What Are The Security Risks to Distribution Centers?

Distribution centers are central to multiple businesses to ensure goods are stored, fulfilled, and shipped correctly. Any lapses in security could put this all at risk. 

Leaving yourself vulnerable to this could lead to disaster for you and those who utilize your distribution center, but without knowing the dangers, how can you prepare against them?

We explore the main risks presented to them and share the consequences of such actions that could occur if allowed to happen.

The Importance of Distribution Centers in the Supply Chain

Distribution centers play a vital role in the supply chain of many businesses.

Acting as a hub for the movement of goods, order fulfillment, and inventory management, businesses rely on them to ensure the smooth, efficient processing of goods to their next destination.

Often distribution centers will receive goods from suppliers to store them, then process them, before shipping them to retailers, customers, or other businesses.

Essentially, it’s the last step before any good’s final destination, therefore any neglect or errors could lead to delays and other shipping issues that negatively impact the end customer.

This can create reputational damage, complaints, and order refunds, all of which contribute to financial loss for that business.

What Are The Consequences of Poor Security at a Distribution Center?

Distribution centers support external businesses, with most often storing and distributing multiple businesses’ goods. 

Due to supporting various businesses with order processing and fulfillment, poor security has wider impacts than your distribution center alone. 

Any damage, theft, or criminal activity will likely impact the goods held within your distribution center. From stolen goods to damaged equipment causing processing delays, any security breach can jeopardize the functionality of your center.

However, the functionality is not the only impact of poor security, but also the relationships with the businesses that utilize your distribution center. 

For any business using your distribution center there will be a clear expectation of service and any disruption in this could lead to reputational damage, complaints, legal repercussions, financial loss, and a loss of business from them.

This created both immediate and long-term impact with future business as it will leave feelings of doubt and distrust with existing and potential customers. 

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Top 7 Security Risks to Distribution Centers

The first stage of any security plan is to establish the risks presented to your distribution center. 

This allows you to establish the best form of defense towards the unique challenges you are faced with.

Having offered best-in-class security solutions to multiple industries including distribution centers, LotGuard has a clear understanding of the general threats presented to them.

Using this knowledge, we formed 7 of the top security risks to distribution centers and how to respond to this:

External Theft

With their high-value inventory and vast size, distribution centers are enticing to thieves and organized crime gangs due to the large financial benefits that can be gained.

For distribution centers, the risk of external theft could lead to catastrophe as the goods held by yourself will be of another business, making the need to protect them greater than others.

Any stolen goods could cause substantial financial losses as you will need to resolve the matter for the customer which will create additional fees for you.

However, thieves and OCGs may target equipment also. In these scenarios, your distribution center will likely face operational disruption, slowing down the fulfillment process and efficiency in which goods are shipped. 

This will have a knock-on effect with the businesses utilizing your center and in the worst case lead them to no longer use your company for this.

Vandalism

For some criminals, their target could be to cause as much disruption to you or a business that uses your distribution center as possible. 

This could be due to a dispute, protest, or other purpose which has encouraged them to damage the property or goods as a way of negatively impacting your operations. 

Vandalism can vary from graffiti and property damage to the destruction of goods and vehicle damage. 

As this type of crime ranges heavily, the severity of its impact will depend on the type of crime and the extent in which the criminals go to.

It can be an extremely difficult crime to manage, simply because distribution centers are often large in size, making security a more complex task, especially during the night.

Break-ins

As mentioned, distribution centers span over vast spaces and are likely to be based in more secluded locations. 

Unfortunately, as much as this is beneficial to you logistically speaking, it does also work against you regarding your security. 

Criminals scope for opportunities and unfortunately, your distribution center could be viewed as an easier target compared to others. 

For those looking to break-in a property or building, a large site in a remote location is perfect, especially when there is such high-value involved within it like there is with distribution centers. 

Break-ins place your equipment, any stored goods, and your business’ reputation at risk, all of which you heavily rely on.

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Fires and Arson

Depending on the goods processed by your distribution center, the risk of fires could increase, especially in cases of electrical goods, vehicles, or flammable beauty and skincare products.

Without the correct security monitoring in place, fires can escalate quickly and engulf distribution centers. This will destroy any goods and your business.

Smaller fires can also negatively impact your business by disrupting operation or destroying goods held there. 

Additionally, there is a risk of arson to distribution centers also due to the damage it can create towards your operations. 

Some criminals will simply look to cause damage at any cost and this includes the purposeful creation of a fire. 

Once a fire has started it can be extremely difficult to get under control, especially when it has escalated to a severe level. 

Internal Sabotage

Not all threats are outside of your distribution center, for some it is hidden internally.

Although for any business, you expect employees to be honest and supporting your success, there are some which have ill intentions.

It may be that they are a disgruntled employee or have purposefully taken the role to commit crime against your center, but it is key you remain aware of suspicious behavior from your employees.

From theft and vandalism to cyberattacks, internal employees have easy, open access to commit their illegal activity.

Cargo Theft and Supply Chain Interception

With distribution centers being the hub for various order processing, storing, and shipping processes, goods will regularly be transported to and from it on a daily basis. 

Due to this high traffic, some criminals will seek to take advantage of this and intercept the supply chain for their own gain. 

This type of attack could be to steal goods, pose as employees to access the distribution center, or steal the vehicle. 

Cargo theft and supply chain interception is an increasingly popular crime as criminals can track their movements and assess when is best to attack, lowering the risks for them.

Especially as distribution centers will often sit in remote locations, meaning risk is lowered even further for criminals looking to carry out this crime. 

Workplace Accidents and Incidents

Crime shouldn’t be your only concern as a distribution center as workplace accidents and incidents also pose a large threat towards your business. 

Poor safety standards or non-compliance to workplace policies could lead to various injuries and accidents to take place at work that you may be held liable for. 

Incidents like this, particularly recurring incidents can become costly for you as a business, with further risks of operational disruption and reputational damage.

Don’t Let Your Distribution Center Become One of The Statistics

As the hub of order processing, fulfillment, and shipping, your distribution center cannot face becoming another statistic of crime.

Boosting your site’s security is the best form of defense, however, most will fall at the first hurdle of this. 

Although internal surveillance and access control is important to the protection of your center and any stored goods, most crime starts on the outside of the property. In fact, quite often in your parking lot.

So, why are you not utilizing your parking lot to boost your physical security?

At LotGuard, we found that many businesses across various industries were falling short on security, simply leaving the perimeter of their property and parking lot open to crime. 

With the LotGuard PRO Surveillance Trailer, you can slot our surveillance system into one parking bay of your lot and have expansive security coverage that helps to protect your distribution center as needed. 

Backed by remote monitoring services, it offers a virtual security guard providing 24/7/365 live monitoring that helps to deter, detect, and deal with crime before it reaches your distribution center.

Unlike security guards, our Surveillance Trailers are always awake and always on guard, requiring no power or internet input from you. 

This ensures for those distribution centers based in remote locations that they can receive LotGuard’s surveillance solutions without skimping on quality due to its completely power autonomous design.

To find out how we can support your distribution center’s parking lot security, contact us today!

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