Barry Brandman, President of Danbee Investigations, is one of the country’s top business security experts and author of “The Executive’s Guide to Business Security.” He is also a consultant for the U.S. Department of Homeland Security, Customs and Border Protection, and presented at the WERC Annual Conference for Logistics Professionals in Columbus, OH last week on protecting the supply chain from sabotage, theft or terrorism. Brandman said that “theft is economic cancer,” and that by the time theft is discovered, its often too late - resulting in bankruptcy for the company.
Brandman discussed why theft-related loss is getting worse, and said that the value of the product plus a low risk factor, lax security and an inadequate criminal justice system equals high gain, low risk. Plus, says Brandman, the internet combined with small parcel delivery service make it easy to distribute stolen goods. Thieves – often internal - who work together can result in significant loss to the company.
Brandman gave one example of collusion between a warehouse supervisor and company drivers that resulted in a $380,000 loss over 6 months. The supervisor allowed extra, un-manifested product to be loaded onto company trucks where it was sold by the drivers during their run – and the drivers then gave a percentage of the proceeds back to the supervisor. Brandman said 70% of the time product is sold before it’s stolen, and thieves are apprehended less than 3% of the time.
Peripheral costs associated with product disappearance include the risk of tampering; price integrity that is compromised by product being sold for less through other channels – usually on the internet; legal & investigative costs; replenishment costs; and the loss of customer confidence in the case of 3PLs.
