Centralized Warehousing IN Pharmaceuticals

CENTRALIZED WAREHOUSING
IN
PHARMACEUTICALS
By
Piyush Tripathi, Ashima Kaushik, Hemanth Koduri,
Varun Reddy Thummala, Vibha Sharma
MBA PHARMACEUTICAL MANAGEMENT
IIHMR University, Jaipur
Concept
Need for storage arises both for raw material as well as finished products.
Storage involves proper management for preserving goods from the time of their
production or purchase till actual use.
When this storage is done on a large scale and in a specified manner it is called
“WAREHOUSING”.
Warehousing refers to the activities involving storage of goods on a large-scale in a
systematic and orderly manner and making them available conveniently when needed.
Creates time utility by bridging the time gap between production and consumption of
goods.
Functions of Warehousing
Movement function
Receipt of
products Placement at Transferring
Transfer into Regrouping
from designated on transport
the warehouse products
manufactur place vehicle
ing plant
Storage function
Performed by storing products in the warehouse till delivery to ultimate

consumer
Typical Warehouse Functions
The Role of Warehouse in the Logistics System
The warehouse is where the supply chain holds or stores goods.
Functions of warehousing include
Transportation consolidation
Product mixing
Docking
Service
Protection against contingencies.
Types of Warehouse
• General warehouse
• Specific warehouse
• Bonded warehouse
• Bulk storage warehouse
• Refrigerated warehouse
Characteristic's of an ideal Warehouse
◦ Convenient location
◦ Availability of mechanical appliances to load and unload goods
◦ Adequate space
◦ Cold storage facilities
◦ Proper arrangement for protection
◦ Sufficient parking space
◦ Round the clock security arrangement
◦ Fire fighting equipments.
Warehousing Strategy
An integrated warehouse strategy focuses on two questions.
The first concerns how many warehouses should be employed.
The second question concerns which warehouse types should be used
to meet market requirements.
For many firms, the answer is a combination that can be differentiated
by customer and product.
Specifically, some customer groups may be served best from a
Centralized Warehouse, while a Decentralized Warehouse may be
appropriate for others.
Warehouse Location
• Centralized warehouse
• Decentralized warehouse
Centralised Warehousing
Benefits:
1. It improves operating efficiency and inventory control is felt
easier and effective.
2. There is no need to carry large stock and there are no dangers of
stock outs resulting in low level inventories.
3. Transport facilities are optimally used as routing and scheduling
becomes handy.
4. The firm is better placed to meet the demand fluctuations from
different market segments at relatively short notice.
Drawbacks:
1. It results in loss of customer service due to spatial considerations and
delays are caused.
2. The firm is deprived of its potential market share.
3. It results in heavy transportation costs.
Decentralised Warehousing
Benefits:
1. The firm serves the customers better positioning the inventory in their
proximity. This is the result of maximum time utility created by it.
2. The firm is likely to effect savings in freight charges because of bulk
handling.
3. It facilitates product movement by block rates
Drawbacks:
1. It adds to the administrative cost as the firm is to manage number
of warehouses distantly located with the acute problem of
maintaining high level efficiency.
2. It calls for heavy investment as the firm is to hold inventory at
different locations in larger lots.
Warehouse Management
A Warehouse management system (WMS) is a database driven computer
application, to improve the efficiency of the warehouse by directing cutaways
and to maintain accurate inventory by recording warehouse transactions. The
systems also direct and optimize stock based on real-time information about the
status of bin utilization.. It often utilize Auto ID Data Capture (AIDC)
technology, such as barcode scanners, mobile computers, wireless LANs (Local
Area Network) and potentially Radio-frequency identification (RFID) to
efficiently monitor the flow of products. Once data has been collected, there is
either batch synchronization with, or a real-time wireless transmission to a
central database. The database can then provide useful reports about the status of
goods in the warehouse.
Centralized Warehousing in Pharmaceuticals
Pharmaceuticals require highly reliable and safe storage spaces as they are temperature-sensitive
and require an environment where temperature range can be pre-defined to accommodate the
specific qualifications of the cargo. As Indian pharma companies seek opportunities to supply
drugs to the global market, more developed cold-chain management practices will be required to
maintain their competitiveness in the market. Some of the companies have either set up their
own cold storages or have outsourced it to specialised 3PLs.
For example,
1) Eli Lilly in India have implemented initiatives such as having their own vehicles equipped
with cold-chain management systems. Other companies such as World Courier have developed
cold-chain management models to help pharmaceutical companies maintain the cold chain.
2) Nomeco’s (Nomeco – Healthcare Logistics) planned regarding establishing Northern
Europe’s largest pharmaceutical warehouse. It will be a central warehouse for the
international pharmaceutical industry throughout the Nordic countries. The
pharmaceuticals typically come from the south and must be distributed further north, and
our new warehouse is therefore located naturally by the entry point to the Nordic
countries.
References
Building Warehousing Competitiveness – A Report by PWC (Retrieved 7 July
2016).
Ghiani G, Laporte G, Musmanno R (2004), Introduction to Logistics Systems
Planning and Control. John Wiley & Sons, England.
www.nomeco.dk (Retrieved 7 July 2016).

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CENTRALIZED WAREHOUSING

Performed by storing products in the warehouse till delivery to ultimate

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