Five strategies to fight warehouse pilferage

Is pilferage a problem in your warehouse? Pilferage is an issue for many industries and particular disturbing if your own employees are doing this. Next to warehouse staff also managers could be possible culprits. Research shows that in most pilferage cases there is internal involvement, and in 90% of the cases are colleagues aware! But more importantly, what can you do about this? Below I discuss five strategies to fight pilferage in your warehouse.

Measuring is pivotal to quantify pilferage. However, if you just rely on your annual stock count, you are playing catch-up in the dark. You are just too late and making it is very difficult to isolate pilferage cases. Hence you need more frequent counting, better known as cycle counting. Cycle counting is the process of selecting a small daily sample of your inventory, and systematically moving through the entire inventory over time. Normally this process is supported by specialised cycle counting software. The lower the inventory accuracy tolerance you want, the more often that item will be counted over a year. This allows you to systematically identify and analyse the exact causes of inventory differences.

Maintain a high level of cleanliness in your warehouse creates a more professional working environment. Such practices include, but are not limited to, regular cleaning of toilets, warehouse floors, machines, and materials handling equipment. Pick-up dirt anywhere you see it and throw it in the dustbin. When operations are clean and clear, it is easier to spot irregularities and cargo left around.

People management and culture are other critical areas to look into. The right people in your warehouse start with hiring the right personnel. Less than 20% of the companies are checking the CV of an applicant. Many applicants lie about their CV, in particular their working experience, height of salary, and reason of resignation. In the personnel advertisement, please state that an antecedent examination is part of the selection process. This might already deter certain people to apply with your company. A simple call to the former employer reveals a lot about the candidate. Make it a habit to ask the applicant about his experience with pilferage situations in his previous jobs. This clearly conveys that the company is alert on this matter. Pilferage cases require swift action. Inadequate responses from management not only continue pilferage cases in your warehouse but exacerbate the situation.

Facility design and flow management is another prime area to address. Emergency exits provide potential entrance to outsiders. Are all entries to the building properly supervised? Is the fencing around the building high enough to avoid people climbing over it or throwing expensive cargo over the fence? How are trucks and cars routed at the site? Can vehicles be parked next to the warehouse (door)?

Many advances have been made over the past ten years in new security technologies that are today affordable for even small companies. For example video surveillance as a service today is a good alternative to physical security around the clock. During odd hours this technology further allows companies to have deliveries or pickups when no staff is around in the facility.

As insurance clauses are continuously revised and assuming extensive prevention by the company, you better stay on top of this!