Companies Large and Small.)
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Warehouse thefts remain a major issue. How can companies protect themselves?First, some ideas from warehouse staffing firm Prologistix, in a recent blog post. The recommendations include:
Keep an eye on physical security: Perhaps the easiest way to reduce theft is to set up more visible and physical deterrents to illegal actions, according to Wolters Kluwer. That may be as simple as putting up a fence, installing security cameras (that are actually hooked up to something and not just for show), introducing keycard locks for both internal and external doors, and so on. Simply put, if you can make security a more conspicuous part of your operations, you’ll be more likely to prevent theft before it’s even attempted.
Monitor employee behavior: While you may run your company with a total trust in your employees, it’s always a good idea to keep tabs on data and behavior to spot potential signs of theft or fraud, Wolters Kluwer advises. Does your data match up with physical inventory? If not, something is amiss. That doesn’t necessarily indicate theft in and of itself, but it could, so it’s better to monitor these issues.
Safely guard access: A great way to avoid theft is to keep people who don’t have a need to be in certain parts of your building from getting in there, according to Insperity. Again, this could involve installing keycard locks, or simply asking employees to enter a combination on a door knob before it opens, but if you can keep everyone from the general public to delivery drivers to even staffers who don’t need to be in a particular space, you’ll be better off.
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Make better hires: When you’re trying to reduce theft risk it pays to carefully vet your employees, Insperity said. This does not mean that you should rule out people with a criminal record sight unseen (as this is usually against the law), but it does mean a more careful approach to looking into applicants’ backgrounds, checking their references, etc. To state the obvious: You don’t want to inadvertently hire someone who is looking to victimize you. A more diligent hiring process can reduce that risk significantly.
Remember theft can happen virtually, too: Finally, you shouldn’t just be worried about having physical items stolen from you, according to i-Sight. In fact, the cost of a data breach (stemming from any number of threat vectors) is probably far more significant than even the most costly physical invasions of your space. As such, adopt a strong cybersecurity posture, install anti-malware and firewall protection, train employees on how to spot a potential threat with ease and so on. It’s always better to be safe than sorry on this front.
US logistics security expert Barry Brandman of Danbee Investigations has some alternative views. A few years back, Brandman presented on this topic at the annual conference of Warehouse Education and Research Council (recently acquired by MHI).
Very high percentages of distribution companies have some countermeasures such as guards, alarms and video surveillance. But these tools are ineffective, Brandman said. Guards have a limited impact, and alarms are also limited and studies have found they don’t operate correctly a high percentage of the time.
But video may in the end be the most overrated tool, Brandman said, because such systems generate hundreds of hours of video every week – and who had the time or resources to view all that? No one, Brandman says, and employees know that.
There are no easy answered, Brandman said. A detailed security audit is a good place to start, and these need to involve more than the simple checklists that are often used. The audits should include a true analysis of processes, Brandman said.
Companies should also employ unannounced audits, Brandman said, and the results should be included in the performance reviews of DC managers.
Brandman said it is critical to have some kind of hotline where employees can privately and anonymously report illegal activity. That anonymity is key to getting many employees to call about the theft. There are third-party service companies that can maintain such hot lines for a company, Brandman said, and having the service managed by an outside company might be viewed as less risky to employees, increasing the number of tips.
A company should position such hot lines and other communication activities as promoting a “safe and secure” workplace, Brandman noted.
Human surveillance, including embedding fake employees into a DC, can also be effective if a distributor suspects theft activity is on-going, Brandman added. But if a company takes that step, the number of managers “in the know” about the surveillance should be kept as small as possible to limit intentional and especially unintentional leaks of the program. But Brandman cautioned that such covert surveillance programs usually don’t produce results overnight
“You need to have some patience,” Brandman said.
Brandman concluded by noting that some companies seem to think DC theft is only an issue for high value items such as electronics and pharmaceuticals. But they are wrong.
“There is a market for everything,” Brandman said, noting a case where low value industrial supplies were being systematically stolen.
Ecommerce sites have made it incredibly easy to sell merchandise of all types stolen from warehouse, Brandman noted.
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