Technology, Shrinkage & Rude Ralph

To get through graduate school, I worked retail as a department manager at the Harvard Coop, a small department store with five locations, where I saw management puzzling over a particular delivery driver, call him Ralph, who was rude and always rushing around like a UPS guy on speed. Yet Ralph wasn't particularly productive. One day I saw the number two guy at the Coop, clipboard in hand, riding Ralph's route with him, and I realized management suspected Ralph of wrongdoings greater than rudeness.

Just two years later I was back in Boston, this time to teach at the business school, and one day as I walked down Mass Ave for lunch, I heard a familiar sound behind me - a certain vehicle braking abruptly to a stop. I turned around. Sure enough, Ralph. Double parking. Then rushing to the rear of the Coop truck, throwing open the doors, grabbing a couple of bulging shopping bags, walking quickly to the rear of a car parked on the street, popping the trunk, inserting the bags, then driving off at maybe 20 over the limit.

Today's technology could catch Ralph when, evidently, management wasn't able to nail him back then. Consider. First, surveillance cameras. Today, surveillance cameras at the store loading docks and on the vehicles could record everything Ralph put in - and took out of - that truck, including those bags. Today, surveillance video is digital, making searches fast and easy and record times longer.

According to Bill Gaither, General Manager of Accura Systems of Tucson, "The most common use of video cameras is to reduce shrinkage [theft] - from outside, or inside, the organization." Video cameras do have limited focus areas, so having too few cameras can leave a business with less-than-clear images. Then, too, Gaither has seen video in which the thieves wore masks. In one case, the masked thief was stealing the video camera!

Security technology goes way beyond video, of course. Other common tools are access badges, panic buttons, money clip alarms and security alarms. Access badges restrict access to one or more areas on a building. Panic buttons silently call 911. Money clip alarms attach to the last $20 bill in the drawer, which cashiers are told not to remove. In a robbery, the robber is gladly given all the $20's. When that last bill is yanked out of the drawer, the clip activates a silent "robbery in progress" call.

Security systems are surprisingly versatile, too. Supervised opens and closes record the exact time at which a given employee - or vendor - turned the system off, or on. So the system report exactly how long the cleaning crew was in the office, or whether the business really had Mary Smith in by 7:55 AM. Sophisticated systems can even be set to send you an email when the system is turned on, or off, or turn on the video cameras the instant the alarm is set off, saving Gigabytes of video hard drive space.

Of course people must support the technology. In Tucson, the police will not necessarily answer a call when a security system alarm is set off. At least two security companies in Tucson can be paid to send one of their patrolling security guards to a site immediately if an alarm is triggered. That response can make a police visit guaranteed if criminal activity is underway, or unnecessary if the alarm is false. Business owners who don't like being woken up in the middle of the night over a false alarm often pay for this option.

Lastly, delivery vehicles (remember Ralph?) can be outfitted with a GPS (global positioning satellite) device that reports to the business owner, via a password-protected Website, amazing details about each vehicle's travels. Discreet Wireless sells a system that Sparkle Cleaners in Tucson uses. Heath Bolin, president of Sparkle Cleaners, says, "one of the largest liabilities a business owner can have are its drivers out in company vehicles."

Discreet Wireless's GPS system reports a vehicle's current location, maximum speed, time between stops, location and length of each stop, and (depending on configuration) the exact route (a bread crumb trail) the driver took. Really. The reports are easy to generate and beat the heck out of grabbing a clip board and riding with a driver.

Thinking back, clearly Ralph parked his car on Mass Ave to save time because Mass Ave was on the route between stores. So Discreet Wireless's system would not have shown Ralph off course or stopping long enough on Mass Ave to raise suspicions. But Ralph would've been caught speeding.

Back then, I shook my head and reflected that it was easier to teach about shrinkage than actually stop it. Today, a video camera on the truck - or probably just cameras at each loading dock - would nail Ralph. After all, his only mask was one of rushing and rudeness. Cameras would have seen right through that. Instead, Ralph appears on candid camera only in this column.

This article first appeared as a column written by Dave Tedlock, NetOutcomes' president, for Tucson Business Edge, a monthly magazine published by the daily newspaper, the Tucson Citizen.

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