What is the Importance of Risk Management in Warehousing

1. What is Risk Management in Warehousing?

Accidents happen every day, right? It’s not like we can control them, right? Wrong. You may not be able to foresee every accident that comes your way, and some of them might very well be out of your control.

But when it comes to logistical performance, a large part of day-to-day accidents can be prevented or at least minimized with effective risk management processes.

What is risk management, you ask? It is the act of identifying and eliminating sources of possible accidents or hazards. Anything that threatens an employee’s health or well-being can be classified as a risk.

Risk management is especially important in warehouses, where large trucks and crates move around all day and a single misstep can cause a fatal accident.

Thus, risk management is an inalienable part of running a successful e-commerce business. You can’t expect to rake in good returns without ensuring proper safety protocols and accounting for possible mishaps.

Just one flaw, no matter how small – a chink in the armour, if you may- can bring down your entire operation if not identified and handled correctly. Therefore, the wisest option is to take as many precautions as you can, planning for a comprehensive risk management strategy and minimizing losses.

2. Risk Management in Warehouses

The warehousing process is long and complex – it involves large scale transportation, storage, and labelling of goods, all done in a systematic manner. But then again, warehouses are one of the most danger-prone areas to work in within the logistics industry.

Accidents like falling from a height, slipping, tripping, getting injured while operating machines, are more common-place than many of us think. So, it follows that some of the most important applications of risk management strategies can also be found in warehouses.

Warehousing accidents are very costly from the perspective of an emerging e-commerce business. Usually, the company is held accountable for endangering the workers, and has to pay a hefty compensation, ranging from medical bills to fines.

But even that is nothing compared to the anguish suffered by the families and near ones of those who are involved in said accidents.

3. Common Warehousing Risks: Causes and Solutions

So what steps or measures can we implement to ensure that accidents are reduced and the workers can feel safe? Here we identify some of the most common risks or hazards that usually plague the warehousing process, and how to resolve them as best as possible:-

3.1) Isolated Accidents

These accidents are usually suffered by a single worker or a small number of workers, not due to some fundamental problem with the warehouse itself, but due to some isolated cause, such as negligence or lack of proper light.

A proper risk management strategy ought to reduce isolated accidents by making the workers go through compulsory employee security programmes while joining, familiarising them to use the equipment in a safe manner, and making sure that day-to-day safety standards in the warehouse are met.

When it comes to specialised operations, complex machines and forklifts should be operated only by professional or experienced handlers, and regular inspections as well as training programmes should be conducted for the general employees.

3.2) Fire Damage

Fire is potentially one of the most harmful accidents to happen to a warehouse, sometimes resulting in millions lost in property damage. As warehouses are usually tightly packed with goods and crates, even a minor fire can quickly burn everything down.

Measures to minimize the chances of fires breaking out include:-

• Installing sprinkler systems that go off during fires
• Installing fire extinguishers at regular distances
• Training employees to identify fire hazards and handle the situation delicately.
• Making sure that the fire detection systems are up to date
• In case of large fires, ensuring proper evacuation plans for employees

3.3) Water Damage

Water damage is quite possibly the next worst thing to happen to a warehouse after a fire. It causes goods to get wet and soggy, it might cause mildew and smelling, and it can also breed diseases if left un-cleaned for long enough.

As such, it’s essential to resolve flooding or water leaking issues within the warehouse as fast as you can. Some helpful tips:-

• Valuable or easily damaged goods should be kept at high levels where water finds it difficult to reach
• Routine cleaning of the warehouse should be done to ensure no leaking issues exist
• Keep a regular check for flood or cyclone warnings in the area
• Electric machinery and equipment should be moved away from the flood-prone areas
• Similar to fires, educate the employees to carry out proper evacuation in case of flood.

3.4) Environmentally Hazardous Substances

Substances which can potentially harm the surroundings, or which might get contaminated if not handled correctly, should usually be stored separately. Examples include pesticides, chemicals, and so on.

Such substances ought to be treated delicately, as a single trip or spill while carrying them can lead to widespread contamination and damage. Some measures to keep in mind:-

• Label them clearly and correctly
• Wear protective gear when handling them
• Follow the safety laws as mandated by the experts or the government

3.5) Theft or Burglary

Accidents are not the only calamity that can befall a warehouse. Man-made security threats are also a very real issue. Burglaries and thefts are unfortunately quite common in warehousing, sometimes even with help from an inside person. To minimize cases like these, it’s important to follow the steps given below:-

• Keep the warehouse well-guarded at all times. Install security cameras and high-wall boundaries.
• Install safety alarms near the entrance and exit, and make sure it is loud enough for everyone to hear.
• Don’t let unauthorised personnel enter the warehouse.
• Consider giving the employees identity cards as an extra precaution.
• Perform background checks on the employees and ensure that the workers are honest and capable.
• High-tech security systems can also be put in place to help reduce thefts

4. Conclusion

From the above points, we gather that risk management is an important tool for businesses to ensure employee safety and minimize losses.

We came to know about the major types of warehousing risks along with the measures by which to control or resolve them. This knowledge can help us better navigate such situations in the future.

Other than the specific measures mentioned above, some more ways to ensure holistic and comprehensive risk management is to educate and train the employees well, a point that simply can’t be stressed enough. Skilled and well-trained personnel go a long way in reducing risks during day-to-day operations.

Risk management need not be hard or overwhelming. If everyone comes together to ensure that safety standards are met and the products are handled with care, it will soon become second nature.