Safety and Security

Theft of goods in the warehouses will continue to rise unless proper theft-prevention guidelines

are developed and management vigilance is increased. There are two types of theft: mass theft, where thieves either hijack a truck or break into a warehouse, and pilferage (called “mysterious disappearance”), which may involve collusion between truck drivers and warehouse employees who load “extra” products on the truck when shipping or receiving less than the full quantity of material off an inbound shipment. They may also load the orders obtained through their fellow thieves employed as salespeople.

In particular, pilferage involving collusion among truck drivers and warehouse employees is difficult to control because a paperwork trail is seldom left, and it often involves the clandestine removal of small amounts of merchandise over a long period of time.

Reasons for frequent inventory loss at the warehouse, are

• Abundant storage of marketable and valuable products in the warehouse that are subject to potential employee theft
• The difficulty in detecting internal theft that is camouflaged as part of day-to-day operations.
• A lack of pre-employee screening due to an increased labor crunch in the warehousing industry
• A heavy reliance on physical deterrents such as security alarms, guards, and closed-circuit television equipment, which cannot protect warehousing property from internal theft

To prevent the aforementioned mass theft and pilferage, the following loss prevention measures should be taken

• Enhance loss-prevention awareness by establishing formal security rules and regulations involving employee integrity, package inspection, locker inspection, unauthorized use/consumption of company equipment or inventory, disposal of company property and trash, falsification of company paperwork and record, and periodic loss-prevention meetings.
• Conduct random tests on loadings for outbound trucks as a form of surveillance.
• Cycle count inventory periodically and carefully check inventory discrepancies as a way of controlling stock in the warehouse.
• Use RFID tags on the high-value inventory.
• Conduct undercover investigations when the following signs of inventory theft are evident:
• Unexplained inventory shortages, overages, or discrepancies
• Customer complaints of incomplete or missing shipments
• An unexplained decrease in a particular customer’s purchasing patterns
• Disappearance of invoices, receipts, or purchase orders
• Discovery of inventory cases containing goods that differ from those described on the affixed labels
• Conduct external security audits as a guard against physical, personnel, and procedural security measures.
• Conduct rigorous pre-employment screening tests, including personal interviews, reference checks, background reviews, drug/alcohol screening, and psychological tests.

Security

Security of the product can be achieved through good housekeeping, the use of security cages and carousels for storage, and through vigilance by staff. Poor security costs companies in lost inventory, higher insurance premiums and personnel turnover. Loading docks and platforms tend to be the most vulnerable areas for theft. Security systems tend to be designed to protect the facility from people breaking in – but many thefts happen from within.

Closed-circuit television (CCTV) can help stop theft. Unannounced inspections and walkabouts can also reduce wastage and theft.

At loading bays, separate them from employee parking areas, make it difficult to remove items from warehouse. Searches on entry and exit, by staff or by a random system of lights, are effective.

WMSs hold a large amount of sensitive data which can be protected by password using different access levels and firewalls for external protection. Back up files should be saved. Data from being stolen or copied from servers, computers and laptops should be protected. These items need to be locked away with key or code access, and personal computers need to be password protected and those passwords changed regularly.

The core attributes of security within a warehouse are as follows,

• appropriate recording of inbound and outbound products
• authorizations for all dispatches
• accurate audit trails
• regular stock checks
• the use of appropriate storage equipment
• vigilance