Tom Andel

Keep the crooks out
July 7, 2008

These are not easy times to find a lot of good talent to work in your distribution center. As we’ve discussed in this blog before, kids in school aren’t drawn to distribution as a career. Some people are though, because they see it as a lucrative source of cash.

I’m talking about crooks. Distribution centers are a prime target for supply chain criminals, especially in a tough economy, where easy money draws even people who thought they were honest into a web of deceit.

Gang members and organized crime groups can either infiltrate your organization or recruit from within it. They know how to bypass security cameras and, as the old Roger Miller tune “King of the Road” said, they know every lock that ain’t locked when no one’s around. This learning takes time and these guys are willing to spend it if the payback is right. They’re patient.

They’re patient enough for you to cross-train their people on various distribution center tasks. While they’re learning, they’re picking up details on security structure and procedures.

Now we’ve always profiled companies that do cross-training as a distribution best practice. I’m not debunking that practice. American Eagle, the big fashion retailer, has made it work quite well for them in their Ottawa, Kan. distribution center. But it has to be done carefully.

I recently spoke to Bob Frucci, a licensed private investigator specializing in cargo crime in and around New Jersey and New York. He suggests you keep people fairly close to their specialties.

“There’s no reason for a dock guy to have access to the office and know where you keep your documents,” he said. “You have to do cross training, but to what level? You can’t open up the whole store. There have to be checks and balances. Even within a security organization the supervisor will have access to more information than one of the security guards. Some checks and balances should be hidden within, some covert, some overt. When someone knows your security procedures inside out, they have the keys to the kingdom and it’s nothing for them to pass that information on.”

It’s also a good idea to secure all your shipping documents and materials. These include sequentially numbered security devices, truck seals and bills of lading. These can be valuable tools to a criminal. Yet, Frucci told me, he’s seen truck seals left out in the open so anybody could grab one.

He suggests you do what they do in banking. If you suspect someone in your organization is steeling or is involved in something bigger, make that person take a week off. Then look for holes. At one company Frucci was investigating, he found that one of its most trusted employees was selling stuff out the back door on Saturdays.

“He was able to protect his game for about three years because no one else had the opportunity to be there,” Frucci said. “When we got there on a Saturday morning we pulled him to the side and watched his game go down and the trucks started showing up. We identified his activity and where it was going.”

As fuel prices continue to climb and companies add more distribution centers and cross docks to their networks, security problems are bound to escalate. This is a good time to take a closer look at internal procedures and whom you’re entrusting to perform and manage them.

Posted by Tom Andel on July 7, 2008 | Comments (0)