Theft Resistant Logistics Systems One Term Paper
- Length: 9 pages
- Subject: Business
- Type: Term Paper
- Paper: #54364044
Excerpt from Term Paper :
Instead, companies must take steps to make sure that all points of their documentary trail are easy to audit and make random, surprise audits. One of the most important things that a company can do is to "make sure that one individual doesn't control receiving, inventory, disbursements, and adjustments" (Bolger, 2005). By making more than one individual responsible for various aspects of cargo transit, a business may not decrease the likelihood of theft, but they will at least increase the likelihood of a leak if a crime ring develops in the business. When theft is detected, companies should investigate it immediately, due to the fact that many incidents of internal theft are part of larger long-range schemes; investigating a single theft incident may uncover greater losses and point to security breaches that need to be remedied. In addition, companies need to make sure that their cargo contracts clearly specify security procedures (Mayhew, 2001, p. 3). Before a company accepts delivery of cargo, any documentation or packaging that appears questionable should be investigated, and if questions remain about the validity of documentation, the company should refuse delivery (Mayhew, 2001, p. 3). Furthermore, companies should take steps to make it more difficult for the employee-thief to duplicate documentation. For example, companies can make sure to send electronic versions of their shipping records at the time of shipment, eliminating the possibility that a driver can create duplicate paperwork with reduced cargo counts. Even if a company can not afford an electronic cargo management system, almost every company today has access to e-mail and could send customers shipment e-mails when cargo is loaded onto a truck. In the event that a company uses a computer system for inventory control or shipment notification, it needs to "control access to company computer systems that contain information on shipment dates, bills of lading, shipping invoices, customer requirements, carriers to be used and values" (Chubb Group). Finally, cargo should be subject to inspection both prior to being shipped and at the time it is received, to make sure that all of the cargo that was supposed to be shipped was actually shipped and that the same amount of cargo was received.
Of course, not all theft occurs via documentary fraud; many thieves engage in more traditional forms of theft, including just walking off with cargo. One way that a company can help limit crime is by carefully screening its employees; mandatory background checks for all people involved in the transportation or storage of freight can eliminate employees with known criminal propensities. Of course, companies cannot keep from hiring criminals merely by using background checks; effective criminals may have been stealing from companies for years without being detected.
However, background checks are one way to reduce the criminal element in the workforce. In addition, companies should implement policies that encourage employees to monitor other employee behavior, such as anonymous tip lines (Mayhew, 2001, p. 3).
Finally, companies need to implement zero-tolerance policies towards employee theft; despite the inconvenience of prosecution, employee offenders should be prosecuted as well as terminated.
Of course, there are other methods of limiting cargo theft by employees. One way to do so is to limit the length of time that multiple people can access the cargo. For example, trucks should not be left waiting for long periods of time, both to reduce the risk of theft from the truck and to reduce the risk of the driver accessing other cargo. "Merchandise should never be left on loading docks for long periods of time" (Mayhew, 2001, p. 3). Furthermore, parking facilities, both for employees and visitors, should be off-site, if possible, or away from storage areas. Empty containers, rubbish containers, and outbound vehicles should be subject to frequent, random checks, because they can be used to store or transport stolen cargo (Mayhew, 2001, p. 3). Finally, companies need to maintain separate high-value rooms, where they can isolate property of higher value (Hoaglund, 2003, p. 40). These high-value rooms should have as much security as is feasible, including dual-lock door systems and security personnel (Hoaglund, 2003, p. 41).
While it is difficult to prevent theft while at a company's own facilities, the problems that companies face of theft reduction while cargo is in transit are even greater. Theft in transit can occur either with the participation of the driver or when cargo is taken by force from a driver, and can occur at great physical risk to the driver. In addition, theft in transit can be planned or crimes of opportunity and the incidents vary greatly in planning and levels of dangerousness. Organized crime syndicates, both traditional and modern gangs, are frequently involved in-transit thefts, which increases danger to the victim-drivers, both at the time of the theft and afterwards during any eventual prosecution. In-transit thefts occur when cargo is transported via truck, water, rail, or air. While each method of transport presents thieves with unique opportunities for theft, there are things that shippers can do to limit in-transit theft. For example, shippers can vary their shipment schedules both to keep their shipments unpredictable and to limit the number of stops each shipment must make. In addition, if businesses can limit the amount of time cargo is in transit, they also limit the number of opportunities a thief has to steal the cargo. If cargo is expensive, or particularly vulnerable to theft, businesses can provide security, either in the form of security guards who escort the cargo, or by having the cargo transported in conveys, to lessen the risk to each individual truck. Trucks and railroad cars are particularly vulnerable to theft, because they are accessible from all sides at an almost infinite number of points. One way to reduce the risk of theft, especially from rail lines, is to increase surveillance on the items. This may be done by having a non-conveying surveillance vehicle accompany the shipments, or by having random surveillance points set up along the shipping route. Air transportation, especially in the heightened security that has followed 9-11, may be the most secure way to transport cargo. Airports tend to have better security than docks and freight yards. However, cargo cannot typically be transported solely by air, due to the location of airports and the location of suppliers and consumers. While airports may be able to limit cargo loss, they also deal with issues of international shipments and delays caused by customs, which an increase the time cargo is in transit, thereby increasing the opportunities for theft. Interestingly enough, shipment by water may actually provide the greatest opportunity for theft. Not only are docks and ports difficult to secure, but vessels are subject to piracy once they hit the open-seas. To limit the risk of theft during maritime transport, companies can ship with ports that have the most secure cargo-handling facilities. In addition, making sure that cargo containers are secure prior to being moved to a port can reduce a company's risk of loss. Finally, companies can avoid shipping via sea through areas with known high piracy rates.
The risk of theft in transit is also increased because a company frequently has to other companies to provide the transit, reducing a company's control over who comes in contact with its cargo. A shipper can reduce those risks by selecting "a transportation carrier that is reputable, experienced in handling, highly attractive cargo, has appropriate equipment and procedures, and maintains an excellent loss history" (Chubb Group). In addition, shippers can select carriers that perform extensive pre-employment screening. Furthermore, shippers need to make sure that any contracts for transport specifically delineate the security measures that a carrier is obligated to follow or provide, loss reporting procedures and timelines, and who is responsible in the event of loss. Finally, shippers need to monitor outside carriers during the terms of the contract to ensure that carriers are in compliance with the contract.
Obviously, given that cargo-theft occurs at all points in the logistics system, there is not one simple approach to deterring cargo-theft. However, there are several things that companies can do in order to reduce the risk of internal and external theft. Some of the solutions, such as providing proper lighting, do not involve extraordinary time or money commitments. Other solutions, such as checking trucks prior to departure for delivery and after receiving a shipment, to make sure that all inventory that is intended to be shipped leaves the shipper and that all inventory that was shipped arrives at the recipient, can eat up financial and manpower resources. Furthermore, one of the things businesses must keep in mind is that criminals are industrious; while visible crime-deterrents may help prevent the casual or opportunistic criminal from targeting a particular business, they may do little to prevent more organized criminals. In fact, one of the things a company must keep in mind is that it is virtually impossible to prevent…