Supply Chain Blog

Working With 3PLP’s in CEE - When did you last see your stock count?

Posted by Dave Jordan on Tue, May 18, 2010
People over a certain age talk about times when they could leave their front doors open or when people found money and took it to a police station. Long-gone days, sadly. Nowadays, if you leave your front door open all you belongings will be stolen plus your dog and the actual door itself. Stock losses will be happening in your warehouse. Repeat; stock loses will be happening in your warehouse.......!

You are never going to stop packets of instant soup walking out of the gate in trouser pockets or drinks in lunchboxes or even the legendary string of sausages hidden under a dapper French beret. Yes, PLP's need to be vigilant and carry out random checks on personnel (and their vehicles) as the bottom line is this is theft and it is costing you money. However, your biggest losses may be leaving your 3PLP by the pallet load.

The troika of Dispatcher, Truck Driver and Security Guard can cost your company huge sums of money.

Ok, so the loading document states 25 FMCG pallets, the driver signed for 25 pallets and the security man "counted" and signed the paper work for 25 pallets so what's the problem? The problem is the warehouse employee loaded 26 pallets, the driver looks forward to his own mobile supermarket and the security man looks forward to a brown envelope of notes at a later date.

Ensure your 3PLP hires a seasoned and professional security company to look after what could be several million Euros of stock. In-house security operations do not work as this makes the troika formation even easier.

Stock counting

Even then the security personnel must be randomly rotated to avoid development of cosy cliques and familiarity. Be suspicious of security people who MUST work the night shift!

You would be amazed at how many major companies still allow high value stock to be shipped around without a robust truck seal protocol. Without a seal the tuck becomes an immediate mobile supermarket for the driver.  Sometimes this will be opportunistic but on a majority of occasions theft is made to order and prearranged meetings take place for removal of your stock. If you do not believe me and you have stock losses then follow a few trucks and see!

The 3PLP must apply a numbered seal to each and every truck and this must be done by a suitably senior and trusted security employee. If that seal is intact when the truck arrives at the destination then there is a fair chance the goods are there. However, beware of the delicately cut and carefully reconnected seal that is whipped off in a second at the delivery point. If you can persuade your customers to witness the seal breakage then you might stop endless the arguments about refunds and credit notes with your Key Accounts. Now, wouldn't that be nice I hear FMCG producers in CEE say!

Next time I will let you know about the role of cycle counting to avoid huge and un-budgeted stock loss values at year end.


Tagss: Logistics Service Provider, Dave Jordan, CEE, Logistics Management, Inventory Management & Stock Control