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GMP and the Warehousing (Development and Regulation) Authority December 10, 2007

Posted by Ramnath Rangaswamy in Blogroll, Business, Emerging Markets, India, Indian Economy, Logistics, Supply Chain.
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The Warehousing ( Regulation and Development) Bill, 2005 seeks to establish a Warehousing Development and Regulation Authority, similar to Director General Civil Aviation or TRAI.
That got me thinking about the need for a Warehousing Development and Regulation Authority? Why should there be a Warehousing Development and Regulation Authority? What would be it’s role and responsibility? This is like similar to setting up a Software Development and Regulation Authority!

After all market forces dictate the price, quality and other parameters of warehouses.

There are global standards in warehousing, the most well known being the GMP [ Good Manufacturing Practices].

What is GMP?
GMP stands for Good Manufacturing Practice. These are the global standards for manufacturing, warehousing and transportation. Here, we will talk about GMP for warehousing.

GMP covers all areas of warehousing- design, construction, fire safety, pest control, FIFO, batch control, training of warehouse team, self-inspections, safety in the warehouse, stock counts, shrinkage, truck quality etc.

What is GMP for warehousing?
Warehouse construction
GMP starts from even before you enter your warehouse. How is the approach road? Will the stocks in the truck shake and get damaged even before they reach the warehouse? Will the truck be able to reach the warehouse in the rainy season? Is there garbage outside the warehouse which might create a pest problem? Can the stocks be unloaded without the stocks getting wet in the rain? Do the roofs leak?

Warehouse Safety
Does the warehouse have sufficient safety against a fire? Are there sprinklers? Are there sufficient fire extinguishers? Is the warehouse team trained on handling fires? Is there a first aid box? Is there a first-aid team?

Pest Control
Is there a effective pest control is place? Is there evidence of pest ingress? Are the windows sealed to prevent birds from coming in?

Warehouse Stock Release
Is FIFO followed? What processes are in place to enable FIFO? Is there a process to track batches, especially for food and drugs?

Training
Are the warehouse teams well trained on the jobs they are supposed to do? How often do they get refresher trainings?

Are the teams trained in safety? Are there operators given regular refresher trainings in handling forklifts, high reach trucks?

Trucks/ Transportation
Are trucks inspected for leakages? Are they inspected for damaged flooring, nails and screws protruding out, which could damage the product?

What is the benefit for a company on following GMP standards?
Following FIFO and batch control reduces the cost of obsolescence. Ensuring effective pest control ensures that consumers get quality products, especially in the case of food and drugs.

This ensure that the consumer gets a quality product. Else, you could get worms in your chocolate or a cockroach in your aerated drink

A GMP warehouse can lead to better customer satisfaction. In the company I worked for, we took our distributors/stockists and retailers on a tour of our depot and DC. We explained to them the processes and care we took to handle the products we sold them. The distributors/stockists and retailers were impressed with the cleanliness and appearance of the warehouse, the care we took of the products we sold them, the FIFO process and the batch traceability. After the visit, product complaints from retailers and stockists reduced, we got requests from stockists to train them on warehousing/ FIFO and best of all, in the yearly customer satisfaction survey, in which we survey retailers, our scores went up!

For the warehouse operator, GMP standards could be a minimum standard. In India where warehousing quality is abysmal and dismal [ there are exceptions, of course] , warehouse rentals could have an incentive components linked to the GMP rating achieved.

What’s in it for the consumer? GMP is a basic minimum standard to ensure your consumer gets the right quality product. It could be a mater of survival!

“Customers today want the very most and the very best for the very least amount of money, and on the best terms.
Only the individuals and companies that provide absolutely excellent products and services at absolutely excellent prices will survive.”
Unknown

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Comments»

1. Ambika Chandrasekar - February 23, 2008

So, has the WDRA been established as yet? What is the status?

2. streamlinesupplychain - February 23, 2008

The WDRA has been passed by Parliament. It is awaiting the President’s signature. Thanks.

3. Srinivas Chava - April 10, 2008

Hi,

I have got a proprety near Shamshabad International Airport, Hyderabad,A.P. I wanted to develop it with your valuable suggestions

4. A.M. Raajagopal - October 26, 2009

We are looking ahead for companies which are in need of distributors or super stockists or stockists or c & f agents in Coimbatore City for any kind of food products. We are having our own warehouse around 6000 sq.ft nearby national highways (100 Mtrs).

5. smichandan - July 1, 2010

hello. i quite liked your blog.well, we are a company having 0.5 milllion sq.fts of warehouses strategically located around one of Indias major port,kandla. can you help me in suggesting any innovations or area for buliding something different which can make a difference in the style and quality of storing in India?

Ramnath Rangaswamy - July 4, 2010

Hello!
I am glad you like my blog.
Yes, I can certainly help you modify/design your warehouse so that your warehouses a class part from the others in Kandla.
I like your positive attitude and can help.
I will also pass on your email id to my friend, Srivathsa Yajaman who too could help you.
The 1st step would be to see your warehouse, see what your competitors are offering, what is the requirement of the customers and then plan the next steps.
Thanks.

smit - July 5, 2010

Hey thank you very much for your concern.
Basically, the customers of our warehouses are shipping companies. They need to store the goods that are being imported or exported. Our warehouses are as per the industry standards i.e,the height,sewage,ventilation,etc.
Our company is involved only in this business. Its a family run business. Whereas other companies who has warehouses also have some other businesses. Our primary business is Warehousing. And the rates depend on the import-export activities on the port. Companies here who hire our warehouses don’t want additional facilities but just low rates. They are ready to compromise the quality for low rates. This is what is the common mentality among companies. so during demand even the worst warehouses gets hired at market rates. This is the situation. Now our company’s mission is to offer Good quality Warehouses and attain 100% occupancy round the year. Is this approach right?

6. Ramnath Rangaswamy - July 23, 2010

Hello!
I understand your dilemma – customers want low rates, customers are not concerned about quality while you want to provide good quality warehousing for which you might have to charge a slight premium.
Since your business is only warehousing, your mission is absolutely right – offer good quality warehousing. You should be the 1st choice of customers looking for warehouses. If customers want a warehouse they should come to you first.
The choice of facilities you offer has to be carefully planned and thought. They should be facilities which customers want the most and it should be cost effective for you to provide it.
These inputs are based on my experience with Port warehouses in some other ports of India.
Thanks.

smit chandan - July 26, 2010

Thank you very much for sparing time and sharing your experiencce. we would have to think of cost effective services according to the needs of the customer. One more thing I want to discuss with you is about a Warehouse business idea. Starting a warehouse management company which takes care of the complete maintenence as well as to get it rented with some commission. Company may also take up the responsibility of building new warehouses or work on builder-owner revenue sharing pattern like in hospitality business. I just want your insights regarding this. I am 20 years of age and will take up the responsibilty of my entire family business once i complete my MBA. I am preparing for CAT too.You are an IIM-C alumunus and I have much more to learn from you.
Please keep intereacting.
Thanks.

7. Warehouse Dude from Michigan - August 12, 2010

Hey got a question about GMP, we have some stuff in our warehouse that doesn’t belong there it belongs to one of our customers, one of the pallets is two barrels filled with a food grade liquid of undetermined identity and about 7 pallets of stuff (raw materials contaminated with little bugs) that is considered no good and needs to be returned back to the vendor. Both vendors have been dragging butt and have delayed the pick up of these items. Do you know what the GMPs say about this? How long can we continue to store these items in our warehouse and stay compliant within GMP? None of the items have been quarantined and nor are they even in our system. What do you think?

8. wafa k - January 8, 2011

Hello;
I have got a question about , whate kind of the cilling GMP’s allowding to use ?

Ramnath Rangaswamy - January 24, 2011

Hello!

GMP does not specify the type or material of the ceiling. GMP only specifies that the ceiling should ensure that the material stored in the warehouse in safe.

Thanks.


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