How to Reduce Warehouse and Manufacturing Losses
(See Sample Layouts & Camera System Samples at bottom of article)
I hope you’re sitting down for this. Theft can cost warehouses, shippers and manufacturers upwards of $115 billion every year. Billions. That’s right. Billions.
This number includes product theft, fraud (false damage claims, false shipping counts and inventory). But this can also carry indirect costs most people don’t think about such as much higher insurance premiums, personnel turnover and increased training costs for that replacement personnel, and decreased customer satisfaction due to inventory issues just to name a few issues.
Cargo theft is a huge concern for many businesses. In the US along product just in transit is another $110 billion annually. Freight yards and warehouses are the two primary theft points where 87% of losses occur. In most cases an employee is working with the thief or is the thief. Scary, right?
If you think your facility is immune then STOP RIGHT THERE and think again. So you aren’t stocking high-value consumer oriented goods? So what! Once something is stolen almost ANYTHING can be traded or resold thieves know how to sell everything. From a pair of shoes to a package of cookies. Unfortunately, it all comes down to compensation. Too many employees feel entitled to more than their paycheck, and in industry security the 10/10/80 rule seems to apply across the board.
- 10% of your employees will never steal from you – go team!
- 10% of them will steal whenever they can and whatever they can – how dare they!!
- And 80% can be motivated to steal from you – or motivated not to steal from you. Meaning if the risk is low and it’s easy for them to make it happen and get away with it then they’ll walk out the door with that case of burger patties for their cookout this weekend.
The 10% who will steal from you no matter what doesn’t matter what you do so we’re going to focus on the remaining 80% and hopefully that will alleviate the bulk of what’s happening to your business. Plus the camera system you will be putting in place will also give you the ability to prosecute the first 10% which will give you even more peace of mind.
First let’s talk about what motivates the 80% to steal from you.
- Financial factors – economic conditions could take a downswing making ends harder and harder to meet, medical bills could pile up, and poor financial skills could make pay checks that were covering bills less and less effective.
- Opportunity – removable, available and disposable items that are easily transportable encourage theft
- Self-Justified – They think they are owed more than their pay check, they need something they can’t afford, they don’t think what they’re taking will be missed.
Theft prevention is all about identifying weaknesses and limiting opportunities from as many angles as possible. Lock up valuables and smaller items and keep them under constant camera surveillance.
Now here’s a hard question…..Are you an enabler to these thefts? No one wants to think so. But what’s the real answer? Here are a few basic factors to keep in mind when it comes to security in general.
- Get all of your people involved. Put security awareness programs involved so employees participate in reducing theft.
- Access. Evaluate all access points into and out of the facility to make it harder to enter and/or to remove products unchallenged or unobserved.
- Hiring. Do your due diligence while hiring, interviewing, including background checks.
- Shipping and receiving procedures. Limit opportunities for anyone to walk out with product.
- Defend your facility. Evaluate your facility’s perimeter to reduce external opportunities.
- Cravable Inventory. Audit your facility and especially the cravable inventory to make sure it isn’t located to close to doors, locker rooms, exits, shipping boxes, break rooms, etc.
In short. Don’t make it easy for inside or outside sources to take money out of your pockets to line their own. Because it’s not just employees stealing. “When delivery drivers were surveyed 40% revealed that they had been propositioned to commit conspiracy, and often other employees who are aware of the theft are paid to ignore the activity and keep quiet.” Supply Chain Dive
Figure out what they’re going to take. Value. People aren’t going to steal a one of a kind bronze bull weighing 5 tons that’s going to take 2 cranes and a full crew of twenty men to move. But they won’t think twice stealing a box of cigarettes out of the container carrying 2000 boxes of cigarettes.
Damage is something else to look out for. What are your “policies” when it comes to damaged freight? Are they just tossed in the trash because it’s not worth reporting? Does one employee handle all of it? Does that one employee have more “damage” at the end of the month when their bills are due? Are more and more people being buddy buddy with them? Don’t make it easy.
This is your bottom line and we all want to be friends with everyone but that just isn’t how it works unfortunately so you have to keep your eyes on everything but you can’t. That’s why you need cameras in place to do it for you.
Then you just have straight forward warehouse burglary but again and again you almost always have someone on the inside working with them.
So the question is where do you put cameras? The easy answer is everywhere. You want cameras inside and outside. Doorways, main production floor, offices, breakrooms, hallways, shipping, receiving, docks, entrances and exits of the property itself and shelving in between.
And if you’re worried about your property being too big that you’ll have to pull cabling in 4000 directions, it’s not a concern anymore. Rugged CCTV has built H.265+ technology into all of their IP cameras and NVRs so they can run all of their video signals and POE 820 feet all the way back to the command center over a single piece of cat5 or cat6 cable. It’s all plug-n-play technology with the highest resolution video. It’s a simple system that can record 4, 8, 16, 32, 64, or even 128 cameras for days, weeks or even months onto internal hard drives.
Didn’t get enough awesomeness from the statistics above?? Well let us share some more….