Improperly managed customer premise equipment (CPE) in a busy cable warehouse provides an excellent opportunity for employees and/or contractors to make some easy money. CPE theft loss can be reduced by well-serialized inventory reconciliations.
However, the real answer to reducing theft is with better management of the warehouse processes themselves. In today’s economic climate it is important that MSOs constantly evaluate their policies and procedures to identify any gaps that allow CPE to escape.
Managing the Cable Warehouse Process
The basic premise of warehouse CPE management is to keep track of what arrives and when it goes out the door. CPE takes many forms including Set-top boxes, cable modems, controllers as well as cabling and connection supplies. In order to manage the process, cable MSOs establish policies and procedures for:
Typical Cable Warehouse Procedures/Policies
- CPE arrival from manufacturer
- CPE loading and testing (loading is when they install the channel guides and any other software necessary to use the CPE)
- CPE Issuing
- CPE Returns
- CPE repair and testing
- CPE exiting the warehouse
- CPE returned to the warehouse
- CPE being returned to the manufacturer or discarded
To manage these policies and procedures cable warehouse typically scan the bar codes from either entire containers or individual units to record the counts of each. Basic follow-up and reconciliations allow management to compare what should be in each location from one point in time to the next.
How the CPE Theft Occurs
As previously stated, theft is usually identified when reconciliations are performed. In between the time CPE inventory arrives and the CPE reconciliation is when employee or contractor theft occurs. Once the theft has occurred, the financial loss is generally not recovered as the CPE is long gone. In addition, unless you can catch the thief in the act, it may not be possible to immediately remove the threat.
Typical CPE Theft Scenarios
- CPE is not scanned upon arrival and therefore unaccounted for.
- CPE is scanned as being shipped but it never arrives.
- CPE is scanned as being in-house but has disappeared with a contractor (warehouse employee and contractor).
- CPE is marked as being beyond repair when it is actually good.
- Sales people acting as installers creating fictitious sales.
- Performing reconciliations using a manual counts method versus a serialized reconciliation.
Employee theft is almost always a result of opportunity. The opportunity arises when there is either a lack of supervision or controls. Should an employee and/or a contractor steal, a warehouse can suffer substantial losses as well as run the risk of being short CPE to meet customer needs or special promotions.
Reducing CPE Through Better Processes
The keys in reducing CPE loss revolve around closing up the gaps between inventory counts and reducing the ability of any one person to manipulate the inventory and billing systems. Some of the process controls successful Cable MSOs have put in place include:
- Not allowing the person who does the scanning to update the billing system.
- Assign each warehouse employee their own handheld device. This prevents an employee from making changes under someone else’s login.
- Limit security access on each handheld device down to the fields they are allowed to enter information in on.
- Supervisor sign offs on bad or unrepairable CPE.
- Reduce the amount time between serialized reconciliations.
- Establish spot checks or a cycle count process.
Combining Technology and Processes
The reality is trying to track CPE movement through a warehouse manually will only slow CPE movement down to unrealistic productivity levels. Add to this the amount of errors inherent in manually transcribing numbers from one form to the next or to the billing system, it becomes obvious that management cannot be sure if CPE is stolen or lost.
The solution is the use of software and mobile handheld devices that can track inventory movement from arrival through its destination. Cable warehouse management software like WinTrack SETS® and EIS can then use technology to speed up the warehouse processes as well as provide tighter controls for recording and accessing data.
Finally, the old fashioned manual counts system for inventory is replaced by serialized reconciliations using bar codes. This cable warehouse management feature allows for reconciliations to be performed more often and far more accurately. Should a theft occur, warehouse management can minimize the loss by catching it quickly.
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