TODAY’S LOSS PREVENTION

Joshua McAfee C.F.E., C.F.I.

HISTORICAL OVERVIEW

First codification of law – 1800 BC – Hammurabi’s Code

Modern Police Roots – Sir Robert Peel – in 1829 – COP, Crime Prevention first started

1980, Association of Chief of Police, made crime prevention as a standard police function.

CPO – Crime Prevention Officer – a public servant with police powers.

LPO – Loss Prevention Officer – private sector deriving authority from an employer.

LP FOUNDATION TOOLS

Five tools that form the foundation of a Loss Prevention program.

1ST LP TOOL

RISK ANALYSIS – Estimating expected loss from a specific threat – has 3 steps:1. Loss Prevention Survey2. Identifying vulnerabilities3. Determining probability / frequency /

costsProcess leads to the Loss Prevent Profile.

LOSS EVENT PROFILE

LOSS EVENT PROFILE:1. Type of Risk2. Probability of Event3. Criticality of Event

2ND LP TOOL

PLANNING – Results in a design for reaching objectives – must fulfill organizational goals – Respond to:

1. What is cost?2. Is it practical?3. Is it cost effective?4. Will Management support strategy.

3RD LP TOOL

EVAULATION – A critical tool once program is implemented. Ways to do this:

1. Pre test / Post test design2. Experimental / Control Group Design

4TH LP TOOL

RESEARCH – Four basic steps:1. Statement of the problem2. Hypothesis3. Testing4. Conclusion

5TH LP TOOL

STANDARDS – Promotes uniformity; E.G., UL, NFPA, OSHA

CRIME ANALYSIS AND LP

Crime analysis, a systematic approach to studying crime problems, collects, categorizes and disseminates accurate, timely and useful information to line personnel.

Four specific steps of crime analysis:1. Data collection2. Analysis3. Dissemination4. Feedback

LP MANAGER

Lets say something about the LP Manager’s role.

ROLE OF LP MANAGER

Reflects needs/objectives of upper management and needs to :1. Establish Priorities2. Develop Written Polices3. Form integrated management teams

KEY QUESTIONS

Does LP Manager have:1. Upper Management Support2. Adequate Budget3. Appropriate Level of Authority

CRIME PREVENTION

FOUR D’S OF CRIME PREVENTION DETER - criminal attacks DETECT – attacks that occur DELAY – attack to allow time for

response DENY – access to selected targets

ENVIRONMENTAL DESIGN

Environmental design, or physical planning, is an approach to crime prevention in residential and commercial areas by coordinating efforts of architects, loss prevention practitioners, and police.

CPTED

Crime prevention through environmental design (CPTED) advocates that the proper design and effective use of the building environment leads to a reduction in crime and the fear of crime.

CPTED 3 BASIC STRATEGIES

Natural access control Natural surveillance Barriers (Territoriality)

“DEFENSIBLE SPACE”

Written by Oscar Newman Strategies from a New York housing

project. Essence of the concept is that better

residential security can be brought about through environmental and architectural design coordinated with crime prevention methods.

ENVIRONMENTAL SECURITY (E/S) Is an urban planning and design process

which integrates crime prevention with neighborhood design and urban development.

The basic premise of (E/S) – design and redesign of urban environments so that crime opportunities are reduced. It has no effect on white collar crime.

REDUCTION OF CRIME THROUGH (E/S) Increased perpetration time – more

difficult to commit crime Increased detection time – enhanced by

lighting, landscaping, etc. Decreased reporting time – more

observation by many people Decreased police response time

Defensible Space Concept

Territoriality – attitude of maintaining perceived boundaries. Outsider quietly recognized, observed.

Natural Surveillance – ability of inhabitants to casually an continually observe public areas.

Image and Milieu – involve the ability of design to counteract the perception that the area is isolated and vulnerable to crime

Safe Area – high degree of observation by police

RISK MANAGEMENT

Next will will discuss the subject of risk.

CATEGORIES OF RISK

Personal Property Liability

RISK ANALYSIS

First tool is assessing risk. PML – assesses vulnerability and

responses to risk1. Possible maximum loss – if target is totally destroyed or lost.2. Probable maximum loss – is amount of loss a target is mostly likely to sustain

ALE

Annualized Loss Expectancy (ALE) – this formula is used specifically when doing a quantitative risk analysis – such as terminating if another generator should be added to the plan used when computing a return on investment (ROI)

Crime Risk Management

Risk Avoidance Risk Transfer ( Buying Insurance) Risk Abatement (Reduction) Risk Spreading Risk Acceptance (Wish for the best)

INSURANCE RATES

Insurance rates are dependent on two variables:1. Frequency of claims2. Cost of each claim

BONDS

BOND – Legal instrument where one party agrees to indemnify another party if oblige incurs a loss from the person bonded.

Type of Bonds:1. Fidelity Bond – if bonded employee after investigation to limit risk, violates the trust, the insurance indemnifies the employer.2. Surety Bond – Failure to perform as agreed (Contract Bond)

INTERNAL THREATS

Next we will discuss internal threats and losses.

PREVENTION FROM INTERNAL THREATS Internal theft is the greatest on going threat

to business. It is difficult to obtain accurate statistics as

to shrinkage attributable to employee theft. Internal losses occur by several methods:

1. Pilferage – stealing in small quantities over a long period.2. Embezzlement – taking money/property entrusted to their care.3. Shrinkage – loss of inventory through any means.

WHY EMPLOYEES STEAL

Personal Problems Environmental Influences Rationalization

THEFT TRIANGLE

Motivation ( Desire or Need) Rationalization Opportunity

DANGER SIGNS

Counter productive behavior Conspicuous Consumer Financial Irresponsibility Financially squeezed employee

Management Countermeasures Internal Controls / Separation of

responsibility Auditing (Inspect what you expect) Management Support Policy and Procedural Controls Hotline Thorough Investigation Confrontation with employee suspect Prosecution

PHYSICAL COUNTERMEASURES Access control ID systems Lock / Key Controls Alarms CCTV Safes / Vaults

SAFETY

Lets review some LP safety issues.

SAFETY AND LP

Unsafe acts cause 85% of all accidents, unsafe conditions cause the remaining 15%.

Incident – is anything from serious injury to a breakdown in quality control

Accident – is an undesired event resulting in physical harm to a person or damage to property.

ACCEPTABLE WAYS TO REMEDY ACCIDENTS Constant inspections Job safety analysis Early discovery of unsafe conditions Identification of hazards Investigation of all accidents and near

misses as soon as possible

HAZMAT

Hazardous Material Program:1. Identify hazards that are present2. Know how to respond to an incident3. Set up necessary safeguards4. Employee training 5. MSDS (Right to Know Program) in place

PLANNING AND BUDGETS

PLANNING

Planning – designed to fulfill organizational goals / objectives. Can be:

Simple Complex Short term Long term

Budgets

Top/down Bottom/ up

What is a budget – a plan stated in financial terms.

Types of budgets: Line item – each item expressed by line Program – expenses are appropriated for

specific activities / program or project. Capital Budget – infrequently purchased /

high dollar items

A BUDGET REQUIRES …..

A manager to operate the plan in three dimensions:1. The operation /project must unfold as planned.2. The operation / project must take place when planned.3. It will not exceed the planned costs.

BUDGET COSTS

Budget costs are classified under one three categories:1. Salary expenses2. Sundry expenses – all non – salary expenses3. Capital Expenses – which are physical improvements, physical additions or major expenditures for hardware, generally considered one time expenses.

Thank You

I hope you found this LP review helpful. I wish you all the best when you are

taking your exam.