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10/24/2010

Keys to Preventing Supply Chain Theft

SupplyChainBrain | October, 2010 

An effective program requires more than such “cosmetic” trappings such as uniformed guards and closed-circuit TVs, says Barry Brandman, president of Danbee Investigations. He offers a number of tips on how companies can detect collusion and crime occurring within their facilities.

Warehouse thieves have evolved into extremely sophisticated and efficient operations. Brandman speaks of one company, a pharmaceuticals manufacturer in Connecticut, that lost $70m worth of drugs. “It was not a random, drive-by crime,” he says. Multimillion-dollar thefts are no longer an unusual phenomenon. Stolen trucks and dishonest employees are also becoming increasingly common.

In trying to protect against theft, companies make their biggest mistakes in two areas, Brandman says. One is an inadequate focus on being proactive. In many cases, “safeguards were waiting to be put in place when they learned of the problem. It was too late.”

The second major problem is an over-reliance on the trappings of security. Cosmetic safeguards such as uniformed guards, intrusion-detection systems and closed-circuit TV have their place, but they are often not utilized in the proper way. Professionals steal the video recorders, and none of those measures will adequately protect against employee theft. “No one has the time or patience to watch hours of video each week,” says Brandman.

Typically, a major operation will involve multiple individuals who have studied the target facility for days or even weeks, becoming intimately familiar with its points of entry, alarm systems and guard schedules. “They know more about alarm systems than the companies that install them,” Brandman says. Often they are aided by workers on the inside, who will take pictures of the interior to aid in the identification of key security measures.

Employee “tip lines” only work if they are managed by an outside party and guarantee absolute anonymity to the informant. “If they contact us at Danbee, the first thing we tell them is don’t tell us your name,” Brandman says. Instead, they are assigned code numbers which protect their identity, even if they receive a reward for their actions. That level of confidentiality engenders the trust of honest employees, and makes it more likely that they will call back in future, he says.

To ensure the security of a warehouse, Brandman says, “you have to discount what you see in the movies.”

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