How to calculate safety?

How to calculate safety?.

How to calculate safety?

It is no secret that security in trade is a more comprehensive concept than security in many other areas of business. And this capacity lies not only in the increased list of tasks facing the security services of retail enterprises, but also in the additional and inevitable costs of its technical equipment. How to determine the feasibility of spending on technical equipment for security? This problem arises for everyone who is engaged in or has decided to engage in the trade business. And it is good if this question is raised at the stage of organizing the business, and the design of retail and auxiliary areas is already taking into account the installation of technical means of security and control. After all, it is always cheaper to do than to redo.

The design of such systems as video surveillance, ACS (access control and delimitation systems), anti-theft equipment, should be carried out taking into account the distribution of premises by security zones and be coordinated with the placement of commercial equipment. The zoning itself, as well as the location of commercial equipment, should take into account the capabilities of the necessary technical security equipment. But even if the trading enterprise is already functioning, the question of the feasibility of costs is no less, and sometimes even more acute.

So how do you determine the feasibility of installing this or that equipment? The most important criterion in determining this feasibility is the payback period of the installed technical security equipment. TBB specialists have developed a methodology that allows any manager of a trading enterprise or a security specialist to determine the payback period of all technical security equipment as a whole, as well as its individual components. The calculations for determining the payback period are based on two main indicators: the cost of the installed technical security equipment and the enterprise's losses from theft and damage to goods and property. All percentages used in the calculations are obtained by processing statistical data
for the categories under consideration. Percentage loss indicators are average indicators of possible losses incurred
as a result of various threats to the turnover of a trading enterprise. And percentage indicators of the effectiveness of various technical security systems determine the average values ​​​​of the reduction in losses from the occurrence of various threats.

As an example, the enterprise's losses for the year will be determined at $35,000.

To calculate the payback of various systems installed in the sales area, in the administrative and warehouse areas, the enterprise's losses must be distributed among these areas. The percentage distribution ratio is given in Table 1. Now let's calculate these losses in these areas. For our example, losses from orders, warehousing, transportation and unloading are 45% of $35,000, or $15,750 per year, and losses from the sales area are 55% of $35,000, or $19,250. By the way, if the enterprise has not kept records or you are just opening a retail outlet and, accordingly, there is no data on losses, then the average losses can be calculated using Table 2.

It is necessary to take into account that the average losses should be calculated by you as a percentage of the actual or planned turnover corresponding to the area of ​​your sales area.

For example, let's assume that the sales area of ​​our supermarket is 5,000 m2, and the annual turnover is $10 million. According to the table, the average percentage for this example will be 0.35, or the annual losses will be $35,000.

Next, for our calculations, we need to know the percentage of losses from the sales area. Data on the distribution of losses from the sales area are given in Table 3.

Accordingly, we determine the losses at the cash registers, which can be up to 40% of the losses in the sales area. In our case, 40% of $19,250 will be $7,700. Losses from theft of goods from the sales area by customers and sales area personnel make up to 40% of the losses in the sales area, 40% of $19,250, or $7,700. Theft from the sales area by other categories of employees, suppliers and visitors — up to 10%, which will be 40% of $19,250, or $1,925. We write off the remaining 10% of losses as «natural losses» of trade.

Now it is necessary to calculate the efficiency of technical security equipment, the average percentage ratios for this indicator are given in Table 4.

At the same time, if we say that a technical system ensures the safety of goods from theft by X%, then this value implies the complete serviceability of the system, its proper installation and operation by trained personnel.

The efficiency of using the cash register control system is on average 90% of the losses at the cash registers. For our example, $7,700, and the amount of prevented losses for the year will be $7,315. The efficiency of the purchase control system will be 20% of the theft of goods from the sales area by customers and personnel $7,700 + theft from the sales area by other categories of employees, suppliers and visitors $1,925, and the amount of prevented losses for the year will be $1,925. And finally, the efficiency of using the video surveillance system will be 30% of the losses at the cash registers $7,700 + theft of goods from the sales area by customers and staff $7,700 + theft from the sales area by other categories of employees, suppliers and visitors $1,925, we make the necessary calculations and find that the losses prevented per year will be $5,197.5.

Now we can calculate the payback of the technical security equipment installed in the sales area (table 5).
To do this, we need to take into account the cost of the technical systems that we plan to install. In our example, the estimated average cost of a control system installed at 8 cash registers will be $9,600, the amount of prevented losses per year will be $7,315, and using simple mathematical calculations, we determine that the system will pay for itself in 1.31 years. A purchase control system with a total cost of $12,800 and an amount of prevented losses of $1,925 will pay for itself in 6.65 years. And finally, a video surveillance system with a total cost of $6,400 and a total of $5,197.5 in prevented losses per year will pay for itself in 1.23 years.

Table 1. Distribution of losses by trade and warehouse zones

Table.2 Calculation of the percentage of losses

Table.3 Distribution of losses from the trading floor

Table. 4 Preservation of goods by various control systems, installed in the sales area (with overlap, taking into account the possible absence of other systems, as well as problems in their operation of an organizational or technical nature)

Table. 5 Payback of various control systems installed in the sales area

Table. 6 Distribution of warehouse and organizational losses

 Table. 7 Preservation of goods by various control systems in the warehouse area (with overlap, taking into account the possible absence of other systems, as well as problems in their operation of an organizational or technical nature)

Table 8. Payback of various control systems installed in the warehouse area

Next, we will consider warehouse and organizational losses using the same scheme (table 6).

The total amount of losses in this zone is $15,750, now let's distribute this amount among various risks. As a result, we get that theft at the reception of goods causes damage in the amount of 15% of the total warehouse and organizational losses and will amount to $ 2,362.5 per year, theft of goods from the warehouse by personnel is approximately 10% of the total warehouse and organizational losses and is equal to $ 1,575 per year, losses from the warehouse as a result of the activities of middle managers reach 20% of the total warehouse and organizational losses and amount to $ 3,150, and when concluding contracts they reach 30%, which, accordingly, is $ 4,725 per year.

Theft of goods from the warehouse by suppliers, including in collusion with store personnel — up to 5% of the total warehouse and organizational losses and is $ 787.5, exactly the same amount will be the losses from the costs of storing goods with an incorrectly ordered volume — $ 787.5.

Similarly with the trade zone, we will consider what technical security means are used in the warehouse zone and what is the efficiency of their use (table 7).

The purchase control system will save up to $4,410 per year, reducing losses from theft during product acceptance and losses due to the activities of middle managers by 70%. The economic effect of using the purchase control system per year will be $315 with a protection efficiency of 15% from theft from the warehouse by store personnel. The video surveillance system, having prevented up to 35% of losses from theft during product acceptance, theft from the warehouse by personnel and other persons, will save you $1,890.

And finally, the access control and management system (ACMS) allows to reduce losses from theft at the reception of goods, theft in the warehouse by personnel and other persons by 10%, which will ultimately amount to $708.75.

Now let's calculate their payback (table 8). With a cash register control system, additional equipment for organizing control of cargo acceptance operations on 2 landing stages will cost $2,400, and taking into account the economic efficiency of $4,410 per year, the payback period of this system will be slightly more than six months. A system for monitoring purchases at the warehouse exit with a total cost of $1,600 and an economic efficiency of $315 will pay for itself in more than 5 years. A video surveillance system with an efficiency of 35% in preventing losses from theft at the goods acceptance, theft in the warehouse by personnel and other persons will pay for itself only in 3.39 years. And an access control and management system with a cost of $600 will pay for itself in less than a year.

The payback periods of individual technical systems obtained in this article cannot be taken as a real indicator. This is an example of how to assess the feasibility of installing technical security equipment based on the efficiency-cost criterion.

The configuration and cost of these systems in this case are taken arbitrarily, without taking into account the real market value. The article considers only those issues that can be calculated and have monetary equivalents. But the effect of using technical security equipment should also be considered from the standpoint of indirect influence on the economic health of the company. In this aspect, I would like to emphasize such an issue as the internal facility regime and personnel discipline. I think no one can object to the fact that from unsatisfied
damages from poor work discipline and lost working time can be no less significant than from theft. And when orienting the security service, this issue must be taken into account, and from the technical side, a video surveillance system and ACS can and should be used for these purposes. In addition, we must not forget that security requires a systematic approach.

If we try to organize security by carrying out separate, disparate organizational or technical measures, we will not achieve sufficient effect and will not solve the problem of ensuring the security of the company. Security issues require a systematic approach and continuity in implementation. It is impossible to consider issues of the safety of goods in the sales area separately from issues of the internal regime or from issues of financial discipline of cashiers. The same can be said about equipping a retail enterprise with technical security equipment. An integrated approach to the purchase and installation of technical security equipment allows, with their effective use, to significantly reduce the total cost of the system.

Vyacheslav Gadzhiev,
independent expert

Source: magazine «Security. Reliability. Information» No. 5 (85) 2009