company profile
Target hardening the weakest links - ASDA'S holistic approach to reducing loss and accidents
All retail businesses understand that a chain is only as strong as its weakest link, but few, it would appear, seem to adopt a truly "resource to risk" approach in identifying where that weakest link actually is before committing their investments.
Indeed, most would assume that in terms of shrink, general loss, and dishonesty (both external and internal), the focus has been upon the stores themselves. And resources have followed that hunch with millions of euros spent upon manned guarding, CCTV cameras, EAS tagging, SMART EPOS systems, data mining, and intelligent cash-handling solutions to mitigate threats. They would argue that research including the Retail Fraud survey, the Global Retail Theft Barometer, and the British Retail Consortium's Crime Survey cannot all be wrong. However, if these studies are only measuring losses at store and online levels, it is hard to see what other conclusions they could come up with.
But what if the terms of reference were to be broadened? What if a study were to examine in detail the inherent risks in the wider supply chain? To date, no survey has ever been conducted looking at international supply-chain vulnerability. Yet in a global economy when many of the goods we purchase on a daily basis are coming from overseas, it is hard to understand why we should assume that all of that merchandise is perfectly safe until it reaches the back door of a store or a home, despite the fact that it has moved across continents, oceans, and seen the inside of containers, trains, planes, lorries, hubs, and distribution centres (DCs) before it arrives-or doesn't-if it is an online order.
Focus has recently shifted to threats beyond stores with the ongoing migrant crisis and figures from the Freight Transport Association suggesting millions of euros of unwanted fruit and vegetables are being discarded because of illegal immigrants stowing away in trucks at checkpoints such as Calais and potentially contaminating consignments. But once again, there are no hard figures, merely anecdotal evidence.
However, some retailers are taking a longer view of their broader supply-chain risk strategies. ASDA, part of the giant Walmart family, is now target hardening its entire estate after taking a holistic approach to its losses. In a previous issue of LP Magazine EU, the UK's third biggest supermarket group highlighted how its strategy was to join up departmental thinking so that managing loss became everyone's responsibility, and that included having an almost umbilical link to HR so that its people management became a critical part of its approach to managing risk.
Expanding Their Vision
The supermarket sector has gone through dramatic change in recent years with margin pressure on all the major multi-merchandisers to change formats from big boxes to smaller convenience stores to meet the ever-changing shopping habits of the UK population. Recent research highlighted that as a nation we are no longer indulging in the big monthly shop, but now visiting the supermarket for fewer items more often - up to three times per week - and that at 4 p.m. the average householder does not know what they are having for dinner that evening.
ASDA, like its main rivals, has invested in smaller convenience formats, self-scan technology, and other cost-saving initiatives to deliver value to its customers through lower prices but also to reduce its cost base. Here, technology has played a major part and not least in the asset protection team, which has taken the bold step of almost totally automating its intelligence gathering across its store estate and beyond. This is not just to reduce costs but also to gather more granular information even more quickly and put it to good use in detection and protection, which has the desired effect of reducing both external and internal risk further and cutting losses.
Millions of pounds were spent upon making stores fit for purpose in terms of risk reduction, but the investment did not stop there. ASDA has now dived deeper into its analysis - and its pockets - to target harden its broader supply-chain premises, an eclectic collection of older, legacy warehouses and more contemporary DCs looking after everything from chilled to high-value non-food items, as well as its estate of fuel stations.
The investment has involved tens of thousands of cameras covering every aisle of the warehouse space as well as miles of perimeter fencing, which includes video analytics and even thermal imaging that utilises heat-seeking detection technology to differentiate between would-be intruders and other nocturnal creatures such as badgers, foxes, and hedgehogs whose nighttime adventures are more innocent. The system is intelligent, which means that once it captures images of foxes and rabbits, it learns not to trigger again in identical scenarios. The sheer scale of this investment cannot be underestimated.
At the Doncaster distribution centre (DC) in South Yorkshire, for example, more than 400 cameras have to be up to the task of providing intelligence across more than 600 metres of perimeter fencing, but the business had little choice in order to protect its people, property, and profits. A return on investment is already being seen as the cameras are also targeting accidents for the health and safety team with a view to reducing them.
Andrew Rees, ASDA's senior manager for operational security, said, "Our whole focus is security and safety. We are as committed to reducing accidents as we are preventing burglaries. Having built in the ability to monitor accident and claims data, the CCTV has also helped to validate genuine claims. But also as a result of this approach, we have seen the number of claims drop. And we let our colleagues know about it to support their safety at work. In one of our DCs we saw twenty-five claims in one month, and this dropped dramatically the following the month after the system went live. We put the kit in, and we have seen both accidents and crime come down. And we have got the message out there that these premises are both safe and secure."
The progress has not been achieved in a vacuum but through the close cooperation of the site teams. For Rees, not having the wider visibility was tantamount to what former US Secretary for Defence Donald Rumsfeld described as "known unknowns" when he said, "There are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns - the ones we don't know we don't know."
Rees described it more succinctly, "We simply had to do the same with the warehouse and DC estate and the wider supply chain that we had implemented with the stores. It provides the missing link and will give us overall visibility and greater control."
The end result represents an impressive statistical output across the 800 sites that are now all monitored and coordinated from ASDA's new off-site communications (comms) room close to its Head Office in Leeds, which can zoom in on the 750,000 individual camera and alarm icons across the estate. The result is the visibility and management of all risk issues - from loss to accident management and disruptive flooding, as occurred across the northwest of England last Christmas. This visibility is already prompting a staggering 90,000 alerts every day and has already led to the more efficient focus of manned guarding around the ASDA supply-chain estate, which has saved the business tens of thousands of pounds in the process.
"The thermal cameras looking both ways are mounted on the same poles as the CCTV video analytics to give us total visibility where there was nothing before. Even widespread guarding could not have offered us this solution," said James Bielawski, operational security asset manager. "It has all been phased as when we finished target hardening the stores, we turned our attention to ALS (ASDA Logistics Services). We had to put in our security network, which hangs off one spine and allows us to easily add a new piece of technology to the platform, all of which can be remotely monitored from our 24/7 communications room, which is the nucleus of the offering. All the CCTV technology is future-proofed, and ASDA worked with integration partner CBES, a City FM company, to ensure consistency across the estate."
Defining Priorities and an Action Plan
The focus of ALS began after the stores had been added to the network in 2014. Claire Rushton, ASDA's senior director for operational security, developed the broader team strategy around innovation and proactivity - going after the issue rather than having to react to it when it became too late. "We have to proactively protect the company holistically rather than simply putting all our emphasis upon one element," said Rushton.
A budget was allocated for twenty-eight ALS sites, and Rushton gave Rees and the team the authority to create a bi-spoke risk model, which included profiling the demographic and crime statistics for the area that the warehouse and DC locations are based in. It also interrogated the type of merchandise in the facilities, the age of the buildings, and the existing security infrastructure (whether it has analogue CCTV or digital IP cameras, for example) - all of which allowed ASDA to prioritise its action plan.
"Overall our risk model is very comprehensive and dynamic in line with the elements of crime it reflects. Once our distribution model was built, we included the asset life and quality of current kit to build the rollout plan as in some instances we found thirty-year-old cameras," said Rushton.
The first site was Doncaster, an eight-year-old, 800-square-foot general merchandise facility. The facility was provisioned at the time when ALS did not sit with group security. Today it serves as a strategic centre for the distribution of cigarettes, which obviously places it high on the risk matrix in terms of its potential for burglaries.
A three-day initial audit was carried out, and then an action plan, including new design and implementation, was rolled out. Although the process was the same, there was no off-the-shelf, one-size-fits-all solution. Each site required different approaches depending upon the findings of the risk report.
"One of the principles we wanted to stick to was what we are trying to achieve across the estate, so we implemented the three Ds - deter, detect, and delay. And to achieve this, the approach could be different every time depending upon whether it was a chilled, ambient, general merchandise, or intelligent automated site," said Bielawski. "We looked at what the key risks were and created some operational requirements documentation, which addressed key security requirements such as access control and CCTV, for example.
"The cameras we had in the past were often not pointing in the right directions. Now, as a result of the risk matrix, a standard addition is the inclusion of CCTV at all turnstile entry points, and we segregate colleague area car parks from the main building. We are continually reviewing the risk matrix and adapting our approach accordingly, although our guiding principles remain the same whether they are part of the old estate or new developments coming on stream."
New depots sites, including home shopping centres, were pulled forward because of the risk matrix findings as was Lutterworth, which is part of the 2016 rollout because of the inherent vulnerabilities linked to the fact that it is an intelligent high-bay dynamic-pick site managing large volumes of merchandise every day.
"We have been going down a technological route for consistency, and all can be accessed remotely from the comms room to the sites," said Bielawski.
Supporting the Field
Out-of-hours colleagues also get peace of mind from the comms team observing them remotely during the opening and closing of stores, especially at times when armed robberies in certain areas have been prevalent.
Bielawski continued, "The contact with the colleagues opening and closing times is one of the softer benefits because they feel like there is someone there with them. We can visually verify what is going on if there is an incident, and we can respond immediately by calling the Police. It has won real support. The technology has delivered the right tools and is a key benefit that is complementary to the entire estate from stores to the DCs."
Rees outlined the success they are starting to see from the integration: "We get great intelligence coming back from it, and we can integrate anything with the platform at any time in the future, all of which helps support the guys out in the field. We had a spate of burglaries in West Yorkshire. And working with the National Business Crime Solution (NBCS) to provide intelligence through the system has meant that we have brought the officer response down to three minutes, which is a real achievement and helps foster better relations with law enforcement."
So far a total of three organised gangs have been caught by the comms room team who even have the ability to remotely activate deterrent technology including smoke cloaks. Unlike the criminals, they can see exactly what is going on even though they are often hundreds of miles away.
We wait with baited breath for the first-ever study of the true extent of retail supply-chain vulnerability, but many retailers are neither holding their breath nor sitting on their hands. Instead, they are analysing their own risks in terms of their staff and their stock. ASDA has gone further than many companies in future proofing its security response to the threats posed by the twenty-first century across its entire supply-chain estate. The cost of protecting people, property, and profit does not come as a blank cheque. ASDA's loss protection team has been able to demonstrate a return on investment and show where it has added to the bottom line in reducing accidents and claims and disrupting the activities of organised criminal gangs - and all from one control room in Yorkshire.
