Warehouse Risk Assessment for Your Online Business - Dash101 Blog

What is Warehouse Risk Assessment and Why is It Important?

warehouse risk assessment

The popularity of e-commerce is increasing unprecedented with each passing day. More and more sellers are establishing an online business because of the lucrative opportunities. Online business follows the need to store inventory. And this is where the need for warehouses aises. As sellers store their inventory in warehouses, a need for warehouse risk assessment arises. Wondering what is it? Don’t worry, we’ve got you covered!

The demand for warehousing goes up as ecommerce sellers sell more goods. While there is a lot of competition in the warehousing industry, it all comes down to the most efficient and safe delivery option. If you are looking for a warehouse, chances are that you will find several of these in your locality. Some of these will also be available at unbelievable low costs. But, to choose a warehouse in haste can end up costing you more. 

The choice of an ideal warehouse involves a lot of considerations. And this is where the warehouse risk assessment has a role to play. Warehouse risk assessment involves a lot of details that sellers must know about. Understanding this will not only increase their decision making capability for a warehouse but also their overall business.

The Importance of a Warehouse in an Online Business

If you’re wondering about the importance of a warehouse, it is time we take you through your ecommerce journey. 

  • The first thing you do when you’re selling physical products is to store them at the warehouse. Once the negotiations of the product turn out to be found with your supplier, you start storing products. 
  • Now the ideas that you might have different kinds of products. Some of these might be apparels, some handicrafts and others. Each of these have a separate storage requirement. 
  • The first time that your supplier sends you the products, they look very fresh and new. This is the point where you take product pictures and upload them on your website. 
  • When your customer sees this, they want the products in the same condition. 
  • However, remember that while the images will remain as it is, it is possible that the quality of your products may degrade with time. This happens because of an inappropriate storage environment. For example, taking a subset of apparels, you have to store a silk cloth. 

Now if you do that ordinarily with other fabrics and keep it lying in a simple plastic packing, chances are your product will be spoilt. Insects breed over some fabrics more easily than others. And if you’re dealing with such a material, it is something you need to know. 


Picking, Packaging and Dispatching

  • So, when you receive an order of a certain product that you have several quantities of you simply pick, pack and ship it.
  • When the customer receives the product at their end, they open it with a lot of expectations. In other words, they expect the product to look like the one from your images. This is where everything falls apart. 
  • First due to lack of a good warehouse, there are high chances that your products are spoilt. This will either make you ship a damaged inventory unknowingly. (if you don’t have any quality check at the warehouse). In another case, you declare an inventory stock out condition. 

Either ways, you have losses pouring in on your business. Not only is your customer satisfaction being impacted but also your overall business value. And needless to say, a bunch of unsatisfied customers are the prime reason for a bad reputation in the market. 

warehouse risk assessment

The Role of Risk Assessment in a Warehouse

Warehouse might come as an element of the background when running a business. In other words, many sellers think that because it doesn’t have to do directly with the customer, low cost is always the best option. But, in this process they seldom realize that the journey of an online business begins with the inventory. And it is the warehouse that is responsible for the god keeping of the inventory. For this reason, sellers need warehouse risk assessment.

Warehouse risk assessment is a process in ecommerce. It refers to analyzing the risk to the inventory and safety of the workers. Because there are only two things that are in your warehouse. The first is your inventory that is stored in the warehouse and the second are the people that are responsible for carrying out various actions related to it.

Analyzing Risks to Workers

In other words, when you have a lot of inventory, you need to hire a team to look after it. Warehouse risk assessment also deals with this fact and identifies any potential threats to the safety of your warehouse workforce. For example, you might be selling heavy industrial tools to your customers. If your warehouse is not arranged, they might be lying here and there. As a result, when your workforce goes onto finding and picking a product due to an ongoing order, they might hurt themselves. Such kinds of scenarios are avoided with warehouse risk assessment. 

Mitigating Potential Hazards

In addition to this, another popular element of the warehouse risk assessment is to mitigate any potential hazards. When workers are working in your warehouse, you need to make sure that any hazards that are identified are taken care of. And that no such situation might arise in the future. Because when your team is working in your warehouse, their safekeeping is one of the prime focuses of your business.

Evaluation the Condition of the Warehouse

Does your product look tampered over time? Or do you often see cut-out pieces of your inventory lying in the corners. If this is the case, there are chances that your warehouse is infested with rodents and other pests. While they are damaging your products, they are also leaving your warehouse in an unhygienic condition. This in turn is a matter of worry for your workers as well as your customers. Especially in a post pandemic world where extra precautions are being taken to avoid such incidents, you need to be careful. Warehouse risk assessment makes sure that this is taken care of. 

Avoid Any Inefficient Processes

Lastly, one of the major things that warehouse risk assessment evaluates in inconsistencies or inefficient processes. Inefficient processes can make your business look bad. It can slow down your business and cause errors. For example, if your orders are often delayed in dispatch, your inventory might not be in the right place. This is leading to an inefficiency in your warehouse. With warehouse risk assessment, the effort is to try to identify such areas and eliminate them. 

How to Perform Warehouse Risk Assessment for Your Online Business?

Warehouse risk assessment can help you with many things. Most importantly, it can cut down unnecessary business costs and losses. If you’re a small business, saving even a few extra cucks can mean a lot. By performing warehouse risk assessment you are ensuring that you are keeping your inventory healthy and workers safe. 

But, it’s okay to wonder how to get started with it. We’ve got you covered with the following steps-

Find Out Potential Hazards

The first step in warehouse risk assessment is to find out potential hazards for your online store. You have to pay attention to each and every detail in your warehouse. Right from the time that an inventory lands in your warehouse to the time it is dispatched. Get down to the backend of every process and understand what hazards are involved. Some of the questions to ask are-

  • What are the most common issues related to safety? 
  • Can the storage be optimized for better movement of the staff
  • What  or how can an injury be caused in the existing scenario?

Identify Who or What is At Risk

Once you identify the potential hazards, you need to evaluate the risks associated with them. In other words, you need to find out what or who is primarily out on risk due to the inefficient processes. It might be your packing staff or someone who unloads the products in yoru warehouse. Similarly, find out the risks associated with every operation. You might also analyze past accidents to understand what goes wrong. 

Observe Carefully

Make sure you don’t have a bias when you start observing. Just because it is your business, doesn’t mean that there will be everything right with it. It can be heard crunching to see disruptions and poor operations. But, at the same time make sure that you observe everything and make a note of it. Remember that it is on the basis of warehouse risk assessment that you will take appropriate measures .


Update Your Existing Protocols or Form New

Once you have everything documented, it’s time to make the changes. Update your existing security protocols or make new ones. Warehouse risk assessment is only helpful if you are willing to make the changes. Train your staff if there is a need or make a new safety protocol that has to be followed at all costs. 

Conclusion

It is important to remember that warehouse risk assessment needs to be depending upon the nature of products you sell. So, if you are selling potentially hazardous goods, you need to step up and take additional measures. Make sure that you prioritize the safety of your workers. As you do so, it will ultimately impact the customer experience and increase your value as a responsible business.

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