Over half of factory fires are caused by faulty equipment and machinery (59pc), according to a supply chain mapping company. The second-highest cause of fires was flammable liquids and gases (18pc), followed by electrical lighting and equipment (10pc), then human error (4pc), hot work/welding (3pc) and combustible dust (3pc). As for fires that did start in the assembly/manufacturing area barely one in ten, 11pc activated the sprinklers, with 9pc of fires causing factory downtime of over four weeks.
When equipment and machinery are incorrectly installed, operated or maintained, fire risk continues to grow through an absence of proper safety, cleaning and maintenance procedures, says Resilinc. A contributing factor is a shortage of labour if employees are not well enough trained and not spotting potential risks. Other gaps around processes and component shortages were also cited in the report.
Besides the cost of repairs and damage itself, there is a cost in lost business and output while the factory isn’t operational, the firm adds. Not to mention an impact on the supply chain, as those relying on the factory for critical parts and goods suddenly are not able to be fulfilled.
Bindiya Vakil, founder and CEO, Resilinc said: “The increase in factory fires is a worrying development because of the ripple effect it causes to the whole supply chain. One of the examples in our Factory Fires report that really brings this home is a three-day fire at a semiconductor plant in Japan which shut production lines down for six months. This sent procurement teams scrambling and the price of some chips went from $5 to $110 in a matter of days, ultimately costing sourcing organisations tens of millions of dollars. A supplier risk assessment later revealed that the site didn’t have automatic sprinklers or a fire suppression system which contributed hugely to its voracity.
“Clearly an increase in the cost of vital parts produced by your supply chain should a supplier suddenly be unable to fulfil your requirements could be hugely damaging to your own business. This is where the need to multi-tier map and monitor your suppliers properly becomes crucial. Imagine if one or more businesses had identified the fire risk at the Japanese chip producers? Numerous businesses in that supply chain could have saved themselves millions of dollars in unanticipated costs.”
The report can be downloaded at https://www.resilinc.com/learning-center/white-papers-reports/factory-fires-the-top-supply-chain-disruption/.
