Manufacturing environments most often experience theft of parts and tools, or fraud involving customer and supplier transactions. Processing plants are more likely to experience theft of finished goods or collusion and sweet-hearting. However, there are myriad other risks involved.
Theft and fraud in processing facilities leave more indicators than in manufacturing but are more difficult to isolate. Processing facility losses can be large or small, depending upon the sophistication involved. In manufacturing settings, many thefts are of a personal nature and may be small in comparison to total sales volume.
Both are vulnerable to loss in route to delivery or through diverted shipments incoming.
We observed one series of incidents where several drivers would meet at a relatively isolated coffee shop, open their tailgates and swap items. Some were for personal use while others were for resale.
Parts & tools
In manufacturing shops, tool cribs that are improperly secured experience chronic loss. An employee who appears to be accessing tools or supplies and parts to which he would not normally need access should be monitored closely. Tools out of place possibly indicate theft in progress as an employee stages the items for later removal. Multiple parts where only one is needed, either signed out or simply removed, indicate probable theft. A high level of “faulty” parts may indicate theft or fraud.
High wastage
High levels of wasted materials may indicate carelessness or that the employee is creating a stockpile of materials for his own use.
Slow production rate
Lower rates of production may be more than an overcareful employee, a poorly trained worker or a lazy worker. It may indicate that the employee is working on side jobs.
Attitude
Employees who brag or who present an aura of superiority may also feel they can “beat the system.” These arrogant, “know-it-all” types are more prone to theft and fraud that they feel they can hide better than other employees.
Over-zealousness
One plumber was the typical eager beaver, taking on myriad tasks, seeking new projects from his foreman, reporting other staff regularly for minor violations and typically “sucking up.” He also was stealing everything from washroom supplies to industrial fans.
Employee dislikes supervision and oversight
The employee that appears to guard against supervision of his work or involvement of other staff to assist may be covering deviant behaviours.
Unlocked & unsecured exits
Doors that should be secured with alarms but are not, or doors that are left unlatched may indicate that an employee is using that door to take merchandise out.
Poor yields analysis
Whether in a processing facility or manufacturing plant, conducting yields analysis on an ongoing basis is a strong deterrent to loss. Poorly managed yield logs may indicate an opening for theft.
High supplies consumption
Drill bits, blades and other common consumable supplies should be monitored for excessive use, as many of these items also are of value on home projects.
High trim or wastage
Excessive trim on items like meats or produce may indicate that some items are being stolen via the back door or garbage, or being misrepresented on supplier and sales transactions, providing an opportunity for employee theft and collusion.
Off-hours access
Monitor all comings and goings of staff, suppliers, repairmen and sales staff, as these quiet times enable theft activity and fraudulent work or transactions.
Time management
Time spent on projects and hours worked are some of the most vulnerable and common areas of loss. Note excessive billables on specific client projects, accuracy of work versus time clock records, duplicatable hours for multiple projects run simultaneously and billable versus administrative hours spent.