Inventory loss is an unpleasant topic that no one likes to think or talk about, but it exists, and it can come from both inside and outside the company. Internal loss can be both intentional and unintentional. Intentional being outright theft, and unintentional being when operational errors are inadvertently committed. External loss occurs when an individual outside the organization is involved in intentionally committing some kind of fraud or theft.
Regardless of the cause or kind of loss, or “shrink” as it is referred to in some industries such as retail, businesses should take measures to help deter and prevent company loss. We’ve compiled our top six actions to reduce loss for your business.
- Selective Employment Practices – Take time to vet potential employees for proper fit in the company culture and with the team. Use multiple interviews, personality tests, and exercises to make sure the people you are bringing into your company are quality hires. You can prevent internal loss before it even starts by making sure the people you’re employing can be trusted.
- Documenting Operational Procedures – Providing guides for operational procedures on how to handle inventory is key to loss prevention. This minimizes human error in accounting for and tracking items. Also having documentation on good stock-keeping and inventory best practices ensures that items simply aren’t misplaced or unaccounted for. This is especially important when operating with large numbers of SKUs.
- Employee Training – While having documentation is a step in the right direction, loss can be prevented through implementation of your documented practices, and this starts with proper employee training. It’s never too late or out of line to request that employees get more training. Smaller companies often skimp in this area because resources are scarce and it’s a sink or swim situation; however, making sure that employees feel comfortable and confident in their positions is important. Taking time to answer questions and be patient with mistakes makes employees feel comfortable and they will put their trust in you.
- Electronic Security Systems – Loss prevention requires installing business security systems. This will help the business document and monitor employee and outsider activity. Many electronic security systems (ESS) now also include remote monitoring access allowing you to log in to your account from a mobile device with Internet connectivity to see current activity or to review security footage. Video surveillance security cameras, property alarm systems and point-of-access control are also key systems used to stem loss.
- Security Tags on Inventory – While security tags on inventory is specific to certain retail operations, security tags serve as a great deterrent for theft. Individuals are discouraged from taking items that have been tagged because they are time consuming and difficult to remove, and they also draw attention to potential thieves because by setting off alarms or staining hands and clothing with ink.
- Investing in Employees – One of the best ways to prevent loss is to invest in your employees. Invest in team building exercises and trips, as well as employee’s personal goals. When you have happy employees with close relationships, it makes it difficult for the person to want to steal things from the company.
Planning an Electronic Security System (ESS) for business is easier than ever. Check out System Surveyor for iPad on the App Store for simple planning and management. It’s ideal for Facility and IT managers responsible for surveillance, access control, loss prevention and other components of a comprehensive security solution.