• Loss Prevention Strategy

    Over the weekend I had lunch with a renown loss prevention strategy expert who discussed a low productivity case he worked on. It turned out that it was due to the length of breaks taken by the smokers and the non smokers felt entitled that they should also take a little longer on their breaks as well. Over time this lead to a loss of profit and productivity that was truly astounding. When he told the company the results of the study they felt embarrassed that they could have easily handled the study internally, and even more embarrassed that it was their fault for not enforcing the break policy. He told them that hiring an outsider was the best course of action due to one thing: Retribution. If a member of the company performed the study that lead to individuals being reprimanded for taking extended breaks, they would be the target of retribution.

    My friend makes a good point. I know a company that offers very nice reward for reporting merchandise theft in their warehouse and yet when a theft was discovered recently, no one came forward. I wondered why at the time and then after hearing my friends story, it started to make sense. In a business, there are various cultures and ecosystems within that business that have their own set of unspoken rules and social norms. In this particular company you have executives, office staff, and warehouse staff. You can break it down even further by departments in those areas and you will find each have their own social norms and unspoken rules. One rule seems to be consistent across those ecosystems though, no one wants to be singled out as the whistleblower, the snitch, the narc, or the tattle tale due to fear of retribution. That fact alone is why it’s good bring in an outside source to investigate loss prevention issues. A private investigator is an unbiased outsider that can get you that facts without fear of retribution.

    Relying on a reward system isn’t the only thing you should have though, even though the company had a DVR system with cameras throughout their warehouse the thief still wasn’t caught. They had to try and go through a month’s worth of video footage and the cost in manpower hours soon exceeded the cost of the merchandise stolen. Situations like this can be prevented by establishing a routine to check your warehouse inventory. For example at closing time have someone do a visual once over the inventory for theft and tampering, and again the next morning when the business opens. This procedure should be performed by two different people and when theft or tampering is discovered, you have a log and can establish a timeline of your video to go back check which should be a significantly less than 30 days.