top of page

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.