Cosmetics stolen from UK warehouse - can you prevent inventory theft?


Cosmetics stolen from Aldershot warehouse - can a RFID (radio frequency identification) or barcode system prevent inventory theft?

Theft of inventory has cropped up 3 times from clients in the last 3 months, so I wanted to answer some of the questions that companies have asked me about can a warehouse management system prevent inventory theft and if it occurs, can you track the stolen items. These are the 3 real cases I have seen recently.

1. A UK manufacturer and distributor of locks was burgled 3 or so times this summer which stopped the inventory management project going ahead - £30K was spent instead on CCTV installation.

2. A Client of ours that manufactures lifts is putting in a full stock control system with barcodes globally to try and prevent inventory theft.

3. And today I read in the news about cosmetics being stolen worth £20K from a warehouse in Aldershot. The police have asked for anybody that has been offered these cosmetics to contact them. But how would I know if it was them if I was the guy in the M40 services who was offered them?

OK, first can a warehouse management system prevent inventory theft?

By having traceability on what came through the door against your purchase orders and then labelling them to be put away into stock, that is a good start. Various points of note:

>> Pallets going out that when checked, are empty on the inside as cases have been built around thin air to appear like a full pallet. This was a case I saw on an existing Client of ours and was picked up by the guy dispatching them, just in a random quality check.

>> This dispatcher person should ideally be different from the person picking.

>> Stock is sometimes claimed to be damaged when in fact this is the operator pulling a fast one, so make sure the operators have to record all damages with reason codes. I witnessed this practice when working in a clothes retailer when sales assistants would ''accidently" soil a garment so they could get it cheap or just take it home as it was unsaleable. Same as inventory theft, just they get approval to take it home; they then wash it, done.

>> When you have the warehouse operators logging in to the system to do anything, this is stamped so you have the full traceability to back track and see who did what. When I worked at Symbol (now Motorola), and the portable shopping scanners were installed at supermarkets like Waitrose, theft reduced - same concept. I forget the figures, but it was impressive...and probably a good contributor to Tesco rolling thousands of these out at the moment.

Second question, can you track stolen items using this technology?

We often have Clients who want to track not only the inventory, but also the handheld mobile computers that are worth £1-2K each. Makes sense as they are expensive items. and they do get lost. How? Left on top of pallets or trucks are most common causes. The request is often can we tag the item with RFID. Conceptually good, realistically bad, as I could shield the device with my body and the tag would not read - same concept with the gates that go beep when you walk out of a retail store with an item that still has the security tag on.

To track stolen items, this is possible if every item is given a unique serial number, like a licence plate on a car, so it is not just a red Audi, it is THAT unique red Audi. So now, if I am in the M40 services and somebody kindly offers me the cosmetics, I can phone the police/manufacturer who can check the unique serial numbers and confirm whether they were stolen or were sold legitimately. M&S do this unique serialisation for every suit sold for example - amazing. This is what companies also use for food recalls, so that rather than recalling all, they can track the items with unique serial numbers.

In summary, you can track stolen items using unique serial numbers for every product, but that is relying on someone giving you a call, which in most cases, is highly unlikely. Inventory theft can be prevented by close monitoring through a system.