Cover Your Assets
DVRs can play a role in controlling loss in a variety of industries
- By Bob McCarthy
- Nov 01, 2006
THE cost of lost assets to companies has been demonstrated in many studies to be significant. The application of DVR technology has been proven to reduce this type of loss in a cost-effective manner.
Asset theft and damage begins as a risk to manufacturers, distributors and shipping companies. Companies can expect to see a portion of the goods damaged or stolen when moved from the raw materials vendor, to the manufacturing site, to distribution centers and finally to retail outlets.
Asset theft and damage begins as a risk to manufacturers, distributors and shipping companies. Companies can expect to see a portion of the goods damaged or stolen when moved from the raw materials vendor, to the manufacturing site, to distribution centers and finally to retail outlets. |
In addition to finished goods, manufacturers must protect raw inputs, which can be high value. Whether these assets are hard drives for DVRs or copper coils for air conditioners, manufacturers must guard assets against burglaries and employee theft. An integrated combination of DVRs, burglar alarms and access control systems act together as an effective deterrent and a tool to identify and prosecute offenders.
After manufacturing, products are shipped by various methods to customers or channel partners. The success of intermediate warehouses and cargo storage facilities is based on the ability to provide clients with an environment that is both safe from the elements and secure from damage or theft.
Securing Cargo
A major U.S. cargo handling service is the custodian of freight that comes through warehouses until it leaves. The handler must consistently prove its capability to keep freight secure to protect its integrity as a freight handler.
Staff monitors multi-city sites on a 24/7 basis using Dedicated Micros' DVRs and network viewers. The system is used for theft deterrence, resolution of insurance disputes and as a marketing tool to show operations to prospective customers.
For assets in transit between manufacturers, distributors and retailers, even shipping vehicles can benefit from mobile DVR surveillance. The DVRs can embed GPS data in the video and trigger alarms when the vehicles stray from scheduled routes due to truck hijackings. Some even have a built-in inertia sensor that can mark when the vehicle stops or swerves suddenly, potentially causing damage to goods.
At the retail store level, several studies have shown that inventory losses have a significant impact on corporate profitability.
Retail Shrinkage
In the U.S. retail industry alone, an estimated $37.4 billion is lost to shrinkage each year according to the 2005 National Retail Security survey conducted by the Security Research Project at the University of Florida. Forty-seven percent of the loss is attributed to employee theft, far outweighing the cost of shoplifting (33 percent) to retailers. The total loss equates to an average of 1.59 percent of sales across all retailers, but this percentage is significantly higher in certain segments of the market such as supermarkets (2.38 percent).
According to the 17th Annual Retail Theft survey conducted by Jack L. Hayes International, only 2.74 percent of retail theft losses were recovered in 2004.
The emergence of organized retail theft has increased the risk to assets in a broad range of industries. Criminals are targeting high-value assets from manufacturers, transporters, distributors and retailers.
According to the 2005 National Retail Theft survey, the average loss attributed to each non-employee, shoplifting theft incident has risen from $265.40 in 2003 to $802.83 in 2005. It is believed organized retail theft is at least partly responsible for the increase because of the high value of assets lost in ORT-related incidents.
DVR systems have become an invaluable tool in many organizations' efforts to improve the bottom line by reducing asset losses. Depending on the business, the largest threat of loss may come from employee fraud, product theft or damage/vandalism to vehicles and other assets used to conduct business.
IP-enabled DVRs allow businesses to deploy sophisticated asset protection measures with minimal investment and complexity. When integrated with other asset management systems, DVRs can reduce the level of asset theft and/or damage. The payback period on DVR-based, asset management investments can be short for companies currently operating with minimal protection.
A growing trend is to use networked DVRs to monitor assets and investigate incidents remotely from a centralized loss prevention/asset protection facility. The approach allows for immediate access to live video or incident footage without the expense or delay of traveling to the scene of the incident.
Integrated Improvements
Simple monitoring of assets with DVRs will deter theft and help prosecute thieves, but the full benefit is gained when DVRs are integrated with point-of-sale, loss prevention, access control and other systems and sensors. Since the days of VCR surveillance systems, it has been recognized that the integration of POS systems with video is an effective way to discourage cashier theft and to identify problem employees. Modern DVRs can offer much more automation when integrated directly with POS systems than using the technique of overlaying transaction data from the receipt printer onto a VCR's video.
DVRs can now be triggered by suspicious transactions ("void," "no sale," "refund," etc.). The units also can use motion or other sensors to increase record rate to reposition a PTZ camera onto a specific area or to notify a centralized monitoring center of the incident in real-time. Just as importantly, the video associated with the incidents can be rapidly found in follow-up investigations when required.
Certain retail verticals have specific applications. Gas stations monitor for drive-offs (obtaining a clear shot of the license plate). Car dealerships monitor vulnerable fleets of new vehicles to discourage and record incidents of vandalism.
Some companies also use DVRs to reduce asset damage by monitoring adherence to operational procedures.
Reduction of theft by DVR-based asset protection systems, combined with visible cameras, has three primary components.
Containing Cash
Many other industries are now taking advantage of IP-enabled DVRs to reduce asset losses and improve financial performance.
A banking institution's whose main asset is cash and its use of DVRs is to combat robberies and prevent customer fraud. Many banks use hybrid DVRs -- those that can accept both analog and IP cameras -- with high-resolution IP cameras to replace the old 35 millimeter, analog film cameras that watch doorways and teller lines. These megapixel, IP cameras allow investigators to digitally zoom in on recorded video to increase the likelihood of identifying suspects.
Banks also use DVRs to capture video of ATM and teller-line transactions in order to capture fraudulent transactions. As this transaction video is typically saved for 90 or more days, it is critical that the DVR embed the transaction data within the video so disputed transactions can be quickly found. Specialty interface equipment is required to intercept transaction data from the many ATMs that still use legacy, bi-sync communications linked to bank mainframes.
Monitoring Infrastructure
Utilities make extensive use of DVRs to monitor assets. For these companies, the main assets is the infrastructure, as the loss of assets results in both replacement costs and lost service revenues. IP-enabled DVRs allow utility operators to view key facilities in the electrical, gas, water, telephone or other networks remotely and instantly after sensors detect problems.
The risks to utility assets are more likely vandalism- or weather-related (flooding, lightning, high winds, high temperatures), rather than theft. But remote video monitors integrated with the proper sensors can reduce asset damage by allowing rapid assessment and resolution of the problem.
Many applications require real-time notification of asset problems while others are simply collecting information for use in investigations and/or trend analysis.
Not all DVRs are well-suited for asset management applications, and each organization considering a DVR deployment will have a unique set of asset management requirements. In general, users should look for a DVR solution that addresses the most common asset management requirements along with flexible configuration and integration capabilities.
A Feature Combination
The asset management features to look for today include some of the time-tested basics and some new application-specific capabilities.
For integration with POS and ATM transactions, the DVR must be able to embed data in video images. The technology can include RFID tags, bar codes, GPS or weight scale data that is time-stamped and associated with one or more video cameras.
The DVR should have a flexible set of alarm triggers that includes video motion detection, transaction text keyword matches and physical alarm inputs.
When alarms are triggered, the DVR should offer a flexible set of reactions to include increased record rates, increased resolution and reduced compression (for higher quality) on the individual cameras associated with the alarm.
DVRs with a software development kit allow the vendor or approved partners to develop custom software integrations with sales and inventory systems, providing an open architecture solution for customers.
While many legacy asset management systems require a direct, physical connection for integration, newer systems require communication over TCP/IP, with IP-enabled DVRs. Look for a manufacturer that offers integrations with the most popular POS systems and resources to add custom solutions quickly.
The effort required to manage and maintain DVR systems varies widely among vendors, so this aspect of the system should be evaluated carefully. A centralized management tool should be available for viewing permission assignments, software upgrades and DVR configurations backup and restoration across the entire security network.
Use of an embedded operating system instead of a PC-based DVR will reduce maintenance costs by removing the need to install monthly operating system patches. The vendor also should offer a health monitor for automated, proactive notification of maintenance or repair requirements.
Lastly, hold out for a DVR that offers easy identification, extraction and presentation of video evidence. Since the video of theft or damage to assets will be needed for investigations, it is imperative that the DVR provide search tools to easily find incident video for investigations.
The DVR also should provide an easy method of creating auto-run evidence CDs (or DVDs), and proven methods must be employed to demonstrate there has been no tampering of the video on the evidence CDs since extraction from the DVR.
From commercial goods to utility infrastructures, the assets of modern businesses can benefit from increased protection and decreased losses by the implementation of an effective, DVR-based security system. The most effective implementations will be integrated with other asset management/protection systems and will have purpose-designed application software to provide effective and intuitive operation of the system.
This article originally appeared in the November 2006 issue of Security Products, pgs. 36-40.