June 20, 2011
Column | fastlane

An ounce of prevention ...

There's no fail-safe method for protecting DCs against theft. But these precautions can minimize the risk.

By Clifford F. Lynch

Conventional wisdom holds that cargo is most vulnerable to theft when it's on the road, which is why so many security protocols focus on trucks and other vehicles. But lately we've seen an uptick in cargo thefts—including the disappearance of entire trailer loads—on distribution center property. In some instances, the thefts have occurred at what were thought to be secure facilities. In others, however, they took place at warehouses that hadn't even taken basic security precautions.

Securing a distribution center can be both difficult and expensive. But failure to take precautions is nothing short of reckless, particularly if the company is a logistics service provider and is responsible for the property of others. While no manager can totally eliminate the risks to a facility, its contents, and its employees, there are steps he or she can take to minimize risk.

Security begins at the property line. Ideally, a distribution center will be completely surrounded by a fence, with guard service to check all vehicles and persons entering and leaving the property. When this isn't possible, there should be adequate lighting and a network of closed-circuit television cameras that provide a clear view of the perimeter of all buildings. Cameras should be monitored 24 hours a day, seven days a week. Parking against the building should be prohibited except in the receiving and shipping areas to ensure lines of sight aren't blocked.

When there is no guard, every vehicle or person entering the property should be required to check in with a live person or at the very least, be recorded by a video monitoring system. It's important that these individuals be seen (or filmed), not just heard.

Security experts often recommend using closed-circuit cameras inside the facility as well. Beyond that, all building doors, including those to the offices, should be locked. There are any number of key card and PIN number systems that will ensure that only authorized persons enter the building. Truck drivers and other visitors should be allowed to enter only through a specific set of doors that open into a confined area. Once inside, they should be registered and then given only limited access to the facility.

Receiving or shipping doors should never be left open without an appropriate distribution center employee on hand. If the facility handles products that are unusually expensive or particularly vulnerable to theft, these items should be secured in caged areas within the building with access carefully monitored.

Securing a facility against outside intruders is relatively easy compared with protecting a facility from the enemy within. Forty percent of all warehouse thefts are committed by employees. To cut down on the risk, DCs should follow a rigorous screening process for prospective employees. A surprising number of companies do not run background checks because of the expense. Yet the cost is likely to be negligible compared with the financial consequences of a single incident of larceny.

In addition to a background check, every prospective employee should be tested for drug use. And in today's environment, integrity testing is strongly recommended as well. These tests, which are in compliance with federal and state discrimination laws, screen for honesty, attitudes toward customer service, risk of drug and alcohol use, and more.

In addition, managers should be trained to recognize unusual behaviors that might signal that something's amiss. Deterioration in attendance, work habits, and personal relationships are all warning signs and should be dealt with appropriately.

Bottom line: There is no fail-safe method for protecting property, products, and personnel. But a well-implemented and -managed security program, thoughtful and careful hiring practices, good management training, and common sense will go a long way toward minimizing risks.

About the Author

Clifford F. Lynch
Clifford F. Lynch is principal of C.F. Lynch & Associates, a provider of logistics management advisory services, and author of Logistics Outsourcing – A Management Guide and co-author of The Role of Transportation in the Supply Chain. He can be reached at cliff@cflynch.com.

More articles by Clifford F. Lynch

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