Why is Risk Management in Warehouse Important?

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Warehouses are exposed to plenty of hazards and this is the reason why you should be extremely conscious about Warehouse Risk Management. Assessing the hazards that can arise and managing them is extremely important.

They are often the target of burglary, theft, and pilferage, and various kinds of unforeseen risks. Wholesalers and suppliers lose millions of dollars due to improper systems in warehouses. 

If you have a warehouse or you are responsible for the same, you should make sure that you assess all the potential risks and problems involved with warehouses. If you hire risk managers, they should be able to effectively reduce the exposure of the hazards. 


Otherwise, it can have a direct impact on your company’s performance.

Here are some of the major issues that can arise in a warehouse along with possible solutions. In this blog, we are going to talk about how important risk management at warehouses is. 

Risks at warehouses

Fire

We often come across news where businesses lose millions of dollars due to warehouse fires. It is extremely unfortunate but sadly, not many people take necessary actions to ensure that such incidents do not take place. Even if it does, a few measures can control the severity of the same. Warehouses are tightly packed spaces with plenty of goods in them. Even a small fire can destroy tons of cartons within a few minutes. It can even lead to employee injuries, etc. 

However, a few safety measures such as installing fire suppression systems like sprinklers or fire extinguishers make sense. 

We would also suggest you enhance your budget a bit and install fire detection systems like smoke alarms. You should run training programs to educate your employees on how to react if such incidents take place. 

These should be practiced on a daily basis. For more information, read the other blogs in the thread. 

Flooding

Next, we would be talking about flooding, which again leads to huge losses for business houses. You should be more careful if you have a warehouse in an area that is low or is prone to natural calamities. 

Risk management in this case can decrease the severity of the loss. 

You should be aware of flood warnings and remove the materials at the earliest. Keeping a check on the weather forecast or asking an employee to do the same makes sense. 

Secondly, you should also conduct regular flood risk assessments and inspections. Check if there is any portion in the warehouse that is highly susceptible to flood hazards. 

Do not keep the goods on the floor. If you have documents, etc., then keep them at a higher level where water wouldn’t reach most likely. You should also move machines, etc. for the same. 

You can stop water from entering the area by getting permanent or removable barriers to seal floors, doors, etc. Hire someone to regularly clean the draining systems and eradicate debris, etc. 

You should hire an electrician and raise electrical sockets and wiring above ground level. You should also train employees to understand flooding hazards. 

Burglary and theft

This is a very important reason why risk management at warehouses are extremely important. Because there are plenty of things stored in a warehouse, they are often the targets of theft and burglary. This is mainly because of the huge volume. But with a proper risk management system in place, things can be controlled to a huge extent.

There has been plenty of cases where employees have also been involved in such thefts. So you can understand that there are typically two types of threats you have to deal with. 

For controlling this, you should take measures like using separate areas for dispatching goods as well as receiving them. 

Audible alarms should be installed at all the doors. The gate should be kept close most of the time. You should give responsibility to your risk manager to take care of this. Only authorized access should be allowed. 

Visitors should be asked to sign before they enter the premise. In modern days, most warehouses have top-notch surveillance systems. Nothing can beat the power of electronic security systems. 

 Registers should be maintained as well. All of these fall under the warehouse management system. Delivery drivers shouldn’t be entertained inside the premises as well. If he at all goes inside the warehouse, then he should be accompanied. 

You can even install video surveillance systems to record activities so that you can always refer to the same. You should install them at the entrance points.

Cameras should be placed to view entrance points as well as interior areas to stay away from the theft, vandalism, etc.

For staying away from internal thefts, you can set up an anonymous reporting system where people can complain without having to face repercussions or consequences. Conducting background checks is a must. 

Handling environmentally hazardous substances

 Sometimes, warehouses face losses due to hazardous materials. The warehouse should be following proper rules and regulations when it comes to storing or dealing with such harmful substances. 

The substances should be labeled and segregated as and when required. You should also use the right procedures when dispensing the items. You should use the right instruments for the same. If there re government guidelines related to the same, then you should also go through it. Abide by the law and you are good to go.

Employee Safety

A risk management system is also required for employee safety. If anything happens to any employee, the company has to take all kinds of liabilities. This is why you should take proper care of the same. Take the help of machines and eradicate manual labor as much as you can. 

You should also train your employees so that they know how to handle the equipment. 

Train employees to use all job-related machinery and equipment.

Product damage

Apart from damages from fire and flood, there are various kinds of other things from which products can get damaged. It could be a lot of things such as improper storage of items, manhandling of goods, wrong temperature, etc. 

For this, certain measures such as keeping lighter items at the top, training staff for proper handling, using other security measures, et al should be taken. 

Equipment failure

Warehouses are dependent on various kinds of machines and tools. This is important for seamless production. However, things can go wrong if machinery fails. Thus, you have to take preventive measures. 

Hire trained employees for dealing with the equipment. Also, beware of cyber threats, etc. You should also opt for effective incident management. 

Here are a few tips on WRM:

The first thing that you should do is eradicate the hazards and replace them with something better. You should substitute the hazard with something better. 

Conclusion

Through proper management controls, you should dilute the exposure to certain threats. 

People should be taught to stay away from forklifts. Hiring efficient risk managers may also help. The key is to identify the threats and working on them. 

If you have a warehouse, hazards surrounding it is inevitable because of its complex and dynamic environment. But with proper WRM, you can control it. 

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