Preventing Supply Chain Pilferage
No matter where your products are in the supply chain, there’s always an opportunity for a bad actor to steal or pilfer them. This is an unfortunate reality for businesses across the globe, but thankfully there are a few straightforward ways to reduce supply chain pilferage. Before breaking down the different methods though, we need to understand exactly what pilferage is and how it impacts industries throughout the country.
What Does Pilferage Mean?
For those new to shipping, it’s possible you’ve never even come across the word pilferage as it relates to supply chains. The term is commonly misunderstood as a synonym for theft, but actually means something a little different. When it comes to supply chains, theft refers to an incident where an entire pallet, shipment, truck, or
container is stolen. Alternately, pilferage refers to when just a few boxes or items are taken. Essentially, pilferage is just skimming off the top. Those who pilfer items are often hoping that because they’ve taken only a few things that no one will notice and, oftentimes, these occurrences are never recorded or only noticed at the point of delivery.
How Pilferage Impacts Supply Chains
While many companies are reasonably concerned about unattended trucks being stolen or raided, they should also be concerned about smaller scale pilferage. According to Sensitech’s 2018 Cargo Theft Annual Report, pilferage accounted for 18% of all cargo theft occurrences in 2018. This many not seem like much, but this was the highest amount ever on record and a nearly 200% increase over the same type of event in 2014, just four years earlier. Of all pilferage incidents, electronics were the most commonly taken items, followed closely by home and garden supplies, which include appliances. In fact, 26% of all supply chain electronics thefts were considered pilferage. Pharmaceuticals are another product that are frequently pilfered from shipments, as they are usually a smaller, less noticeable item that can be sold for significant amounts. When it comes to pilferage from warehouses or other storage facilities, it is 406% more common for pharmaceuticals to be stolen than any other product category.
Managing Your Supply Chain
Whether you’re a seasoned supply chain veteran or are new to your industry’s shipping, handling, and transit processes, we all understand that an effective supply chain is essential. When products are stolen, the result is an ineffective supply chain that loses money and wastes time. This is why it is so important to take thorough steps to minimize pilferage.
Inventory Management and Security
Much of the time, it’s difficult to actually know when your materials have been pilfered. The whole point of pilferage is to take small quantities in the hopes that the crime will go unnoticed. For this reason, it’s key that you keep track of your inventory at all points of the supply chain process, beginning in the warehouse and ending at the delivery location. When it comes to your warehouse or storage facility, you may want to consider taking inventory of your products more often, instead of once a month or less. To do this efficiently, you could continuously take inventory of small sections of the facility multiple times a week or enlist more employees to perform complete inventories more often. Keep track of these details using inventory management software instead of manually so that you don’t miscount or misplace your information. Additionally, don’t store your highest value products (or any, if you’re able) close to exit points or loading bays, as this makes it easier to take goods and slip out the door unnoticed.
Track Your Shipments
Monitoring your goods as they move from your warehouse to their final destination allows you to see exactly what’s happening with your shipments. If the truck transporting your products through town takes an unexplained detour and then some of your items come up missing, you’ll have a pretty good idea of where they were when they disappeared. Should you make an insurance claim or file a report with the police, this will also help prove that you didn’t simply misplace your products somewhere along the way.
Use Common Sense and Invest in High-Quality Protection
Utilizing high-quality materials and resources to protect your goods is a simple and effective method for reducing pilferage. This means purchasing durable locks for your trailers and containers that are difficult to break through and ensuring that only the necessary people have the keys or codes. Control who has access to your facilities and always make sure to do thorough background checks on new employees. On days when your warehouse isn’t crowded with people, such as weekends or holidays, make sure security cameras are rolling and that all doors are locked at all times. When your goods hit the road, it’s inevitable that the driver will eventually need a break, but try to minimize the amount of time the trailer is left unattended and always park the truck in well-lit, busy areas.
Less Pilferage Leads to More Savings
It should go without saying, but any kind of pilferage or theft will cost you money. You’re out the cost of the stolen item, plus you have the added expenses of replacing that product, as well as wasted labor hours filing insurance claims and trying to figure out what exactly happened. It’s in the best interest of everyone involved in your supply chain to take these important steps toward reducing pilferage.