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Trends in warehousing in the healthcare and pharma sectors

We recently contributed to an article in Logistics Manager and thought it would be worth sharing some of our insight into trends in warehousing in the healthcare and pharma sectors

As a result of economic and price pressures, distributors of pharmaceutical and healthcare products are adapting to two primary trends, which occur depending on the types of goods being distributed. Pharmaceutical distributors involved with niche products e.g. specialist drugs or healthcare items and veterinary products, are typically holding much smaller stock quantities in their distribution centres with manufacturers increasingly making to order in smaller production runs.


Neither distributor nor manufacturer wants to be holding large volumes of stock and tend to manage their balance sheets according to having days rather than weeks of available stocks or an entirely stockless model whereby goods are shipped only to order.  Additionally, tying money up in finished goods limits the resources available for R&D, again providing another reason behind the trend for pharma companies to stock fewer items. On the other hand, distributors of high volume consumer healthcare products and generic drugs for example, will be continuing to ship high volumes as before, although they are also likely to be trying to reduce the levels of stocks held because of the impact this has on their profitability and available resources.


Having smaller stock deliveries more frequently means put-away processes have to be very well structured. Distributors rely on a sophisticated Warehouse Management System (WMS) that can operate in accordance with FDA guidelines and ensure that every item is correctly and safely stored and can be located quickly. For example strict guidelines must be followed to comply with regulations for storing allergens and preventing product contamination.


The warehouse of the future will be smaller and be adapted to store small quantities of a very diverse array of products, operating with a faster throughout and turnaround time. It will be equipped with scanning equipment to identify whether products coming into the facility are genuine and prevent counterfeiting. Pharma and healthcare products are increasingly reliant on serialised identification using a unique identifier on every pack. In the future, distributors will have a responsibility to ensure that any products coming into a warehouse are genuine and to help block the trade in fakes because the majority of counterfeit goods enter the supply chain through distribution channels where they are substituted for authentic goods or sold in addition to genuine items.


The onus will be on the distribution provider to provide this additional feature as an additional service and quality guarantee. Warehouses are also becoming much busier as organisations with larger warehouses are bringing in additional 3rd party products to mitigate their costs in addition to having more frequent and smaller deliveries.


To discover how Indigo can help your healthcare or pharmaceutical warehouse or distribution centre to become more efficient please contact us.

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