Whether driven by generally heightened concerns over security in the wake of September 11, or the desire of lean organizations to squeeze every last drop of efficiency from their supply chains, leading companies are taking a closer look at how to secure distribution centers, minimizing risks large and small.

The first and foremost security issue for most warehouse operators is theft and pilferage, followed by comparatively rare, yet potentially devastating events like natural or man-made disasters, workplace violence or large-scale vandalism.

None of these occurrences is 100 percent preventable, but their likelihood can be minimized and potential damages mitigated by paying proper attention to security, from planning and equipping a facility, to staying mindful on a daily basis.

The Threat Within
Intruder and fire alarm systems, monitored by a central station, with cellular back-up in case phone lines are cut, are a first line of defense for any enterprise. But burglar alarms only warn of and protect against external threats. Experts variously estimate that from half to the overwhelming majority of all warehouse theft losses in the United States are the result of inside jobs.

Good hiring procedures, including thorough follow-up on references and criminal background checks, are the best preventive measure to combat internal theft. But no screening process is failsafe.

To catch bad apples that fall through the cracks—and minimize temptation for employees who may, when presented with too many opportunities, suffer the occasional ethical lapse—warehouse operators can employ a variety of high-tech and low-tech solutions, combined with a healthy dose of common sense.

increasing percentage of warehouses today employ video surveillance systems, both to monitor entrances and exits and keep tabs on what’s happening inside the building, around the loading dock and in the yard.

Excellent, inexpensive camera systems are widely available, notes J. Patrick Murphy, president of LPT Security Consulting, Houston, Texas, USA. Companies can choose from a variety of digital recording set-ups that make video monitoring more convenient, less expensive and more useful than ever before.

“In addition to digital video recorders that can be placed in an office, digital video signals from cameras stationed around the property can be uplinked to the Internet, or stored and accessed through a firm’s internal computer network. This means if you get an alarm call in the middle of the night, you can go to your home PC, pull up your company and view the recorded video to see if there’s actually been an entry on the premises. You can also remotely monitor your docks at night, or your employees,” Murphy points out.

Murphy suggests working with an independent security consultant who can review your operation and determine what kind and how much equipment makes sense, as well as where and how it can be most effectively deployed, before you start contacting equipment vendors.

Simply placing cameras around the building, Murphy adds, can itself be a powerful deterrent.

Other equipment to consider for increased visibility includes security mirrors, which help provide views into closed areas, around corners and into hallways. Proper lighting also helps deter thieves.

Doors of Opportunity
According to one recent study, US$10 billion a year in inventory is stolen at shipping and receiving areas in the US alone. Hectic loading and unloading operations provide the perfect cover under which employees or drivers delivering goods can slip product away.

A common tactic is for a truck driver to team up with a warehouse employee. Items get “shorted” from deliveries, loose pieces of cargo can be concealed for later removal, or product can go missing while a driver’s attention is diverted.
Limiting unauthorized persons from hanging around the dock doors can help prevent some theft.

Steven Strifler, president of Cisco-Eagle (Dallas, Texas, USA), which markets a wide range of material handling solutions including security-related equipment, suggests installing extendable dock door closures. “A lot of product can disappear when people are loading trucks, particularly in situations where there’s a lot of hand stacking going on,” he says. “It’s easy for someone to set a case beside the truck, then move it off the edge of the dock into a nearby trash can for later retrieval.” Extendable dock door closures prevent this kind of access.

Any measures that limit access to inventory, particularly expensive inventory, also help, Strifler notes. Wire partitions, security cages and folding security gates may be used, for example, to tightly control access to high value items. Netting on the back of pallet racks is another option to consider.

Automated storage and retrieval systems and other forms of automated material handling also cut back on theft by reducing direct interaction with inventory as it passes through the operation. By the same token, Strifler points out, simply using the inventory controls available in any good warehouse management system and conducting frequent cycle counts can help a great deal to minimize shrink, by providing early warning that product is missing.

In general, Strifler adds, beverage warehouses that suffer the most shrink are typically less organized, such as operations that do a lot of floor stacking. “One of the best ways these companies can reduce theft and pilferage is simply to get organized, by moving inventory into pallet racks, creating in-rack pick faces, and eliminating floor stacking, for both storage and picking,” he notes.

From Beverage World April 15, 2008