You've spared no expense when it comes to security, investing in the best technology money can buy. But is your warehouse or DC really secure? Probably not. Although the latest high-tech devices can certainly prove helpful, all of these technologies have weaknesses that can be exploited by dishonest employees and professional crime rings. Here are some examples:
- CCTV (closed-circuit television): While some overzealous salespeople would like you to believe that installing security cameras will eliminate worries about theft, this simply isn't true. In fact, more than 90 percent of the companies that come to us to investigate significant theft-related loss already have extensive video systems in place.
Why doesn't CCTV prevent—or expose—insider theft? For one thing, fraud and collusion in a distribution environment look exactly like standard operating procedure. There are no bells or whistles that go off when employees steal product through what appear to be the normal shipping, receiving, customer pickup, transfer, or returns processes—and these are the areas where large-scale theft typically occurs in the distribution center.
For another, few executives have the time, patience, or inclination to watch live or archived activity. Unfortunately, dishonest workers are well aware of this. In this respect, a video system is no different from a piece of exercise equipment. It's not enough to buy it; you have to use it regularly to get results. - RFID (radio-frequency identification technology): When it comes to security applications, RFID has a couple of drawbacks. First, there are the ongoing technical issues—nearly half the respondents to a 2009 DC VELOCITY survey reported problems like signal disruptions, integration issues, and unit failure.
But aside from the technical glitches, it's important to keep in mind that RFID was designed as an operational tracking tool and was never intended to protect against internal theft. Dishonest workers can defeat RFID tags and readers a number of ways, at which point the tracking capability is completely neutralized. - Bar codes: Like RFID tags, bar codes provide many operational benefits. However, they will not prevent internal theft—there are just too many ways to get around them.
For example, if a dishonest selector or loader wants to place four extra cases onto the truck of a driver he's colluding with, he simply won't scan the extra boxes. It's that easy.
Similarly, an unscrupulous receiver can easily override the DC's check-in system to conceal the fact that a dishonest driver is keeping some of the cases he was supposed to deliver. All the receiver has to do is scan the same cases multiple times (many manufacturers don't have individualized bar codes for the same SKUs) and no one's the wiser. - GPS (global positioning systems): Many companies invested in GPS technology when it first hit the market in hopes that it would put a stop to truck theft. But it hasn't worked out that way. Although GPS has been effective at exposing drivers who extend their breaks (time theft), it has done little to deter dishonest drivers from making some cash on the side by selling stolen goods off their trucks.
In order to avoid detection via GPS tracking, these crooked drivers simply arrange to meet up with accomplices to offload stolen goods during their authorized break periods at diners or rest areas, rather than going off route. In other cases, drivers stay under the radar by selling the hot goods somewhere close to their authorized delivery locations, claiming they were waiting for an available door if they're questioned (which oftentimes they're not).
While it's clear that none of these technologies alone can stop internal theft, that's not to say they don't have a role to play in security. In fact, they can add significant value to a loss-prevention program. The trick is to select the right technology for the job and integrate it with the best security practices.
