FINaL Word
Dealing with stealing
and corruption in your
warehouses By Calipe Chong
n my experience, stealing and corruption is a bigger problem in foreign companies as compared to local ones, often because foreign
I
companies have not changed their human resource and management policies to suit the Chinese environment. In local enterprises,
it is common to find purchasing and financial managers who self scrutinize the purchasing process, receipts, employee travel and all
other expenses like a hawk. Often, expatriate managers leave this work to trusted employees, giving excuses like “Dealing with this is
too much work,” “I could not do it, “or “I did not understand the process.” However, lax control will make expatriate managers lose
money at the end of the day.
Many Chinese workers and staff are honest. The problem is that not all of them are so. When you have one worker stealing from the com-
pany with ease, others will follow. While I do not condone installing window grilles, which turn dormitories into death traps, companies must
take extreme, perhaps anal retentive measures in order to prevent large losses on money and inventory.
Protecting your Warehouses on items randomly selected by our
Frequent physical inventory (PI) computer system. Even with all these
count is not sufficient to counter measures, I still had 1% of inventory
theft. The count is either surprisingly unaccountable for in the quarterly and
“correct” or the results have such annual PI.
wide variances that a company writes
them off as an error. Tough Love
I learned about conspiracy deals be- Avoiding theft in your warehouses
tween buyers and storekeepers in my means you have to abide by one im-
early years in China. My buyer would portant rule: never give the same per-
release a purchasing order (PO) to a son the opportunity to control and
supplier and the quantity delivered manage inventory at the same time.
ended up being far less than quantity Showing your interest and willingness
printed on the delivery order (DO). to check on details in order to prevent
In reaction, I began running ad hoc fraud will help warn off any employee
inspections for incoming goods. I who is tempted to cheat.
had a policy among all my managers
and supervisors, including myself, However, if an employee is caught
that if we passed by the in-coming cheating, managers cannot show re-
staging area, we would randomly pick an item to count. If there was luctance in terminating them, even if the employee is a star performer
a variance on the physical count with the DO, the storekeeper bet- or a key contributor. Ignoring the evidence or handing out a repri-
ter be able to explain. All measuring scales in the warehouse were mand is detrimental. Once leniency is showed, it will be very difficult
periodically calibrated and the casings were sealed in order to prevent to take action on other employees found committing similar crimes.
tempering. I also held the warehouse manager fully responsible for Punishment must be fair and apply to all
the upkeep of the scales. I also often stood on the weighing scale in personnel; otherwise the command and
the receiving area to check my body weight. This was not because I control of the company will tumble.
was on a diet, but actually ensured that the work scales were kept ac-
curate to my bathroom scale at home. This also acted as a signal to Calipe Chong is the Managing Director
my storekeepers that I was watching the scale and that they had better
of vIPO Asia (http://www.vipoasia.com)
providing supply chain and management
not temper with it. services. He has 30 years of experience
As for the production line, all moving materials, except C items, had
with US companies in Asia, focused on
engineering, operations and supply chain
to be accounted for between shift changes. We also had weekly PI management.
62 JANUARY/FEBRUARY 2010 www.chainaonline.com
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