Warehouse Management In Pharma: Beating the Bullwhip Effect

Pharmaceutical warehouses have been urged to step-up to their duty of curing the pharma supply chain of disruptions. This stemmed from recent research on the distribution of antiretroviral (ARV) medication in South Africa

In their study on the supply of ARV, a therapy used on a long term basis to sustain a good quality of life for patients with HIV or AIDS, Mamolise Mokheseng, Gideon S. Horn and Aileen G. Klopper rightly asserted that pharmaceutical warehouses need to seize their responsibility to contribute to ‘proper supply chain planning and design processes;[ improve] inventory management and warehousing practices; [implement] more effective and reliable distribution and transportation processes [and improve] supply chain coordination and overall communication.’

Communication and visibility

In the study, substandard inventory management along the chain was caused by poor levels of communication amongst stakeholders. The majority of respondents in the study (just over 60%) revealed there weren’t any meetings held to share information about medicine distribution between the warehouse, hospitals and clinics. This had a large impact on slowing the process of accessing information on order lead times and delivery dates and as a result this skewed the order cycle.

Hospitals and clinics in the case study failed to consistently order stock according to official policy - be that a fixed order quantity approach or a fixed order interval approach.

Around 36% of respondents noted that delays in transporting the stock to hospitals were because the medicines were not available at the warehouse. Another 32% of the base noted lack of staff at the warehouse was the issue. Late medicine requests caused delays only in a minority of cases.  

Some hospital members in the study were concerned at the status of the stock received from the warehouse, with some being damaged or experiencing a break in the cold chain storage requirements. This disruption in the supply chain illustrates that efficiency in medicine distribution hinges on how successful a warehouse is.

Considerations for warehouse selection

In their recommendations, the authors of the research noted pharmaceutical warehouse staff need to be trained on the gravity of stock management and tracking practices, with records being kept on any failures in stock management. Electronic stock-sheets or stock registers should be used to swiftly retrieve information, manual stock-cards are only advised for use in power emergencies.

Pharma and biotech firms should ensure warehouse management systems are used in their supply chains to optimise inventory management and ensure the consistent availability of stock. These systems reduces the risk of human error by providing real-time intelligence on storage restrictions and guidelines on temperature and humidity requirements. Algorithms can be applied in these systems to prevent the chances of incorrect shipments being issued and also maximise the use of expiry time.

Hospital warehouse professionals should monitor a schedule of orders and log the location of patient treatments being packaged and the whereabouts of completed orders.

Key performance indicators

Conducting preparatory quality assurance checks can help to guarantee that warehouses and other storage facilities have the appropriate amenities and operating procedures to protect sensitive drugs or clinical supplies.

Examining key performance indicators (KPIs) for local warehousing and logistics providers is the most important step to achieving success in temperature controlled deliveries, according to World Pharmaceutical Frontiers.

Companies can request KPIs spanning a period of two years to learn more about the likelihood that a local firm can handle incoming and outgoing shipments in a timely fashion and avoid product losses. This approach can also offer an insight into the key task of temperature control and how successfully it is likely to be executed.

More guidance on selecting storage areas for medicines. 


1.       http://www.sciencedirect.com/science/article/pii/S1025984816300564
2.       http://www.warehouse-logistics.com/57/3/4009/warehouse-system-management-for-pharmaceutical-companies.html
3.       http://www.pharmalogisticsiq.com/regulatory-resources/articles/successful-cold-chain-logistics-from-europe-to-rus
4.       http://www.who.int/medicines/areas/quality_safety/quality_assurance/TS-warehouse-site-final-sign-off.pdf