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4 Steps to Reduce Warehouse Theft and Pilferage

The statistics are real—and they are alarming.

Theft costs companies over $15 billion annually, finds a Cisco-Eagle whitepaper titled “Industrial & Warehouse Security: Put a Stop to Theft and Pilferage” This includes product theft, fraud, and false inventory and shipping counts. 

There are also indirect impacts to these losses. They include higher insurance premiums and reduced customer satisfaction and trust due to inventory issues.

Two statistics in the whitepaper shed light on where the real problem lies. Eighty-seven percent of theft occurs in freight yards and warehouses. This theft costs warehousers, manufacturers, and shippers an estimated $15 billion a year.

Paying attention to security helps companies reduce warehouse and freight yard theft. In fact, Cisco-Eagle finds improving security can slash theft by 38 percent and product tampering by 37 percent, saving thousands and thousands of dollars in the process.

To help prevent more theft we’ve put together a warehouse security checklist:

1. Audit Physical Security  

In 2017, CBRE Group Inc. reported the average U.S. warehouse size had doubled since 2002. As e-commerce continues to grow, so has the girth and height of the warehouse, reports the Los Angeles-based commercial real estate and investment firm.

Today, the average warehouse footprint is 184,693 square feet and the average height is 32.3 feet. 

Securing such vast spaces seems complicated and overwhelming. But a security audit is a great place to start. These audits examine every entrance and exit to identify vulnerable areas inside and out. 

With this information in hand, companies can systematically address security vulnerabilities through a warehouse security system that includes access control systems, video surveillance, warehouse alarm systems and other measures designed to protect against forced entry.

warehouse security

2. Defend the Perimeter

The next step toward greater security is defending the perimeter. Warehouses are typically located on vast expanses of land in remote areas, making them likely targets for crime. 

First, evaluate the exterior perimeter for vulnerability. 

Then, fence the area around the building to keep unauthorized people out. Pair perimeter fencing with bright lights; access gates, equipped with warehouse security cameras and license plate recognition (LPR) systems; and sophisticated security cameras with video analytics to further heighten security.

Warehouse security cameras with built-in analytics begin to learn a surveilled scene the minute they are plugged in. They quickly decipher the difference between a human, a vehicle, and other objects. Once they know the scene, these cameras trigger automatic alerts if an unauthorized vehicle or person moves into an area and stays for a while.

When integrated with LPR, the surveillance cameras automatically read vehicle license plate information and link it to live and recorded video. This capability allows warehouse operators to load white list license plates and license plate watch lists. The system can then send alerts when unauthorized vehicles try to enter. 

Companies can also set loitering parameters when the warehouse is closed. Should anything suspicious occur after-hours, the surveillance system automatically sends an alert to a security guard, a monitoring station, or to the police station itself. 

Low-tech security measures also help. These include locating Dumpsters and trash receptacles away from the building; enclosing and locking HVAC systems and utility pads; eliminating shrubs and bushes from entries, exits, and loading docks; moving parking away from dock areas and truck parking lots; and separating shipping and receiving docks.

3. Control Access into the Warehouse

After securing the perimeter, the next step is to install a state-of-the-art, auditable, and electronic door warehouse access control system. This system controls who has access to the facility and when they have access. 

There are four parts to a warehouse access control system: credentials, readers, control panels, and door locks. Each plays an important role.

Employees receive a credential, which can be a smartcard, key fob, code-pin, or biometric. A card reader, biometric scanner, receiver, or keypad reads these credentials and converts them to a unique identification number. The control panel compares this unique identifier against an approved list. If the ID has a match, the door lock disengages and allows access.

Sophisticated door access control systems also maintain a detailed record of who enters and leaves should an incident occur. And, if an employee quits, warehouse operators can quickly and easily lock them out. 

Adding RFID to employee badges allows companies to track employee activities throughout the facility. Likewise, putting this technology into visitor badges provides positive identification as visitors move through the facility. 

Access control also includes hardening weak points, such as fire exits, roof hatches, skylights, and windows. All should be locked. Companies can install bars or gates on windows, but they also should install door and window contacts to detect break-ins, glass-break detectors to watch for smashed windows, and motion detectors to look for intruders.  When these sensors detect activity, they trigger an alert to check on the areas in question.

Low-tech approaches further enhance access control. Conduct employee background checks to ensure employees are not career criminals. Train staff on security awareness. Create an atmosphere where it’s safe to report suspected problems. 

Finally, design the facility with security in mind. Do employees have to walk through aisles of high-value goods to get to the restroom?  Can employees walk unobserved through racks of products? Are managers in offices rather than on the floor monitoring employee activity? Changes here can also improve security.

4. Surveil the Scene

The inside of a facility also requires a step up in security. This includes installing security mirrors in strategic locations to observe activity in rack aisles, at docks, and other opportune areas. It also includes installing a sophisticated warehouse security camera system. 

Warehouse surveillance cameras should operate 24 hours a day/365 day a year. And, companies are advised to store video footage for at least 30 days. It is also a good idea to keep areas brightly lit to ensure individuals on the resulting footage are easily recognized. 

warehouse security camera

Remote monitoring capabilities further enhance surveillance. Warehouse operators should be able to monitor multiple locations from a command center, desktop and tablet computers, or smartphones. 

IP security cameras make this possible. These small computers receive control data and send image data via the Internet. They offer higher frame rates than analog cameras; work well in the busy, motion-packed warehouse environment; and produce sharp, clear images. 

When an IP surveillance camera system is tied to Video Management System (VMS for CCTV), warehouse operators can record and view live video from multiple surveillance cameras.

VMS integrates with surveillance cameras, LPRs, access control systems, burglar alarms, and motion detection systems. This allows users to manage all aspects of their surveillance system in one place. 

IP cameras and video analytics with live monitoring by a security guard provides the best of both worlds. It speeds up response times and ensures events are dealt with quickly.

When operating a facility that has thousands of dollars in assets, a large workforce, and people/trucks entering and leaving regularly, an ounce of prevention is worth a pound of cure. Taking these four steps will protect your property, your people, and your profits from harm.

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