How to Prevent Employee Theft in Warehouse
Employee theft reportedly costs businesses in the US $50 billion a year, and in Canada, theft of this nature costs around $1.4 billion per annum. Though on-site retail theft is a problem, a major chunk of these losses also occur before products hit the shelves, i.e., at the warehouse.
Not only does warehouse theft result in loss of revenue, but for businesses, it also adds to their cost of operations by adding inefficiencies, such as replacing erring employees.
The best course of action is to prevent these problems from occurring. In this post, we look at a number of industry best practices for warehouse theft prevention.
Warehouse Theft Prevention Best Practices
Identify Risks & Vulnerabilities
Your first step to preventing theft in your warehouse should be to get a clear grasp of your site’s risks and vulnerabilities. In most supply chain networks, these risks range from the possibility of theft or loss during transport as well as storage.
In practical terms, you must keep tabs on the activities of both your staff and the employees of your logistics vendors. For example, you could have vendor employees involved in theft, and in some cases, these individuals may collude with your staff.
To cover your bases, you must look at your inventory spaces as well as receiving and shipping areas as potentially vulnerable areas (prone to theft).
Change Your Processes
The second step should be to adjust your processes to prevent employee theft. This starts with ensuring that you’re hiring the right people. One method to do this is to conduct criminal record and background checks of potential staff before onboarding them to your company.
Deter Collusion
There is more at play than just having the right employees. You must also prevent any instances of potential collusion between staff and/or outside actors.
One best practice is to separate your employees from outsiders. First, have the logistics drivers in a separate area from the rest of your warehouse operations. Likewise, don’t let outside visitors readily access your inventory areas.
Prevent Unauthorized Access
The last point dovetails into our second tip: preventing outsiders and non-authorized staff from gaining access to sensitive areas. In addition to guiding your visitors and outside contractors to designated areas, you should only give access to key areas on a needs-only basis.
Monitor & Track Activities
Finally, you should monitor and track the activities of your staff and outsiders. The idea behind this is two-fold: First, to deter criminal activity by keeping would-be perpetrators under watch — i.e., have them under the belief that stealing will likely result in action against them. Second, in case of an incident, have evidence you can use to audit the issue and prevent future theft.
Acquire the Right Security Systems
To implement the above process changes, you have the following options:
24/7 Surveillance & Monitoring
To monitor and track activities, you should install a 24/7 video surveillance system.
You should install cameras in the following areas:
- Your warehouse’s main entry/exits
- The inventory area(s)
- The shipping and receiving area(s)
As noted earlier, the surveillance system will act as both a deterrent to would-be criminals and a means to audit incidents after the fact. However, because your warehouse could undergo many activities in just a single day, keeping track of what’s important isn’t easy.
To counter this issue, warehouse managers can use video analytics. With video analytics, your warehouse security team can program the video surveillance system to track faces, abnormally high activity, license plate numbers, and other noteworthy events.
To audit a past problem, video analytics lets you skip through dozens (or hundreds) of hours of footage to relevant events. The system can also issue alerts to you and your time when there’s abnormal activity (e.g., the shipping area becoming busy when it normally isn’t), enabling you to respond to a potential problem before it occurs.
Access Control Systems
In terms of preventing unauthorized access, you should install pass-key/card-guarded locks on all entry points leading into your entry points. The first benefit of doing so is that it makes it more difficult for would-be criminals to even access your inventory.Second, it enables you to enable access to certain areas to only trusted/vetted employees.
Use RFID for Inventory Management
Finally, you can also track your inventory using RFID (radio frequency identification). This helps prevent inventory shrinkage from both theft and misplacement by enabling you to track items in real-time while in transit and at your warehouse.
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When it comes to preventing warehouse theft, you need an experienced security integrator and advisor to help you identify and address all of your vulnerabilities.
Logixx Security brings over 25 years of commercial security experience to the table. We help businesses prevent inventory shrinkage and theft in their supply chain networks. Call us today to get started.