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So much has already been invested by life sciences companies by the time a new drug or product goes into production and out into the market. It will have taken many years of financing, developing, trials and evaluation to get to the point where the purest and safest version of that product is ready for use by patients. As such, the processes followed in warehouse operations to manufacture and supply the finished product, are absolutely key to its successful rollout and distribution.

It is essential that warehouse operations follow GxP rules, a collection of quality guidelines and regulations created to ensure that bio/pharmaceutical products are safe, meet their intended use, and adhere to quality processes during manufacturing, control, storage, and distribution. In this instance, the ‘x’ refers to Good Warehouse Practice or GWP.

Depending on the scale of the business, either SAP WM (Warehouse Management) or EWM (Extended Warehouse Management) will help the business adhere to the relevant quality and regulatory GWP requirements.

Typical Warehouse Operations Involve:

  • Receiving stock from external suppliers and the managed placement of stock in the warehouse
  • Picking and staging materials for production use
  • Receiving surplus materials returned by production and its placement on racks for future production requirements
  • Receiving the manufactured intermediate bulk materials and finished products and placing them on racks
  • Picking, packing and loading stock on to trucks or containers as per sales and distribution orders
  • Storage racks and bins management
  • Physical inventory counting adjustments and stock reconciliation
  • Writing off and scrapping the damaged and expired stock out of inventory

The Starting Point

GWP begins with the delivery and receipt of APIs (Active Pharmaceutical Ingredients), other raw materials or packing components like bottles, caps, cartons, pumps, blisters, vials, seals; it will also deal with other non-production items like lab reagents.

The external vendors who supply the materials used in production must be approved by the relevant authorities and stock should be supplied with correct batch numbers. When the stock arrives at the manufacturing site, the warehouse carries out a thorough visual inspection, verifying it against the delivery documents before accepting it into the warehouse.

All the stock needs to be segregated as per batch numbers and packed on to unique storage units or HUs (Handling Units) labelled with a unique identification number.

The Importance of Labelling

An HU is a physical unit consisting of packaging materials and the goods contained on or in it. Each HU needs to be labelled containing information like SKU number, batch number, quantity if required and most importantly, the SSCC (Serial Shipping Container Code).

The SSCC number is the GS1 Identification Key used to identify a logistical unit. This unique identifier is comprised of an Extension Digit, a GS1 Company Prefix, a Serial Reference, and a Check Digit. The SSCC number forms the unique ID of each HU, following GS1 EAN 128 standards. The SSCC number on the label will help to ensure that all warehouse operations such as the receiving, storing, picking and staging of materials adhere to GWP.

Having these SSCC numbers barcoded on the labels enables staff to scan the HUs using mobile handheld RF (Radio Frequency) scanners that can perform the tasks in real time, or with Bluetooth based barcode readers. The scanning of a barcode takes away the chances of manual data entry errors and ensures accuracy and efficiency at every stage of the warehouse operation.

Efficient Packing and Traceability

The way stock is packed on the HUs is vital to ensure the rest of the warehouse operations run smoothly, reducing the chance of errors. Due to the nature of the life sciences industry, the batch or batches of stock will have stringent parameters around things like potency and expiry date, so it is important that a different batch or batches are not mixed in an HU at any stage of the packing.

There may however be instances when it is essential for multiple batches to be stored together; if the materials come in multiple boxes, drums or bags and have similar or equal quantities, the individual boxes, drums or bags can be packed as individual HUs identified with their own unique SSCC, then grouped together and packed on to another higher-level HU in a nested format.

In the life sciences industry, APIs will normally be packed in multiple drums or bags on a pallet and often unique samples will be drawn from each of individual package for quality tests. In these situations, the nested packing will ensure accurate identification of sample sources.

Stock Storage & Placements

The effective design and build of storage within a warehouse can directly impact the efficiency and accuracy of the way a warehouse operates. The physical structure of the storage could be formed of high racks with bins for standard single pallet storage, bulk storage in aisles or push-back storage for multiple pallets or even open floor storage.

Storage spaces can be grouped together into different zones and depending on the number of pallets in a batch, the volumes required for production and the types of materials they contain, different storage strategies can be applied and an appropriate area can be allocated for each material in any group.

This will help to automate the determination of storage destinations and the warehouse will be efficiently used, eliminating redundant pallets and unnecessary movements of stock.

Structuring and naming the storage spaces in proper aisles, levels and locations plays an important role in managing the warehouse efficiently and strategically during stock placements. Having the storage location name in a barcode format and enabling scanned verification will eliminate misplacement of pallets and enable accurate stock-taking.

Picking Stock – Time is of the Essence

It is important that the materials are supplied according to production requirements in a timely way, neither too early as space may be unavailable in the production area, nor late to avoid shortages in the production process.

In the same way, the timing of picking for shipments is driven by multiple factors such as the arrival of containers or trucks, additional packing requirements or the need for thermal packaging; as such, picking stock for shipments needs to be done accurately, efficiently and on time, avoiding manual errors.

Consolidating the picking of products from multiple sales orders or production requests allows for greater efficiencies within a warehouse; the operator can group the orders together from each zone or area, making the process quicker. Using handheld RF or Bluetooth scanners, the operators can verify the HUs SSCC barcode to eliminate picking errors.

Having the bin location names built into the racks will help to sort and order the pick requests, starting from one end of the racks to other end, so that the operators do not need to travel up and down or around the aisles between picks.

An optimal quantity of materials that are most frequently used in production can be stored in aisles closer to the entrance to the production area and finished products can be stored closer to the shipment and despatch preparation area. The picking strategy can then be set to look out for these areas, drastically reducing the supply to production or despatch duration.

An automated process can be setup to replenish the production picking storage racks with a defined batch size whenever the stock levels reach below a certain point. In most of the cases, materials will be picked for either production or despatch in full pallets but a few will need to be picked in partial quantities; having storage segregated for full pallet picks and partial quantity picks will improve the overall efficiency of picking operations.

Any surplus stock remaining after production is complete can be retained in the production area to avoid movement back and forth to the warehouse. However, if there are space constraints in production and there is a reasonable quantity of excess material, it is always better to return the stock to the warehouse and request it back again when required, rather than scrapping or writing it off.

The warehouse should try to add the returned stock to the top of existing homogenous stock on the racks wherever possible; alternatively, store them separately and mark them as priority stock when picking for the next production requirements. The picking strategy should be set to prioritise the first expiring, smaller quantities as this will eliminate the stock ending up in multiple smaller quantities and getting ignored, becoming expired or ultimately scrapped.

The All-Important Inventory

Keeping warehouse stock in line with any ERP system is one of the most important aspects in achieving the highest levels of efficiency, accuracy and competency, both for production and distribution.

This involves frequent and regular stock taking across both the warehouse and within the production areas. Production areas should be regularly checked, and line clearance managed strictly, to avoid any inventory or manufacturing impacts. Any areas of frequent inventory differences, which can occur particularly in areas such as dispensaries, receipt & sampling areas and shipping areas must be investigated, analysed and understood to ensure that processes are put into place to eliminate them.

Inventory counting in a warehouse can be done as a continuous activity, happening throughout the year, starting at one end of the warehouse to the other and repeating regularly. A specific number of aisles, levels and locations can be selected for each inventory and continued with the next set and so on.

When the physical stock in a warehouse is an exact match with system stocks, the chances of quantity mismatch, delays and errors during picking for production or shipment will be eliminated. The continuous inventory method is more desirable than a wall-to-wall count because it does not require all movements to stop, thus keeping the operation running.

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Sivakumar Kandasamy

Senior Consultant

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