July 28

How to Manage Risk in Warehouses: The Ultimate Guide


What is Warehouse Risk Assessment?

The sluggardly amble of consumers towards eCommerce experienced an explosive acceleration due to the COVID-19 pandemic, with the first quarter of 2021 recording a massive 74% increase in eCommerce sales as compared to 2020. According to a report by the BCG Henderson Institute (BHI), the number of packages delivered around the world is expected to climb up to 200 billion in 2025, from less than 90 billion as it was in 2018.

With the rise of online shopping, the warehouse and storage industry has grown immensely in recent years. As the number of parcels that roam around the globe increases, so does the demand for storage spaces and it also means increased competition for safety measures in warehouses.

As the number of shelves grows and the movement of parcels increases, how do you make sure that your warehouse is optimised to tackle all workplace risks? To function effectively, it is pivotal that your warehouse does not pose any threat to the products that are stored and to the personnel employed there. Implying the importance of proper risk management in warehouses, the concept of Warehouse Risk Assessment has been developed by professionals which helps warehouses of every shape and size manage and mitigate risks.

Warehouse Risk Assessment refers to the identification and evaluation of risks as well as implementing safety measures and reviewing them. It is both for the safeguard of workers and products alike, and it can eliminate the possibility of haphazards that can damage the seamless operations in your warehouse.

Importance of Warehouse Risk Assessment

Ensure Employee Safety

Those who are employed in warehouses face many kinds of risks every day. The kind of injuries that can happen in a warehouse can vary from minor to life-threatening, hence it is important that proper warehouse risk assessments are done regularly and safety procedures implemented. When an employee gets into an accident in the warehouse due to poor risk management, the organisation could be financially liable and the confidence of employees could also be damaged.

To ensure employee safety in warehouses, it is important to consider their specific, individual needs. For example, your workers vary in height, so installing adjustable shelves and adjustable seats in vehicles can greatly contribute to the safety of the workers. Making sure that your workers are properly trained to handle the machinery and vehicles in the warehouse is another important factor when it comes to the health and well-being of employees.

Reduce Product Damages

The main purpose of warehouses is to store goods safely until they are distributed to the end consumer. If your warehouse has not taken any action toward mitigating risks, this core task can be interrupted, which is the worst thing that can happen to any warehouse. Therefore, making sure that your inventory is safe from damage and accidents is vital.

Environmental hazards like floods and heavy rains pose the highest danger for stored goods if the warehouse is not properly equipped to handle such occurrences. Accidents such as fire can destroy your entire stock of products within a matter of minutes, therefore proper fire-prevention methods have to be implemented. Even minor discrepancies such as storing heavy goods on higher shelves can result in catastrophic product damage, hence it is important to give attention when manhandling the goods as well as training your employees in proper manhandling practices.

Avoid Legal Penalties

Warehouses deal with a lot of goods of every shape, size, and cost on a daily basis so it is safe to assume that there are a lot of manufacturers and suppliers involved in the process as well as several other third parties such as logistics providers and retailers. With the movement of lots of goods and people, wholesalers enter into several contracts when purchasing, renting out storage spaces or hiring third-party logistical support. In such an environment, wholesalers can be held liable in court and can be charged large compensation fees if goods get damaged during storage or untimely deliveries due to poor risk management.

Even though wholesalers are not responsible for the faultless manufacturing of products, they can still be held liable in cases where an end consumer receives a faulty product that got defective during storage. To avoid such incidents, one cannot stress the importance of proper risk management enough.

Prevent Theft and Burglary

A higher volume of inventory means a higher chance of theft and burglaries, especially when it comes to warehouses which store high-value inventory. Even if that is not the case, when there are lots of goods stored in a large warehouse where there is lots of movement, theft prevention is a must to preserve proper work conduct.

Security risks such as thefts can originate both internally and externally. Internal threats are most commonly posed by warehouse employees themselves and hired third parties. External threats would involve anyone who enters the warehouse premises without authorization and security clearance such as burglars and breaking-and-enterings.

For the prevention of thefts, it helps to have separate areas in the warehouse for receiving and dispatching goods so that thefts during manhandling are mitigated. Nowadays, the installation of electronic security devices such as audible alarms, biometric security devices, and video surveillance systems has proven highly effective against thefts. Furthermore, maintaining registers for visitor/driver/third-party sign-ins and setting up anonymous reporting systems for complaints can reduce thefts and the damage done by them.

Steps to Perform a Warehouse Risk Assessment

The process of Warehouse Risk Assessment has been broken down into five steps for easy implementation; Identifying the hazard, determining who is at risk, evaluating the risk and implementing control measures, recording observations and reviewing and making necessary updates.

Identifying the Hazard

A hazard is an object or situation that has the potential to cause harm to both goods and personnel. The easiest way to identify hazards is through thorough inspections. Warehouse workers can provide valuable feedback when identifying hazards because they roam in the warehouse on a regular basis, so make sure to consult them when conducting inspections.

Determining Who is at Risk

After identifying the hazard, you need to ascertain those who are the most likely to be affected by it. These can be either stored goods, storage locations (shelves, storage cabinets, pallet racks, wire partitions, etc.), or human resources.

Evaluating the Risk

Analyse the level of threat that the hazard poses. Is it minor? Or is it life-threatening? Either way, all identified risks must be eliminated and alternatively, proper control measures can be implemented. It is important to look into any past incidents when evaluating the risk.

Recording Observations

Recording everything that was identified and analysed in the first three steps is equally important when it comes to risk assessment. Based on these, plan the necessary safety protocols and control measures.

Reviewing and Updating Control Measures

After implementing the necessary safety measures and making changes to your work environment, it is important to review them and update them at fixed intervals. This can help identify future hazards and it helps you eliminate them before any damage is done to either goods or personnel.

Types of Risks in Warehouses

Manual Handling of Goods

According to studies, almost 80% of warehousing and handling facilities in the world still use human labour for tasks such as loading, unloading and handling goods. Since these tasks require activities such as pulling, pushing and lifting where the human body posture can be affected, they must be carried out with extreme caution. To eliminate injuries to workers during the manual handling of goods, mechanizing warehouse processes can be a good start.

Accidents that happen when it comes to the manual handling of goods can also pose a threat to products. While workers can experience physical injuries such as sprains, strains and joint injuries, goods can also be damaged due to spillages and breakages.

Slips, Trips and Falls

The most frequent types of accidents that can happen in warehouses are slips, trips and falls. Although these do not cause life-threatening injuries often, sometimes they can also cause very serious injuries to personnel and damage to products. Falls that can happen while working at heights are more dangerous as they can cause fatal injuries such as broken bones or even fractured skulls.

To prevent slips and trips that can happen, it is important that you identify and eliminate threats such as uneven floors, insufficient lighting, slippery floors due to water/oil spillages and inappropriate placing of goods (on narrow pathways or on stairs). Furthermore, encouraging proper usage of footwear among your workers can minimise accidents caused by slips and trips to a considerable extent.

Avoiding accidents that can happen while working at heights can be easily done through proper implementation and maintenance of machinery and equipment. Conduct timely services on equipment such as ladders, step ladders and scaffolds and ensure that they are in optimal condition. Deploying mechanical equipment such as forklifts to handle working at heights is also a good option for avoiding injuries to human resources.

Handling Hazardous Substances

Every organisation that handles environmentally hazardous substances has a responsibility toward its workers, environment and community. The responsibility is even greater for warehouses that store hazardous substances, solely due to the long time periods they are there.

To prevent any incident that can happen due to hazardous substances, it is important to label and store them correctly according to guidelines. Make sure that there are emergency plans in place in order to mitigate the damage that can be done to personnel or products and always comply with the law when disposing of hazardous substances.

Fire and Flood Risks

More often than not, warehouses are large spaces with a lot of goods that vary in nature. There can be paper-related goods as well as inflammable materials stored in warehouses, making even a small fire or a flood devastating. Apart from the obvious product damages from the heat, flames and water (in case of floods), employee injuries and smoke damage may also occur in cases of fires and floods. If warehouses are not properly safeguarded against such disasters, organisations may have to go to extreme measures such as court penalties and possible relocations.

Several safety measures can be taken to prevent fires and reduce the damage done to personnel and goods in warehouses. The simplest of them is installing fire suppression systems such as sprinklers, smoke detectors, fire alarms, fire doors and fire extinguishers. Training warehouse employees on how to identify any causes of fire and educating them on fire safety protocols are equally important to prevent fire damage. Proper fire evacuation procedures should also be planned, documented and shared publicly so that not only warehouse workers, but also visitors can also see them.

To prevent flood risks and mitigate flood damages, the first and foremost safety measure is to be aware of flood warnings in the area, especially if the area is known for high water levels. Keeping goods off the floor and storing water-damageable goods on high shelves is one of the simplest ways to avoid flood damage in warehouses. Furthermore, regular drainage cleaning and installing barriers to seal doors and windows can also be implemented as a precautionary measure against floods. To mitigate employee injuries, it is also important to keep electrical sockets and wiring above the ground level where water cannot reach them in case of floods.

As it is said, prevention is always better than cure and it is no exception when it comes to warehouses. Conducting proper Warehouse Risk Assessments at regular intervals and implementing proper safety measures are vital when carrying out warehouse operations smoothly. If your warehouse is set back because of an unforeseen accident or hazard, the entire supply chain may have to be put on hold, causing considerable losses in terms of human resources, stored goods and also overall profits. Hence, the importance of warehouse risk assessment cannot be stressed enough and as it is universally known, better safe than sorry.