The Future of Safety Enhancement and Shrink Mitigation

The Benefits of Advanced Personnel Screening Technologies in the

Retail Distribution Markets

WHITE PAPER

July 2015

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ISCON Imaging, Inc. is a manufacturer of patented infrared (IR) screening solutions designed to help retailers, distribution centers and warehouses prevent workplace violence and reduce merchandise theft.

The potential of merchandise loss and workplace violence drives many large retailers and distribution centers to seek new technology solutions to mitigate these risks. Many organizations currently operate with no screening technology, choosing instead to leverage video surveillance to assist with monitoring and investigative purposes. Others may incorporate screening solutions but often deploy antiquated, walk-through metal detectors. Both of these solutions cannot effectively prevent theft or ensure workplace safety.

In addition to the risks outlined above, there are human resource, liability and legal challenges involved with preventing loss and violence. Many issues stem from privacy concerns, the legal implications of pat downs and inaccurate information provided to employees.

Executive Summary

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There has been very little innovation in screening technology since the flurry of development after the 9/11 attacks. Most of what has been introduced was targeted toward aviation security and a majority of this is not suitable for broader commercial screening due to the issues mentioned above including privacy, health and the need for “pat downs.”

ISCON screening solutions are developed specifically for commercial screening applications and are purpose-built for the dynamic security requirements of retailers, warehouses and distribution centers, maximizing workplace safety and loss prevention strategies. ISCON’s patented technologies strengthen the scanning process, increasing throughput, eliminating privacy and radiation concerns, and enhancing safety initiatives. Its SecureScan and FocusScan scanning solutions detect both metallic and nonmetallic objects hidden beneath clothing, giving users unprecedented insight into information that can protect physical assets and employees.

With hundreds of distribution centers and retail warehouses in the United States alone, an a rise in employee violence and shrink, the need for a solution to secure these facilities is paramount.

A Rise in Innovation

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Today’s global environments is filled with increasingly dangerous and violent threats. Whether it is foreign or domestic terrorism, crime or workplace violence, incidents are on the rise. Active shooter incidents continue to be a significant problem for a wide variety of organizations. The FBI reported that between 2000 and 2013, there were 160 active shooter incidents, resulting in 468 deaths. In the United States alone there are 2 million victims of workplace violence annually, resulting in an average of two deaths and 87 injuries per day, according to the U.S. Bureau of Labor Statistics.

Another challenge is controlling theft, both external and internal. Shrink, losses resulting from theft, and loss prevention, theft mitigation in retail, are common terms when discussing internal and external theft. According to the recent Global Retail Theft Barometer, worldwide retail shrinkage accounted for $119 billion in 2014. Losses in the United States alone were $42 billion. Of that, almost 43 percent of shrink was attributed to employee theft.

While controlling loss, organizations must provide a safe workplace environment for its employees. This is especially the case in distribution centers and warehouses that employ hundreds or thousands of employees, often at low wage levels, that come from a wide variety of ethnic, racial and religious backgrounds.

Threat Landscape

Many warehouses are more than one million square feet in size and house up to $100 million in merchandise, which ranges from clothing and electronics to handbags and pharmaceuticals.

With so much attributed to loss developing a comprehensive security strategy and identifying technology that can effectively detect merchandise theft has proved challenging. In addition, there are additional HR-related challenges including:

• How to avoid the need to “pat down” an individual to identify concealeditems. • How to screen a large and diverse employee population in a fair andunbiased way.• How to establish strong “probable cause” of a theft or threat situationbefore initiating additional security measures.• How to detect the potential loss of materials and merchandise.• How to establish robust protocols to handle theft incidents and, moreimportantly, potential workplace violence incidents.• How to detect, but not alert, when a weapon or contraband is beingbrought into the facility to allow silent initiation of pre-emptive security procedures to contain the threat.• How to balance maintaining an employee friendly environment whileproviding a safe work place and protecting assets.

In 2012, 41% of retail shrink was attributed to employee theft.

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It is important to address fraud and safety issues clearly and proactively. If not, a company may be at risk for profiling and discrimination claims, as well as an unproductive and negative workplace culture. Many forward-thinking organizations aggressively seek technologies and expertise to address these issues head on. In fact, global spending on LP activities is currently $28.3 billion annually. Spending on security equipment alone accounts for $8.76 billion.

The retail distribution industry is also growing, primarily due to the exploding increase in online commerce. In the United States, employment in distribution centers grew from 119,493 to 595,325 from 1998 to 2006 — an annual growth rate of 22 percent. During that time the number of distribution centers grew by almost 10 percent per year. Almost all large retail companies such as Walmart, Amazon, Office Depot and AutoZone have many distributions centers across the country and globally, handling large volumes of merchandise.

Major retail distribution companies employ visual inspection to identify potential threats and theft. This involves stationing security personnel at entrances and exits, and visually looking for “bumps and lumps” on an employee’s clothing.

The downsides to this method include:

• An item must be noticeably protruding to bedetected.• No ability to detect what the item is.• No solid probable cause for further investigation.• High risk of profiling or discrimination claims due toarbitrary nature of inspection. • If an individual has a weapon, they may opt to actimmediately if confronted, eliminating the opportunity to initiate pre-emptive security measures.

Screening Methods

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The archway metal detector (shown) is the only personnel screening detection technology currently used on a widespread basis. These units are priced from $5,000 to $8,000, and are simple to deploy.

These portals can screen one employee in less than five seconds except when the system sounds an alarm. Then it can take several minutes for personnel to determine whether the person is approved to enter or should be detained for further investigation. The clearing process is often carried out with a hand wand (illustrated).

The drawbacks of archway metal detectors for the retail distribution market include:

• They can only detect metal, and only above a certain sizeand restricted composition.• They provide a light bar and/or audible alarm only. Do notdetermine what has been detected.• The audible alarm alerts an officer that something hasbeen detected. This public notification is a concern with the detection of weapons or contraband.• They routinely pick up benign items like buttons andzippers, for example. These false positives significantly slow the screening process.• Require a lengthy and potentially confrontational clearingprotocol if an alarm sounds.• Clear identification of the alarm cause is impossiblewithout voluntary removal of item.

Walk-Through Metal Detectors

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Millimeter wave scanner (an example, the L3 ProVision is shown) are widely used for aviation security where “pat downs” are an accepted part of protocol. These devices are not currently being used in the retail distribution market.

The millimeter wave technology uses microwaves to create a high-resolution image of the surface of a person’s body. Privacy was a major concern when these screeners were first widely deployed by the Transportation Security Administration (TSA). After criticism from the public, the screening platforms were modified — they now display an avatar of the person and the item detected.

There are a number of drawbacks to using millimeter wave technology in distribution centers:

• A millimeter-wave scanner has a large footprint and is complex to deploy.• The average price is between $120,000 and $180,000.• The only visual of the item detected is the yellow square as shown above. The operator cannot tell what it is.• Scanning time is fast (approximately 5 seconds) but similar to the metal detector the time to clear an alarm can take several minutes.• A picture of the individual’s body is generated and stored by the system, even if it is suppressed. Some models allow this image to be viewed by security personnel.• Clearing of the alarm cause is impossible without voluntary item removal.

Millimeter �Wave Scanner

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ISCON Imaging pioneers a new breed of screening solutions that drive new levels of operational and workplace safety, and LP in warehouses, distribution centers and large retail sites. Its SecureScan™ and FocusScan™ scanning solutions provide LP managers, safety leaders and operations managers with cost-effective options to reduce the risk for active shooters while limiting the potential for theft.

ISCON body screeners deliver whole-body scans that allow retailers or warehouse security personnel to scan an individual, and detect stolen inventory or weapons by seeing their likeness on a high-quality touch screen. These images are recorded and available for later auditing with a date and time stamp. The patented thermo-conductive IR technology first heats the screening subject, then assesses the cooling patterns of any object that may be hidden underneath an article of clothing to be able to identify it by its light structure. This technology does not use any artificial radiation of any kind, and does not violate the subject’s privacy since long-wave infrared (LWIR) does not pass through clothing.

ISCON technologies incorporate a low velocity heated airflow, which disrupts the thermal equilibrium achieved when items are concealed for long periods of time. This innovative approach enhances the visual image of a thermal imprint on the surface of clothing. Any item underneath — no matter what material it is made from — will starkly contrast with the surrounding area.

What makes ISCON technologies different and unique? Here is a closer look at the process that takes place:

1. Low-velocity air gently warms a person’s clothing and any object concealed underneath.2. When the warm air stops, the person’s clothing and any concealed items cool down. Clothing over concealedobjects cools at a different rate, producing strong temperature contrast.3. A temperature-sensitive IR camera captures images of the entire area and reveals the contrast of any object hiddenunder clothing.

Advanced Imaging Technology ISCON Imaging Infrared Screener

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1. Cooler objects under clothing are clearlyvisible with an IR camera due to temperature differences between the object and clothing.

2. If the object stays under clothing for anex�tended time, its temperatures equal and can no longer be easily detected by the IR camera.

ISCON: Imaging Sequence

3. When the thermal balance is disrupted,temperatures of the object and clothing differ due to heat transfer properties, allowing the object to become visible to the IR camera.

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Unlike other personnel screening technologies such as those used in the transportation industry. ISCON delivers three key features to retail, warehouse and distribution companies that no competing technology offers:

• ISCON presents no adverse health effects such as radiation.• ISCON technology cannot “see” through clothing and therefore, there are no privacy concerns.• ISCON is the only technology available today that can actually display a high-resolution image of the item detected onthe person.

The ISCON Difference

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Because the ISCON (IR) technology reliably identifies temperature contrast, it is able to detect a wide variety of materials including:

• Hard goods• Soft goods• Pharmaceuticals• Weapons (metallic and non-metallic)• Contraband• Data storage• Electronics• Glass

ISCON’s patented solutions strengthen the scanning process, increasing throughput, eliminating privacy and radiation concerns, and enhancing safety initiatives. The technology is available in two unique and distinct platforms, SecureScan and FocusScan. Both form factors identify metallic and nonmetallic objects hidden beneath clothing, giving users unprecedented insight into information that can protect physical assets and employees.

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SecureScanThe SecureScan is a whole-body scanner that captures a four-sided view of a person at approximately 15 seconds per side. The solution displays a high-resolution image from an advanced IR camera on an intuitive touchscreen interface, which controls all system administration and management. It simplifies the user and operator eperience with easy-to-read electronic indicators. The image is similar to a traditional photo negative, allowing it to be easily viewed and evaluated.

SecureScan records images securely, adding time and date stamps for use in future investigations. In addition, the image can be tagged with an individual employee’s identification card. Images can be uploaded or downloaded for storage on a company’s IT infrastructure.

If an incident is escalated or an investigation confirms theft, for eample, the stored image can be downloaded for use in prosecution. If a weapon or contraband is detected, the employee will have no knowledge of the discovery because there is no audible or visual alarm. This strategy provides significant benefit because it allows security personnel to silently implement escalation procedures such as plant-wide notification or locdown.

SecureScan is primarily used at entrances and exits to screen employees, visitors and vendors coming into and leaving the facility. It can also be used as a secondary screening technique to clear alarms generated by faster but much less effective high-volume technologies.

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FocusScanThe FocusScan handheld imager is designed for targeted personnel scanning. FocusScan is the first-ever IR-based handheld imaging technology purpose-built for use in loss prevention, security enhancement and asset protection. It allows for targeted screening of specific areas of an individual.

FocusScan is fully portable and can also be used for random, remote security screening in high-rise areas.

Like SecureScan, it provides a high-resolution image that can be recorded, time and date stamped, and downloaded for forensic needs. FocusScan incorporates a metal detector at its tip for rapidly locating and clearing items alarmed by an archway metal detector, as well as a proimity sensor that protects privacy by limiting range and target zones.

isconimaging.comLearn more about screening solutions from ISCON: