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Warehouse Risk Assessment: 4 Important Factors


Warehouses in North America incur about $500,000 in losses every eleven days due to unforeseen risks. When business operations include the use of warehouses you should find yourself asking, “what are the risks that I need to be aware of and how I can lower the probability of a loss occurring?” If you're not fully aware of the risks that pose the greatest threats to your warehouse, your organization is vulnerable to millions of dollars in potential losses. 

Here are four critical risks to consider when assessing an organization's warehouse space:

1) Fire 

Warehouses can be conducive for a fire to spread since they are generally large spaces tightly packed with goods. The most effective method for controlling a warehouse fire is a proper functioning sprinkler system. In the event of a fire your organization should also have a fire protection system that includes these essential elements:

  • Fire extinguishers
  • Fire detection systems
  • Fire doors and control doors
  • A well functioning evacuation procedure

2) Flooding

Reduce and prevent the impact of flooding and water damage to both business operations and inventory:

  • Keep stock off the floor.
  • Routinely clean external and internal drains of debris such as leaves, waste, and other vegetation.
  • Prevent water entering the building by installing permanent or removable barriers to seal doors, windows and other openings.
  • Raise electrical sockets to keep them clear of possible flood water.

3) Security

Due to their high volume of inventory warehouses and distribution centres are often at high risk for burglary and theft from both internal and external threats. Internal threats are posed by employees and third parties hired by your company. External threats can be anyone from competitors to just general thieves who have no business being inside the warehouse.

A) Clearly Establish Facility Boundaries

  • Use separate areas for dispatching and receiving goods. Where possible, provide physical barriers between these two areas.
  • Keep the gate to the exterior yard area locked at all times when the warehouse is closed.
  • Provide audible exit alarms on all doors designated as emergency exit only doors. 

B) Establish Visitor Sign-in registers

  • Set up a visitor register and do not allow visitors or delivery drivers to wander throughout the warehouse.

C) Install electronic security and surveillance systems

  • Install electronic access control systems to control access into high-value rooms or cages. The access control system should be capable of providing an audit trail of who entered the cage and when.
  • Install video surveillance systems to record activity in high-value cages and rooms. Cameras should be placed to view entrance points as well as interior areas.
  • Install intruder alarms in order to enable a fast and coordinated response in the event of theft and vandalism.

4) Handling of Environmentally Hazardous Substances

All organizations have a responsibility to ensure that they’re handling environmentally hazardous substances correctly. Ensure that your organization is following the proper laws and regulations for dealing with hazardous substances. 

Here are best practice keys for handling and storing hazardous substances:

  • Store all hazardous substances correctly.
  • Make sure that all hazardous substances are labeled correctly.
  • Segregate substances when required.
  • Use correct procedures when dispensing.
  • Isolate exposures with ventilators at source.
  • Make sure you use the right safety equipment.
  • Have emergency plans in place.
  • Always dispose of hazardous waste in accordance with the law.

Effective Incident Management is imperative in identifying hazards and predicting potential losses. When tracking and managing near miss incidents, your organization will uncover high-risk areas which may have not been known. It's been proven that by reporting on near miss trends, organizations lower the likelihood and impact of losses, drastically reduce claims and insurance premium costs, and make the working environment much, much safer for employees and visitors. 

By implementing an incident management system, organizations make it easier for employees to report near miss incidents by enabling online data submission from any smartphone or computer. This has been proven to eliminate barriers of busy staff forgetting to complete incident reports and eliminates time spent with manual data entry for reporting staff.  

To learn more about the risks associated with warehousing and distribution follow the link here to NZI Risk Solutions Warehousing Management Guide.




Topics: warehouse risk warehouse risk assessment Warehouse risk management