Theft Prevention Tips

With the large value of inventory on hand, your warehouse is a prime target for thieves. If you’re looking to reduce theft in your warehouse, then you can try some of these simple warehouse theft prevention tips.

Inventory shrinkage is a costly reality for most warehouses. Sadly, one of the most common causes of inventory loss is warehouse theft (which is often an inside job). The tricky part is identifying whether missing stock is due to theft or simply misplaced or mis-picked inventory.

Why do employees steal?

They’re struggling to make ends meet.

Very often when an employee is struggling financially, they may be tempted to steal from their employer – either taking items home for their family or to sell for cash. Their justification is that they need the item/s more than you do, thinking the company won’t miss or can easily afford to replace missing stock.

An “you owe me” attitude.

Some staff may believe that the company they work for owes them something. They don’t see pilfering stock as theft – it’s simply taking what was rightfully theirs to begin with.

Opportunists

Opportunists. These thieves will take something desirable just because they can. Small stock items like make up, clothing, food stuff, and electronics are most at risk of opportunistic theft, as the thieves will take items that are easy to access and conceal.

The best way to identify theft in your warehouse is to conduct regular cycle counts or stock takes. The more accurate your inventory data, the faster you’ll pick up on theft. Without regular stock takes, you may not even notice that inventory levels are shrinking suspiciously until months down the line – by which time you’ll be haemorrhaging cash.

Look out for the following red flags that could indicate warehouse theft:

Your stock levels don’t match your sales records

Staff rumours suggest theft is taking place

Certain team members avoid taking their annual leave

Stock is constantly found near exits or loading bays

It is very difficult to prove that someone is guilty of warehouse theft without catching the person red-handed. It’s much easier to put security measures in place which help you avoid theft altogether.

If you notice any discrepancies, look into them immediately. The longer you leave it, the harder it will be to ascertain whether the missing stock items are lost or stolen.

Take a look at your shift register to see who was on duty when the stock went missing. If you begin to notice a pattern between missing stock and certain staff members on duty, monitor their activity in the warehouse. If you notice any suspicious behaviour (such as consistently clocking in or out at odd times) then you may need to investigate further.

CONDUCT BACKGROUND CHECKS BEFORE HIRING NEW WAREHOUSE STAFF

Doing a basic background check on criminal records will drastically decrease your chances of warehouse theft. Says Gulf Business, “Numerous subsets of screening services may be included in an employment background check. Which ones you choose will depend on a whole host of variables, including the nature of your industry, nature of your business, what kind of role you’re hiring for, where in the corporate hierarchy that role falls, and your organisation’s level of risk tolerance. Beyond that, you should be mindful of the laws and regulations affecting your organisation.” They add, “The bottom line is that when they’re done properly, background checks can help ensure the integrity, fairness, and consistency of the hiring process. That’s good for those doing the hiring, of course, but it also benefits honest candidates who are playing by the rules and giving employers an accurate picture of themselves and their qualifications.”

Check the criminal history of potential employees as well as checking with previous employers to find out how long the person worked there and why they left. Trust your gut – if you’re not sure about someone’s credibility, don’t hire them.

EDUCATE EMPLOYEES ABOUT COMPANY POLICY ON THEFT

Make sure all your staff are aware that you have a zero-tolerance policy when it comes to theft or fraud. Have them sign a code of conduct that clearly outlines how violations will be punished.

Additionally, you can identify anonymous channels for staff to report any suspicious activity. If everyone knows that their colleagues are keeping an eye out, it will deter thieves due to a higher chance of being caught. 

LIMIT ACCESS TO STOCK IN YOUR WAREHOUSE

Use the physical layout of your warehouse to create barriers that help to prevent theft. Separate your receiving and shipping docks where possible, to prevent newly received stock exiting on an outbound truck before it even enters your warehouse. Keep your pick faces and inventory storage locations as far away from your shipping and receiving areas as possible. The only stock that should be near these areas are incoming and outgoing orders.

Provide visiting truck drivers with a dedicated lounge area to wait while orders are being loaded or unloaded. Only staff should have access to your warehouse or distribution area.

ENSURE YOU HAVE ROBUST SECURITY SYSTEMS IN YOUR WAREHOUSE

Installing security systems like access control and CCTV cameras not only deter criminals but also provide evidence if the theft is caught on camera. These cameras should be strategically placed in high-risk areas. You can also install security mirrors to maximise visibility and prevent blind spots in hard to reach corners of your warehouse.

Additional security measures like unplanned warehouse walkthroughs by supervisors, team leaders or management can act as an additional deterrent. Make sure these walkthroughs are completely unpredictable. Some key areas to check include shipping and receiving bays, and entrances and exits. Security personnel should be stationed at every entrance/exit to the building. Be sure to inspect any vehicles leaving your warehouse to check for any unauthorised stock leaving the premises.

Staff and visitors’ parking should be located separately from your warehouse operations. No private vehicles should be near your warehouse.

How a warehouse management system helps to prevent warehouse theft

The less accurate your inventory records, the faster your warehouse becomes an easy target.

Knowing exactly what stock you have on hand (and where that stock is located in your warehouse) helps you identify missing stock immediately and ultimately reduces warehouse theft. However, trying to keep track of stock manually often leads to errors – especially if you’re doing infrequent stocktakes.

This one of the key benefits and why you need a WMS.

GETTING FLEXIBLE IN YOUR WAREHOUSE: STOCKTAKES VS. CYCLE COUNTING

Your WMS allows you to be more flexible in your warehouse, moving from traditional stocktake methods to cycle counting.

Cycle counting ensures that your inventory is frequently checked for accuracy – without interrupting your operations. You simply count small subsets of inventory in various locations in your warehouse, on an immediate, daily or weekly basis. Not only is this a more productive and efficient method of inventory control, it’s easier to spot theft because you can spot discrepancies sooner rather than later.

There’s no single solution for warehouse theft. It takes a combination of strong processes, security systems, warehouse management software and excellent hiring criteria to reduce theft in your business. We advise taking precautionary measures to raise awareness, identify weak points and limit opportunity.

SC Junction

Warehouse Ergonomics and Health and Safety

In a warehouse, objects are often placed at towering heights that are hard to reach without using some type of equipment, such as a forklift or a man-aboard order picker. Workers are often in danger of being hit by objects falling from heights or by reaching and bending into shelving to get to a product. Improper handling of boxes, pallets, cartons and items can cause strain and injury to different parts of the body, especially the back.

Warehouse hazards, though, create more accidents because of the massive quantities of products of all different sizes, shapes and weights stored on shelves, floors and anyplace else someone can find a place to put a box, pallet or carton.

The top injury categories at a warehouse are:

Slips, trips, and falls

Each year, more than eight million Americans will be treated in emergency rooms due to an accidental fall. If items are stored haphazardly within the distribution centre, such as sticking out too far from a shelf, or placed in the middle of an aisle, workers can easily injure themselves by tripping over or running into these items. Making sure floors are dry and slip-resistant can prevent slips, trips and falls.

There is additional risk when stepping into a rack to pick an item while picking on a man aboard order picker. Warehouses that use manual picking have to put a person up to those towering heights to retrieve picks that aren’t full pallets (which they would use a forklift for). Not only does that expose a picker to the over-exertions of bending and reaching into racks, they have to do it 20 feet off the ground. This is a recipe for disaster.

Ergonomic-related pains

Lifting and handling materials — Improper handling of boxes, pallets, cartons and items can cause strain and injury to different parts of the body, especially the back. Heavy, big objects should be placed in the “golden zone,” where workers do not have to bend, reach or lift above their shoulders or below their waists.

Overexertion injuries — These occur when workers lift items that are big and heavy for a long period of time, resulting in excessive physical effort. Injuries can occur to joints and ligaments. Also, in the warehouse workers walk to pick orders. The trip length between picks can be quite long, especially if the warehouse is not organized properly. Properly planned pick paths, SKU rationalization and appropriate slotting of SKUs can help to cut down the length the worker must travel to fill orders.

Material handling incidents

Falling objects — Items not stored properly can fall and injure someone. If the storage racks do not have end-caps, items can just slide right out onto the floor causing injury.

Forklifts — Most accidents occur in a warehouse at/with the docks, forklifts, conveyors, storage units and manual lifting/handling. Forklifts can overturn or they can be overloaded, subjecting materials to falling off. Accidents between forklifts or between a forklift and another surface can cause serious injury. Operators need to check hydraulic levels, tire pressure, engines, controls, steering and brakes each day to make sure all are working properly. Forklift work platforms can minimize risks for those doing overhead tasks.

Ergonomics and productivity

Ergonomics is important in the warehouse for safety as well as productivity, but productivity does not necessarily mean harder work. It often means less touches and interactions – and to handle items correctly to reduce the risk of injury. Workstations should be organized with tools, parts and components close by in a neat orderly environment.

Ergonomics means designing the job to fit the worker to help reduce muscle fatigue and potential injury. Working in the golden zone, which is the area nearest to the core of the body between the shoulders and knees, is the target area for ergonomics. Operating in this zone, items should be presented to workers in such a way that they rarely need to lift their arms above their shoulders or reach below their waists.

Reducing injuries increases productivity, which is important in today’s consumer-driven marketplace that demands distribution facilities operate as efficiently as possible.

Ergonomic equipment

A good ergonomics program can decrease risk of injury, reduce travel time for workers, and optimize space — driving significant improvements to the bottom line and a more efficient operation overall. Let’s look at ergonomic equipment that can be used to reduce injuries in the warehouse.

It is very common for workers to injure themselves by reaching deep into a pallet rack in order to pick a case. If a case is stored on a pallet on the floor, they have to bend and reach, limiting their ability to properly lift the case and increasing their odds for injury. If the case is stored deep within the pallet rack, visibility and reach is compromised and further jeopardizes the worker’s safety when picking a case. Using pallet flow racks can ensure that the case is at the point of pick, and that workers do not have to climb into a pallet rack to reach them.

Tilted pick trays allow workers to get a better look at cases stored higher in the pallet rack, and allows them to pick that case without blindly reaching into the rack or scaling the beams. Equipment that allows the picker to slide products to the point of pick can also help workers avoid overexertion and injury.

Building a safety culture

Train employees on each piece of equipment — how to operate it and how to stay safe when using it.

Ask your workers to report if they see unsafe conditions or activities. Tell your workers you want to make sure they get home safely to their family, which is why you have established these procedures. Show them you care about their safety, and they will care about it too.

Regularly train employees, from new hires to long-timers. Keep reminding them of safety issues.

Make sure equipment is well-maintained, work spaces are clean and warehouse aisles are clear from clutter to keep people from tripping.

Encourage employees to be aware of their surroundings at all times and stay alert. Have them wear personal protection equipment when appropriate.

The Importance of Reverse Logistics

What are reverse logistics? How do they affect your supply chain? What can you do to leverage reverse logistics and improve your bottom line?

Read more to find out how the return of goods can actually create potential profit for your company. Learn how to measure and assess your company’s reverse logistics system. Find out some of the benefits that come with a good reverse logistics workflow.

What Are Reverse Logistics?

Reverse logistics refer to monitoring the life-cycle of your products after they arrive at the end consumer. This could include how your product could potentially be reused, how it should be properly disposed of after use, and any other way where your expired product can create value.

The reverse logistics that directly impact supply chains the most are the return of products from the end consumer back to the manufacturer. For the rest of the article, we’ll explain more about this process, and ways you can use it to your advantage.

The Return of Goods Sold

Most supply chains will stop measuring the success of their goods once the product is shipped and is delivered on time. While this is can be an accurate measurement of customer satisfaction and profit, it doesn’t account for all cases.

What if your customer receives an incomplete order? What if they feel the item they ordered doesn’t match the product description? Or what if the customer just changes their mind about their purchase? In all three of these likely scenarios, the return of your product qualifies as reverse logistics.

Think about the different phases a product return goes through at your company. These could include:

The physical shipping of the returned product.

Quality testing the returned product to replicate the error or identify the flaw.

Documenting any problems with the returned item.

The disassembling, repairing, recycling, or restocking of the returned item.

Managing the reverse travel of your product back into the supply chain can help you avoid making the same mistake twice and allow you to reutilize as many components of your product as possible.

Monitoring the Flow of Reverse Logistics in Your Supply Chain

There are four key supply chain analytics that can help you understand the flow of returned products entering your supply chain. They are as follows:

1. Volume. Are the same items being returned over and over? Is this happening in large volumes? Answer yes to either of these questions and you’ve probably got a larger problem than just a few faulty units. You may need to consider a recall or an overhaul of your production process.

2. Percent of Sales. What percentage of your sales are lost to product returns? And how many of these products can be reincorporated into your supply chain via reverse logistics? According to a study by the Aberdeen Group, the average manufacturing company will spend 9% – 15% of total revenue on the returns process. What can you do to minimize these losses of revenue? How can you turn a profit on a loose?

3. Condition the Product is Returned In. Is the product failing after a specific operation? Can you determine any patterns of failure among the returned product? This is where quality assurance (QA) and error reproduction are important. You want to figure out what went wrong so you can adapt and correct the problem before it happens again.

4. Financial Value. Without monitoring and managing your reverse logistics, your company could be losing millions of dollars in potential value. Consider failed electronics that are returned to their manufacturer. According to “Recovering Lost Profits by Improving Reverse Logistics,” electronics sold in secondary-markets “represent an estimated $15 billion (sold) in the United States.” These electronic companies manage to turn product failure into new profits by utilizing reverse logistics.

The Benefits of an Efficient Reverse Logistics Systems

While many companies consider the return process to be a necessary evil that shouldn’t be noticed, companies that implement an effective reverse logistics workflow can reap several benefits.

Some of these benefits are:

Reduced costs. By planning ahead for returns and making the return order right, you can reduce related costs (administration, shipping, transportation, tech support, QA, etc.)

Faster service. This refers to the original shipping of goods and the return / reimbursement of goods. Quickly refunding or replacing goods can help restore a customer’s faith in a brand.

Customer retention. Dealing with errors is just as important as making sales. If a customer had a bad experience with your product, you have to make it right. Fulfilment blunders can create educational opportunities. Learn how to keep your customers happy and engaged with your company – even after you’ve made a mistake.

Reduced losses and unplanned profits. Recover the loss of investment in your failed product by fixing and restocking the unit, scrapping it for parts, or repurposing it in a secondary market. With a good reverse logistics program in place, you don’t have to leave money on the table. Take a product that would otherwise just cost your company money and turn it into an unforeseen asset.