Warehouse Security Best Practice
With financial losses as a result of theft amounting to up to 5% of turnover, improving warehouse security has the potential to make a big difference to profit margins. In this in-depth guide to warehouse security from Titan Security Europe we discover and discuss the warehouse security best practices that matter. Along the way we uncover and examine:
- Shocking financial loss statistics
- Types of warehouse security issues
- Physical security measures inside and outside your premises
- Manned security guarding services for warehouses
- Policies and procedures to enhance warehouse security
- Warehouse security best practice guidelines
Addressing warehouse security concerns
Owners and managers of warehousing businesses are often left wondering why their financial bottom lines are lower than expected. In many cases, the answer is theft – much of which goes unseen and unpunished. This is generally referred to as slippage and studies suggest that in the worse cases it is costing retail and warehousing operations as much as 5% of annual turnover.
Lost inventory from warehousing facilities is an ongoing and hugely expensive issue for many businesses. A warehouse is a fast moving environment and particularly so in the food and drink industry. A busy environment like this without the right levels of security can provide easy pickings for people intent on helping themselves.
With multiple entrances and exits, employees and visitors coming and going and stock moving in and out, uncovering and addressing warehouse security weaknesses could make all the difference
Warehouse security needs to be a tightly considered and actioned approach. Studies show that small to medium enterprises do not focus on warehouse security to the same depth that many larger businesses do and as a result, are more at risk.
Theft from premises is not the only issue a comprehensive warehouse security strategy needs to address. Your warehouse security procedures should also take account of how to protect your goods whilst in transit if you also operate a delivery service.
The importance of warehouse security
Is the focus on security just another budget-busting drain on your company finances? The answer is a resounding no! Take a look at the statistics in the next section. If you’re not focusing on continually improving your warehouse security procedures then your business is almost certainly taking a financial hit every day. In the long term, investment in security today will improve your business bottom lines tomorrow and repay itself many times over.
Threats to Warehouse Security
There are three key areas that are the root cause of financial loss to warehouse businesses as a result of crime.
1. Employee theft
Employee theft from warehouses can range from petty theft where employees help themselves to the occasional “treat” up to employee-orchestrated mass theft and fraud and anything in-between. Surprisingly, this is the number one reason that warehouses lose money. Without robust security policies to manage it, employee theft can easily go undetected and it is widely thought that the real statistics are under-reported.
Financial estimates indicate that globally, companies across all industries and sizes lose up to 5% of their revenue to employee theft each year. That’s a loss to business world-wide of more than $4.5 trillion. Losses in Europe attributed to employee theft in 2019 stood at around $6.105bn
2. Theft of cargo in transit
In addition to theft of goods stored in a warehouse, goods in transit also receive a lot of attention from criminals. It is not unusual for a lorry in Europe to be transporting a multi-million € cargo and there are crime gangs taking advantage of transport security vulnerabilities every day.
In 2020, of all incidents recorded by the Transport Asset Protection Association (TAPA) EMEA 74.6% involved cargo theft. In the United Kingdom (3100) and in Germany (1,727) incidents were reported over the 12-month period.
It is estimated that cargo theft represents a $15 to $30 billion dollar cost to business globally and with reporting and statistics gathering thought to be low, the real cost is undoubtedly much higher.
Rather than cover this important topic here we have dedicated transport security its own section
Find out more about preventing cargo theft with Titan Security transport security services.
3. Walk-in theft and burglary
When a business does not keep a meticulous track of its entryways and exits or monitor and check the credentials of staff and visitors entering and leaving the premises, it’s easy for a walk-in thief to take advantage of the busy environment and take off with a serious haul of valuable goods.
Some busy warehouses are open and running 24 hours a day and 7 days a week. Businesses that close down at night or at weekends are more vulnerable to burglary. Even warehouses that remain constantly open might well close down for some of the major holiday periods. When a warehouse is closed it is at its most vulnerable to a break-in.
The UK 2021 Commercial Victimisation Survey (CVS) estimated that 38% of business premises (151,000 premises) in the wholesale and retail sector in England and Wales had been a victim of crime between April 2020 and March 2021. (Incidents of verbal and physical abuse are included in these statistics)
So let’s now get into the detail and take a look at some key aspects of providing the best possible warehouse security:
4. Administrative and staffing security
You may not have fully realised the vital part that your administrative procedures can play when attempting to reduce loss by theft. Many aspects your admin system are incredibly important to the overall security of your warehouse and some relatively minor changes can bring a lot of benefits.
Recruitment: Given that theft by employees is the major source of inventory shrinkage, employing the right people is vital. Whether you use a staff recruitment agency, or do your own recruiting, it is important that your reference uptakes, criminal record searches and background checks are as thorough as possible. If you use agency staff you should take steps to make sure that their own checks are equally as stringent.
Induction and Training: Does your induction and subsequent training represent your company security policy and procedures in a way and in the amount of detail that new and existing personnel understand exactly what is expected of them? Your training should aim to promote a strong culture of shared responsibility for security in within your staff teams.
Inventory Management and Monitoring: Integrating warehouse security with your inventory management system is a great way of receiving early warning signals that not everything is as it should be.
Cycle counting examines smaller sub-sections of your inventory in detail for accuracy. It might be that bar-coding when directly linked to your inventory management system can offer real-time data to be used for instantly flagging these discrepancies.
Shrinkage measures losses using actual deliveries to measure the difference between predicted sales and actual sales. Constantly monitoring shrinkage in this way means that you can measure security performance improvements as a result of the new security procedures you have introduced.
Visitor Policy: Using the full range of layered security procedures, ensuring that visitors are checked, signed in and out and easily identified will provide the levels of visitor management that cut the potential for theft. It might be that temporary ID is issued or perhaps that visitors are escorted to and from the particular area of your warehouse by designated staff or security personnel.
Developing a bullet-proof warehouse security plan
Upon examination, many of the security vulnerabilities that cost warehousing businesses lost revenue are a result of a lack of organisation; both in terms of the physical security of the premises and the lack of attention to security as an integral part of employee management systems.
A professional security company like Titan Security will offer an expert security consultation and assessment service that will dissect your security arrangements, test for issues and vulnerabilities and propose a fully costed security plan designed to plug even the smallest of security gaps. It’s always a good idea to have your security arrangements independently and objectively assessed by a third party.
Contact Titan Security to arrange an expert security assessment
Security guarding for your warehouse
If you have been considering contracting out your warehouse security you should rest assured that not only can security guards make a real difference to your bottom lines by preventing theft, their highly trained, professional and reassuring presence can be utilised in so many different ways:
- Mobile patrols and alarm monitoring and response
- Remote or on-site CCTV monitoring
- Perimeter patrols with and without security dogs
- Manning barriers and gates to check credentials and enforce access control
- Parking control
- Checking windows, doors, skylights
- Intervention in physical or verbal assaults
- Manning reception desks and carrying out baggage searches
Working through this guide to warehouse security you can begin to shape your security strategy. Regular security reviews can then help you build upon and continue to improve on the measures you put in place. As a leading international security contractor, Titan Security can help you analyse what is working well and shape the services you receive to provide maximum effect at best value for money.
Ready to take the next step?
For more expert advice and information or to book a professional warehouse security assessment anywhere in the UK or Europe, give the team here at Titan Security Europe a call on +441803 446004 or send us your details using the form below.