How Do You Assess Warehouse Risk?

Your warehouse is the center of your company’s operations, and if something catastrophic happens, it could dramatically harm your business. However, while devastating losses in warehouses are not the norm, the facts are that about half a million dollars in damages occur every eleven days in warehouses in the U.S. because of inadequate risk assessment.

To reduce the possibility of warehouse losses, you must be able to foresee where potential risks lie and take action to minimize them. We will look at four areas that should be considered when assessing warehouse risk.

Security

Because warehouses often have inventory on hand, they are at high risk for both employee or contractor theft and break-ins. It is estimated that 50 billion dollars are lost by businesses and one-third of companies are forced to declare bankruptcy in the United States each year because of employee theft.

In production environments, not only is inventory at risk but so are expensive tools and equipment. Therefore, it is vital to have tight security measures and procedures in place in your warehouse to reduce your risk of loss.

One key measure is installing electronic surveillance and security systems. Electronic security systems work by using an employee key card where IT administrators use software to assign designated areas where employees are and are not allowed to go within the facility. This gives you the ability to control access to the warehouse itself and locked areas within the warehouse.

Security camera systems should be placed in strategic locations both within the warehouse – including cages or rooms where high-dollar items are stored and at doorways and dock doors – and outside the perimeter of the facility making sure all entrances are under surveillance.

A security alarm system should be installed for the warehouse, and it should be activated when no one is at the warehouse so that if the theft is from an outside break-in, law enforcement can respond quickly to mitigate any loss.

Another part of warehouse security that should be implemented is to have a visitor sign-in register and to ensure that all non-employees are escorted through the warehouse.

A final aspect of warehouse security is making it physically harder for theft to occur. There should be separate areas for receiving and shipping products, ideally physically delineated by a barrier (for mid-sized and large operations, this is not an issue since there are separate loading dock areas for shipping and receiving to get optimal warehouse flow, but it is critical for small warehouses).

All emergency exit only doors should be outfitted with high-volume alarms that are activated when they are opened.

Additionally, all exterior gates for the facility and warehouse should be locked when the facility and warehouse are closed.

Fire

Fire is always a risk for warehouses. With the right elements – a heat source, a fuel source, and oxygen – the “fire triangle” can destroy a warehouse and all its inventory and equipment, as well as killing warehouse workers, in a short period and put you out of business for good.

To minimize the fire risk in a warehouse, five protection measures should be in place:

• A properly-functioning sprinkler system that should regularly be tested to make sure it works.
• Fire extinguishers on every floor. A good rule of thumb is there should never be more than 50 feet between fire extinguishers, so you can calculate how many you need based on the size of your warehouse.
• A regularly-maintained fire detection system.
• Fire and control doors.
• An evacuation plan that is documented (including signage on facility and warehouse walls), given to all employees, and practiced regularly.

Handling of Hazardous Materials

There are federal and state laws and regulations that cover how hazardous materials should be handled. Following these will minimize the risk they pose if they are improperly handled in your warehouse.

Proper guidelines for handling and storing hazardous materials include:

• Making sure all hazardous materials are properly stored, including having different areas for different materials if keeping them together increases risk.
• Ensuring that all hazardous materials are correctly labeled.
• Using proper procedures when working with dangerous substances.
• Having the appropriate safety equipment.
• Guaranteeing that exposures can be contained if there is a general risk of exposure.
• Having first-aid stations set up to handle single exposures.
• Disposing of hazardous materials properly.

Flooding

Every year In the United States, water damages more property than any other element. Because flooding can be from an internal source, such as water pipes, or an external source like inclement weather, it is impossible to eliminate this risk entirely. 

However, there are things you can do within your warehouse to prevent or reduce the amount of water damage and loss in case of flooding.

The first thing is to make sure that no inventory is sitting directly on the floor. If you keep inventory that is in the bottom level of your racks on pallets, you can lessen the risk of damage in the event of flooding.

The second thing you can do to minimize the risk of flooding event is to make sure that all your external and internal drains are regularly cleaned so that water can flow as quickly into them as possible.

Another step that will help lower the impact of flooding is to make sure that all windows and doors are properly sealed to prevent water from entering the warehouse. There are removable and permanent barriers that are made specifically for this purpose.

A final step that should be taken is to position electrical sockets high enough that it will be virtually impossible for them to be impacted by regular flooding. Electrical outlets that are submerged underwater have the possibility of electrifying the water, making it lethal to anyone who steps in it.

Call Us Today

At PartsBrite.com, we specialize in providing high-quality aftermarket loading dock parts. If you have loading docks, we have a full line of dock parts that can satisfy your particular needs. Our sales office is located in California, and we have two distribution warehouses – in Wisconsin and California – that enable us to ship dock parks quickly anywhere in the United States. Contact us at 1-855-PARTSBRITE (1-855-727-8727).