Theft is not a new problem for warehouse operations. Its negative implications not only place you, your staff, and your expensive goods in danger, but they also expose security loopholes that endanger the reputation of your warehouse.
This article can act as your guide on how to prevent theft in your warehouse. We will be discussing the reasons for theft, the indicators that it is happening, and some practices to combat it.
Reasons for Theft in the Warehouse
Warehouse theft is a serious matter as it comes not only from external sources (such as burglars) but also from internal sources (staff), which is more common. The reasons for theft are many, but we have highlighted some of the most common factors behind both internal and external theft.
External Warehouse Theft
For external theft, here are the core factors:
The international black market.
Lack of video surveillance and anti-theft devices in the warehouse.
The involvement of insiders – making it much easier for outsiders to execute the theft.
"According to a warehouse theft statistic by Loss Prevention Magazine, cargo theft is a $15-$30 billion problem each year in the United States."
Internal Warehouse Theft
The real challenge lies in finding the reasons behind employee theft, including the following:
1. Financial Stress
This is one of the most common reasons for internal warehouse theft. Reasons such as employee’s due bills, family demands, poor money management, and dissatisfaction with the salary can lead to theft.
2. Lack of Supervision
When employees are left unsupervised, it can lead them to take advantage and commit an act of theft without being noticed.
This happens when an employee is filled with antipathy for their company and self justifies the act of theft. Antipathy can stem from a lack of respect, appreciation, reward, and opportunity.
A disorganized warehouse and lack of warehouse cleaning act as easy targets for employees to execute theft as it makes it easier for them to hide their activities.
How to Know if Theft is Happening
Awareness is the key to knowing if theft is happening or is about to happen. If you are not aware of what’s happening around your warehouse, it can suffer big losses every day. Some advice given below may prove to be a valuable wake up call for you to prevent theft.
Discovering that the stock levels of inventory are not matching the sales records.
Consistent dip in productivity during a time period or a day when specific people are working.
Insights from the whistleblowers in the workplace.
Vital records such as invoices going missing.
Even if you catch any of these indicators, it is still a daunting task to prove a staff member guilty of theft as you need to have a piece of strong evidence against him/her. Hence, it is better to implement warehouse theft prevention measures to avoid such things.
Warehouse Theft Prevention Measures
Over the years, many methods have been tested and implemented to turn a warehouse into a fortress. The practices below can help you shield your warehouse from the possibility of theft:
Implement Warehouse Technologies
Your first step to counter warehouse theft is being aware and having access to data. These warehouse technologies below can allow you to find inconsistencies in records and track labor productivity immediately.
1. Implement a WMS
A WMS can help you track your stocks in real-time and detect missing items. This increases the amount of awareness you have over your inventory, which can lead to a reduction in theft.
2. Mobile Technologies & Wearables
Mobile computers, handheld barcode scanners, or smart printers are all excellent examples of current warehouse technology. These wearable warehouse technologies, when integrated with a WMS, can help you inspect your warehouse by having access to data anywhere in the facility.
This technology can help make cycle counting fast and easy. This will remove the reliance on humans to perform cycle counting, which lowers the chance for them to manipulate the numbers. Drones can also make sure that your stock count is up to date as much as possible.
Managing Human Activity
Warehouse managers need to be proactive about all activities in the warehouse to prevent theft. To manage insiders and outsiders alike, here are some tips.
1. Review Employee Performances
Daily or weekly performance analysis will help you in reviewing the productivity level of the employees. Moreover, it will help you identify the underperforming and suspicious ones, who could be the reason behind the theft.
2. Limit Access to Inventory Data
The task for updating the inventory list or inventory management software should be restricted to only trustworthy employees so that stocks cannot be manipulated in their absence.
3. Staff Inputs
Encourage your staff to keep an eye on their fellow staff members, which will keep them honest. Also, you can acknowledge the employees for their contributions in stopping such theft attempts.
4. Caution in Hiring
During hirings, you can conduct a rigorous background check on applicants’ criminal records and work ethics in their previous workplace.
5. Rotation Policy
Theft can be executed when devious staff members develop alliances. Rotating shifts and areas can help prevent this.
6. Security Checks
Security personnel should be posted at all entry/exit points and adjoining areas within a warehouse with the assistance of tools such as security scanners. Moreover, all inbound and outbound trucks should be inspected and not allowed to move without receipts/checking.
7. Awareness of Policies
Educating your staff about the company’s zero-tolerance policies and consequences of breaching them can result to less theft. Additionally, having them sign documents that state they have been informed of all policies can help in ensuring awareness of consequences.
Improving Warehouse Layout
A well-thought-out warehouse layout can significantly reduce the possibility for theft. Weaknesses in the warehouse design are an open invitation to the robbers to penetrate. Given below are a few practices that can help you optimize security defenses:
1. Fewer Doors
More doors can open more infiltration opportunities for thieves. If possible, try to use a single door for entry and a single door for exit to limit and control human activity.
2. CCTV Surveillance
Installing CCTV cameras ensures full-time surveillance and can discourage theft attempts. It can also provide definite proof during warehouse theft investigations.
3. Separate Receiving and Shipping Docks
Implementing this policy can reduce the chance for incoming stock to be transferred immediately to an outbound truck.
4. Restrooms Near Doors
Among outsider actors, truck drivers pose the highest risk for cargo theft. Placing restrooms near doors can restrict their access to the main premises and lessen the chance for theft.
5. Separate Parking for Visitors
A separate parking area that is located far away from operational spaces can limit the chances for outsiders to steal.
6. Outdoor Security
Thieves often steal stocks by hiding it in the bushes or waste containers outside the warehouse. Therefore, these things should not be too close to the warehouse doors, windows, and walls.
7. Well-Lit Facility
Adequate lighting at every corner is one of the key measures to prevent theft. It not only increases visibility for CCTV cameras, but it also helps employees observe things more clearly.
Warehouses have always been soft targets for theft. Following the practices mentioned in this article can help you raise your standard of security and avoid warehouse theft. They will not only put the brakes on the inefficiencies in your warehouse, but they can also save the loss of revenue and increased legal costs involved when theft occurs.
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