The logistic related companies have more and more invested in the optimization of their activities associated to risk management. The annual investments to avoid losses caused by the poor conditions of roads and cargo theft may in some cases reach 10% of the companies’ revenues. This subject has gained importance over the last years and has caused strategic discussions at board meetings of these companies acting in this segment.
At a logistics company, the attention is focused on four distinct areas: human resources, technology, procedures and training. All of them are considered basis to a proper risk management, which has the main function of observing and following-up the logistic processes to reduce as much as possible the probability of losses to the client and the organization.
The biggest drive leading companies to invest in risk management is the possibility to offer a safer and more reliable operation to their clients, employees and partners. In addition, according to the segment’s companies, it has been proven that significant cost savings can be accomplished when comparing to indemnities, losses and damage caused to third parties’ goods and assets.
All logistics activities have the peculiar and specific condition of depository of property for a determined purpose, being it manipulation, processing, assembly, storage, transferring, transportation, commerce, distribution, and others. Regardless if this property belongs directly to the company, there is an enormous responsibility for the management of risks to these goods and assets. To better exemplify this, we can imagine how much is a Distribution Center of a company worth, or also the raw materials and products that are introduced on the production lines and the impact that the lack of such materials and products may present to the continuity of the production process.
A fundamental warning should be reiterated regarding the risk of property loss under the logistics company responsibility: risk is different from hazard. Hazard is the origin of the loss. For instance, a fire is a hazard, while the risks are the storage conditions, type of commodities, absence of fire prevention programs and preventive organizational culture, inadequate electrical installations, amongst others. On the other hand, it is good to know that these hazards can be managed, and that companies which have not yet adopted the best practices of this segment can work towards implementing policies, procedures and protection systems to reduce costs and losses, by knowing the existing hazards and which conditions will allow losses to happen, and how to eliminate or mitigate these hazards. Proper understanding of the hazards will help the adoption of preventive measures, focusing on preventable losses.
Another relevant risk is posed by occupying a logistics condominium in the same building as other companies, and depending on the diversity of occupants, there is a risk of influencing the commercialization and storage processes. Some activities are not compatible with others, which requires that the administration properly manages the tenants to minimize conflicts. In general, the activities which present the biggest challenges are industries that store high hazards products, high value storage that increase the security risks and activities which present environmental hazards.
Pelacani Risk Management and Engineering will add value and knowledge during design and construction of new warehouses for the company’s own use or lease. Our expertise will help to design more complex preventive systems when required, and we can also provide consultancy on the design of installations when a new tenant require specific features for its operation. The complexity of installations necessary for a tenant to occupy a leased location may greatly vary, including assembly of equipment, complementary infrastructure, specialized areas, review of safety systems; and may require intense communication with the administration to synchronize all construction work activities.
