Guarding Against the Top 3 Forms of Supply Chain Theft

Once a product leaves a warehouse, the business loses its direct control over the item. Merchandise on its way to customers or supplies coming in from vendors are at risk for theft, and companies need to find solutions to extend supervision beyond their physical property. While criminals are unpredictable, dependable inventory management can help mitigate risk and prevent stolen property from going unreported.

By adopting a flexible supply chain logistics management solution, business leaders can use data and mobile devices to create a system of transparency across all locations. Here are three common theft targets in the supply chain and how companies can secure their products and assets with data collection visibility:

1. Inventory Theft

Research from the Tyco warehouse security company found yearly theft of products from the supply chain amounts to about $35 billion, according to SupplyChainBrain. The industries most likely to be hit by thieves are electronics and foods, but every company should lookout for possible theft as criminals have started to target smaller businesses in addition to large corporations.

One of the primary sources of theft are individuals hijacking trucks in route to delivery. This may happen through shattered windows and hot-wiring or just jumping into a cab of a vehicle left idling. Thieves have also been known to break into warehouses or other business locations. Sometimes companies will make things easy for criminals by leaving valuable property outside.

Some common sense can help eliminate the risk of theft. Delivery drivers and warehouse managers have to prioritize security while performing their daily operations. Providing employees who handle merchandise with mobile data collection devices allows them to report inventory movements. Participating in a system of visibility forces workers to think about their actions before they log the information. It reinforces good habits like double checking and referencing centralized data to learn where the best place to stop a vehicle is or where merchandise should be stored.

2. Missing Assets

Many warehouse management systems use barcode scanners to track inventory movements. These organizations might think about using a similar solution to keep an eye on their pallets and bins. Supply Chain & Demand said company assets used to move and prep inventory are often overlooked as targets for possible theft. Companies must learn to recognize what thieves already know; all business equipment has some value.

If a company wishes to secure its supply chain, it must recognize where the holes in its security currently exist and what type of crime is most likely. Inbound Logistics described how warehouse risk management usually falls into three categories: physical mitigation, analytical mitigation or financial mitigation. Business leaders need to decide if the primary goal of supply chain security is to protect their physical assets and inventory, the success of their operations or their financial investments.

Deciding whether to view a theft as a loss of property or money will determine which security risks get the most attention. For example, inventory may be worth more than warehouse pallets, but losing too many pallets may shut down operations and cost a business clients. When workers can track both assets and inventory through barcode data collection systems, overseers can determine how important each item is in the supply chain. A complete record of movement and use will also help determine liabilities and needs for improvement.

3. Cyber Attacks

Using data to track supply chain activities provides complete visibility of sensitive information and companies need to assign who can see it. Providing drivers and warehouse workers with mobile data collection tools means organizations have more users they have to account for. Cybercriminals often gain access to data systems through portals and information provided for business partners like suppliers or distributors, according to Supply Chain Quarterly.

Consistency in assigning credentials, creating log in procedures and monitoring access is critical to maintaining cyber security. Companies must be sure all users – both internal and external – prioritize proper access procedures and use the same security verifications.

A big problem with data breaches is that it can be a long time until a company realizes an attack has happened. Routine audits of assets, activities and data records helps overseers notice when things are amiss. An automated data collection system provides a full record of activities than can be checked and compared to best practices.