Warehouse compliance can mean many different things to different people. Probably all third-party logistics (3PL) warehouses are familiar with OSHA, the Occupational Safety and Health Administration, that regulates worker safety in warehousing and other industries, but there are a multitude of independent industry compliance regulations for specific verticals in warehousing.
Warehouse compliance covers a vast array of industries—not just Hazmat—and chances are you could improve your standard operating procedures by following compliance best practices. Not to mention, getting certified by different compliance boards is a big selling point for many potential customers!
Not sure how to get started with warehouse compliance? I sat down with Sheldon Seitz, the compliance officer for Quality Distribution, Inc., for his insight and tips on compliance basics.
Sheldon: That's a loaded question because I think it depends on the type of warehousing people are trying to do. For example, within the scheme of operations we have here at Quality Distribution, we have some medical, pharma, and food warehousing that we do, and obviously those are sometimes regulated a lot more than just normal warehousing of maybe some industrial goods. Hazmat would even require perhaps some other internal requirements and regulations that are out there. So, I think what an individual would have to do or a business in the warehousing arena would need to do is identify the areas of warehousing that they do and identify the types of compliance that they want to adhere to.
Compliance is essentially about adhering to federal or internal procedures, for example, we are ISO certified. Basically, ISO certification ensures you're following your internal procedures that you have outlined and implemented. An ISO certification team will come in and audit you on what your internal processes are, what you say you're going to do, and if you are doing that.
Sheldon: Absolutely. Yes, it is. We feel like that because of the nature of what we try to do and saying that we're ISO certified, we also advertise that we're SQF certified. The SQF stands for safe, quality food. People will look for those types of certifications in making a decision whether they want to warehouse with us or not, and we can charge a premium for our warehousing services because of the certifications. But the reason we charge a premium for our services is because we have strict internal processes and not only internally, but from an independent certification body that would come in and audit us. We can say we follow those guidelines and we've passed the audits and certification process, so we're able to promote that as an additional service we can provide.
Sheldon: They would have to be committed to it internally. They would have to make the decision that they want to be able to have those certifications. Once that decision is made, they need to go through the process of contacting the type of certification body that they're going to work with. Many of them will come out and help you put into place all of the procedures that are needed to meet the certification standards so that you could have them there prior to going out and having the actual audit take place. So, they'll work with you as you're establishing your procedures and processes to become certified for a certain type of operation. Bottom line is, we feel like it's very advantageous to us and our operation and attracting customers.
Sheldon: You need to do what you say you're going to do.
In the warehousing industry, there are different types of warehousing and activities that could take place out there, and I think it’s about what type of business you want to be in. You want to identify the type of customer or client that you want to cater to. Once you've decided what that is, then you can focus on those customers that you want to attract to your business and to your warehouse. For example, we do very little industrial, like I mentioned before, most of ours is pharma, medical, and food, and we don't do anything other than that. That's the market we go after. So, I think that identifying the type of clientele that you want to cater to is a very important part of the business plan and will steer the types of certifications you might be interested in.
Sheldon: Yes, I think that would be a good thing. Just focus in on what you feel like you can do best or the market you want to go after. Certainly, having a focus and internalizing that focus with everyone within the organization becomes a very critical part of your business’ success.
However, compliance can mean many things from safety to how you receive, how you ship, how you store, how you train, what trainings you outline and do, what type of security you provide, how secure your facility is. It's a pretty broad question. Originally, as I went through some of the procedural things we might have in place or documents, each one addresses, for instance, food safety, security, cleanliness, or what we might call the sanitation program and outlines how often certain things are supposed to be done. Securing the gates at night or the building and documenting that, inspecting inbound trailers, outbound trailers, inspecting inbound product, outbound product.
But there are a lot of subcategories that that you outline in those documents, too. For example, because we're in the food industry, we handle food ingredients mostly in a bulk way. We have to have a recall procedure so if there's a customer that we work with and they've decided that they need to do a recall, we are prepared. If your warehouse services the food industry, ask yourself: do you have procedures in place for helping clients with a recall that might take place? How do you go about that?
Sheldon: On a regular basis. For example, we are registered with the Food and Drug Administration (FDA), and they sometimes just pop in. Because one of our facilities is an organic storage facility, we had an annual organic audit that took place recently. We had our SQF and our ISO audits about a month ago. We have a customer coming in on Thursday that's conducting an audit on their own product, making sure that their procedures are being followed. So, we have certification type audits, but we also have customer audits. One of the things that helps is if a customer can see that we have ISO or SQF certifications, then they're not as apt to come out and conduct their own audit on our facilities. They recognize the procedural processes of audits. External audits that the certification bodies come in and do will often be recognized by our customers so they don't have to come out and do their own.
Sheldon: Oh, it helps a lot. We're able to keep track of products, know how much product we have for a particular customer. When we go do inventories for them or if there were a recall, you're able to basically just put some parameters into the system. You're going to be able to identify that particular lot for that customer that you're looking for and be able to just go out there and make sure you have an accounting of all that product for them.
Sheldon: We think so. It just saves a lot of time. You can approach what you're doing with a lot of confidence. Having said that, though, obviously there's procedural things in place where the operators have to be able to do their jobs. You need to make sure that they're trained properly on how to use a 3PL WMS system, for example, how an inbound comes in. Do they know how to scan a product? Do they scan bar codes when they put it away? Are they trained well enough to be able to use the system so it becomes a tool and you can trust that everything that's been put in that system is accurate?
The scenario is if you've received it correctly when it comes in and you've placed it correctly in a storage location, when it comes time to fill an order for a customer, you have the confidence that the system will guide the warehouse operator to fill it properly. They can go to the storage location, and they know that when they scan that product, if it's not correct, the WMS is going to let you know that it doesn't match what that order is. So, to try and minimize mistakes, I think it’s essential in an operation. It’s the old adage, I think, where you say junk in, junk out. We have got to make sure that it's done right.
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