Top 5 Risks in Manufacturing

When risks aren’t managed correctly, we often see the negative results plastered on the news and across social media. Delays, breaches, and quality issues are all prevalent in the manufacturing industry today. The key to preventing these issues in your organization is being aware of your areas of vulnerability. Once you know what to look for, you can actively prevent risk and prepare for worst-case scenarios.

We’ve looked at the top 5 risks facing manufacturers today, so you understand the importance of conducting comprehensive risk assessments in your organization.

Distribution Delays and Disruptions

Delays and disruptions in your supply chain create an immediate and noticeable issue in your daily operations. Delays and disruptions can stem from systemic issues in your supplier’s quality control, transportation issues, or even natural disasters. Waiting for shipment can cause production to halt, reducing productivity, wasting money, and causing further delays of your own.

When calculating where your supplies are coming from, location plays an important factor in your planning. If your supplier is not local or is in an area with a high-risk area, then you’ll need to consider properly stocking surplus parts so that a delay will not have an impact on your operations. However, the more parts you store on-site causes a greater risk and requires a large amount of storage. Utilizing multiple suppliers helps eliminate impacts from delays but requires more resources for planning and supplier assessments. Ensuring your shipments arrive on time is the most cost-effective and least risky method of managing your supplies.

Third Party Vendors

Vendors carry a varying amount of risk dependent on the function they serve in your organization. As an example, a vendor that performs an assembly line function would typically carry less risk than a vendor that assists you in managing sensitive employee information such as payroll or insurance. Manufacturers can be held accountable for third party compliance lapses, so staying on top of their performance is even more critical. Each vendor should be evaluated to know what their risks are and perform assessments to confirm compliance and identify potential needs with monitoring.

Labor Concerns

Often one of the most overlooked aspects of risk are your own employees! Employees need to be properly trained to maximize their efficiency and productivity, as well as minimize risk to the company. Following standards and examples reduce the likelihood of errors and accidents. Employees injured on the job must be compensated and quickly replaced to ensure a smooth production process. Any safety issues could become a potential lawsuit if employees are not properly trained on machinery or any activity that has the potential to cause harm.

Just this June, a worker tragically died at a soap manufacturing company after sustaining injuries from being trapped in production machinery. Incidents like these close the entire facility while investigations take place by the police and safety regulators, such as OSHA. Non-compliance discovered in the investigation can result in major fees for your organization.

Cyber Risks

As cyber security methods evolve, so too do the methods to bypass them. Your organization needs to be attentive to protecting sensitive data for employees and customers such as social security numbers, addresses, payment information and more. Cyber criminals will take advantage of any opportunity that presents itself to them, which is why it is vital to ensure that even the smallest risk is prevented.

Access to documents and systems should be limited and noted, and there should be multiple layers of protection beyond passwords. If your data is not stored on-site, make sure you know where it is and assure you are in compliance with required regulations. As an example of data compliance, certain data cannot be stored overseas and must be kept for a minimum number of years. While this information is stored, you are responsible for its protection.


Keeping current, many manufacturing companies are utilizing industrial robots to run various processes.  Last year, the IRF reported that robot sales increased by an impressive 30% to 381,335 units! This boom in technology is no doubt in an effort to keep the edge on competitors and increase quality and speed of production, however, this has brought in a new area of risks.

Among many manufacturing risks, the increased use of these specialized machines will require constant supervision to ensure their protection from damage, and employees will need to be properly trained to operate them safely and effectively. The number of machines at a single facility can greatly increase its risk score as the monetary value of the location grows. Hardware or software defects in these machines can result in liability for the manufacturer, meaning extra expenses added to the bottom line.

How You Can Plan

As a part of your risk management process, you need to properly plan for all types of risks, not only the aforementioned 5 categories. Utilizing a risk management platform is key for ensuring all risks are minimized or eliminated. SecureWatch provides manufacturing companies an easy way to measure and mitigate risks and compliance gaps by streamlining the assessment distribution and collection process. Our software helps you understand different risks and their potential impact on business, as well as ensuring compliance with state and federal standards, guidelines, and best practices. SecureWatch also excels as risk mitigation software, helping you manage all the risk you’ve identified. Don’t get caught unprepared!

Subscribe for our latest posts


Try any of our products, free.

Riskwatch products are easy to use, free to try, and can be customized to fit your business needs.

Leave a Reply

Your email address will not be published. Required fields are marked *