OBJECTIVES AND POLICIES OF CGMP
INVENTORY MANAGEMENT AND
M PHARM 1ST SEMESTER
DEPARTMENT OF PHARMACEUTICS
IMPORTANCE OF CGMP
POLICIES OF CGMP
ECONOMIC ORDER QUANTITY
IMPORTANT TERMS RELATED TO THE
TECHNIQUES OF INVENTORY CONTROL
CURRENT GOOD MANUFACTURING
CGMP refers to the regulations given by the USFDA under
the authority of Food Drug and Cosmetic act
CGMPs provides the system that assure proper design,
monitoring, and control of manufacturing processes and
This assures the identity strength, quality and purity of drug
products by requiring that manufactures of medications
adequately control manufacturing operations.
TITLE 21 of Code of federal regulations (CFR) -
Food Drug and Cosmetic Act
process is packing and
holding of drug.
• Current GMP for
IMPORTANCE OF CGMP
It prevents the incidents of product mix up, contamination,
deviations, failures, and errors which assures that the drug
products meet the required quality standards.
It assures that the drugs are manufactured under good
conditions, equipment is properly maintained and
calibrated, by who are qualified and fully trained and
processes that are reliable and reproducible
OBJECTIVES OF THE CGMP
Ensure that products are consistently manufactured and
controlled to the specified quality.
Concerned with all aspects of production and quality
In the manufacture of cosmetic products of specified
Ensure that the consumer receives products of specified
CGMP regulations assures the identity, strength, quality,
and purity of drug products
CURRENT GMP POLICIES
Section 1: PERSONNEL
There shall be an adequate number of personnel at all levels
having knowledge, skills and capabilities relevant to their
assigned functions, in good mental and physical health to be
able to execute their duties.
The organizational structure of the company shall be such
that the production and the quality assurance are headed by
different managers like quality control manager, production
control manager etc.
All employees who are engaged in the manufacturing
activities shall be trained properly that the employees
perform in accordance with the principles of Current Good
Section 2: PREMISES
The premises for manufacturing shall be of suitable size,
design, construction and location to facilitate proper
operation, cleaning and maintenance.
The individual working areas shall be adequate so that
any risk of confusion, cross-contamination will
adversely affect the quality of drugs and devices will be
Production areas shall be ventilated with air control
Avoid exposed overhead roof joints, pipes and ducts.
The condition of buildings shall be reviewed regularly,
and repaired where necessary
Section 3: EQUIPMENT
Equipment used in the manufacturing of drug products
shall be of appropriate design and construction, adequate
It should be properly installed in order to assure product
quality and process reproducibility and to facilitate its
cleaning and maintenance
Equipment shall be subjected to regular maintenance
checks at appropriate intervals to prevent malfunctions or
Written procedures shall be established and followed for
maintenance of equipment.
Validation shall be conducted following a Validation
Section 4: SANITATION AND HYGIENE
The sanitation and hygiene program cover personnel,
premises, equipment and apparatus, production materials
and containers and anything that could become a source
of contamination to the product.
It should be validated and periodically assessed to ensure
that the effectiveness of the operation
Direct contact shall be avoided between the operator and
raw materials, intermediate or bulk products.
Records of cleaning, sanitizing, sterilization and
inspection shall be maintained.
Section 5: STORAGE OF STARTING AND PACKAGING
MATERIALS AND FINISHED PRODUCTS
Materials shall be stored in an order to prevent any risk of
mix-up or contamination and to facilitate inspection and
The materials shall be stored under suitable environmental
All raw materials, packaging materials, intermediate and
bulk products returned to storage areas shall be properly
documented and reconciled.
Rejected raw materials and packaging materials shall not
be stored together with approved materials
The First Expiry First Out system (FEFO) on approved raw
materials shall be used.
Section 6: PRODUCTION
Production shall follow defined procedures capable to
provide assurance that drug products to conform their
Manufacturing facilities and methods shall be designed
to prevent cross-contamination.
The presence in a drug product of any contaminant is
A batch and/or lot numbering system applied to a
processing state and finished product
Section 7: PACKAGING
Packaging operations shall be performed under strict
control to protect the identity, integrity and quality of the
All packaging operations shall proceed in accordance
with a SOP.
Coding of components shall take place in an area
isolated from other packaging operations
Written in-process control procedures shall be followed.
Section 8: FINISHED PRODUCT QUARANTINE AND
DELIVERY TO WAREHOUSE
Finished product quarantine is the last point of control
before the product enters the warehouse and available
for distribution to the market.
Strict controls shall be maintained to ensure that the
product and its packaging records meet all specified
requirements before release to the warehouse.
Written procedures should be maintained for the transfer
of finished product into the quarantined area, and
subsequent transfer to the finished goods warehouse.
Section 9: QUALITY CONTROL
Quality Control is an essential part of Good
Manufacturing Practices to provide assurance that the
products will be consistently of a quality appropriate to
their intended use
An independent quality control unit shall be established.
A quality control system shall be developed to ensure
that finished products contain the correct materials of
specified quality and quantity and are manufactured
under proper conditions following standard procedures.
Quality control involves all analytical functions
conducted in the laboratory, including sampling,
inspecting and testing of starting materials, intermediate,
bulk and finished products
Section 10: DOCUMENTATION
Documents shall be prepared and designed carefully for
easy, correct and effective use.
Documents shall contain records of activities within
production, quality control, equipment maintenance,
warehouse, distribution and other specific activities
related to Good Manufacturing Practice
A master production document should include the
product name, dosage form, strength and description,
the writer’s name and department, name of verifier and
list of document distribution.
Batch Processing Record
Master packaging procedure
Section 11: SELF INSPECTION
The purpose of self-inspection is to evaluate the
manufacturer’s compliance with Good Manufacturing
Practices on all aspects of production and quality control.
Self-inspection shall be performed routinely and corrective
actions shall be implemented.
A team consisting of personnel who can evaluate the
implementation of Good Manufacturing Practices
objectively shall be appointed.
The procedure and record for self-inspection shall be
Section 12: GUIDELINES FOR HANDLING OF
PRODUCT COMPLAINT, PRODUCT RECALL AND
OR RETURNED PRODUCT
A product complaint and report may relate to the
quality, adverse reaction or other therapeutic effect of
A follow-up action shall be taken after investigation and
evaluation of the product complaint and report
A product recall is a process of withdrawing one or
more batches or all of a certain product from market
A returned product is a finished product which is
already in distribution and returned to the manufacturer
due to complaint, damage, expiration, validity or other
INVENTORY MANAGEMENT AND
Inventory control is the process by which inventory is
measured and regulated according to predetermined norms
such as economic lot size for order or production, safety
stock, minimum level, maximum level, order level etc..
Inventory means all the raw materials, semi processed
materials, semi processed materials and finished goods
Inventory management is essential to maintain a large
size inventory for smooth and efficient production and
also for sales operation
To minimise the possibility of disruption in the production
schedule for want of raw materials, consumables, spares and
other store items.
To keep down the capital investment in inventories.
To ensure adequate stock of finished product to meet the
deliver requirement of the customer.
To reduce the loss due to changes in prices of inventory
To facilitate the intermittent production of several products on
the same facility.
To stabilize employment and improve labour relations by
inventory of human resources and machine efforts.
OBJECTIVES OF INVENTORY
Minimise the carrying cost of the materials.
Maintenance of sufficient stock of materials to take care of
the requirement during the period of short supply
Maintenance of sufficient stock of finished goods for smooth
Protect the inventory against deterioration, obsolescence and
To keep the inventories as low as possible which leads to
consistent price of market conditions.
Maintain the proper records and assess the stock position of
FUNCTIONS OF INVENTORY
• cost of ordering the item
Expenses from raising the indent, Purchase
requisition by user department till the execution
• Costs incurred for holding the volume of
Obsolescence cost, Deterioration cost, Taxes on
inventory, Capital cost
• Loss due to non availability of material
• Break down/delay in production, lost sales, loss
of service to custom
ECONOMIC ORDER QUANTIY(EOQ)
It is the technique of ordering materials whenever stock
reaches the reorder point.
It deals when the cost of procurement and handling of
inventory are at optimum level and total cost is minimum.
In this technique, the order quantity is larger than a single
period’s requirement so that ordering cost and holding cost
S- cost of placing the order
H- annual holding and storage cost per unit of inventory
Minimum stock level
Maximum Stock Level
Lead Time(servicing lead time, Supplier’s lead time)
TERMINOLOGIES RELATED TO
TECHNIQUES OF INVENTORY CONTROL
Always Better Control
Based on the annual inventory values
PROCEDURE FOR ABC ANALYSIS
List of all materials used in the
Work out their annual
consumption value and money
Multiply each item’s annual value
by its money value
Arrange the items in the
find out each item’s percentage of
the total inventory
It ensures the better control over costly items
It helps in developing scientific method of controlling
It helps in maintaining the stock in a better way
It helps in reducing the storage cost
It helps in maintaining enough stocks of group A, B, and
ADVANTAGES OF ABC ANALYSIS
Inconvenient to compute when items are in large
More chance of deterioration of item of class C when
it is purchased in bulk
Loose control on C items causes shortages
Focuses on money value and not on functional
importance causing shortage of critical items
Does not consider variation of prices with time
DISADVANTAGES OF ABC ANALYSIS
Based on the utility of the materials.
• V belts
• Anti malarial
• Flow meters
• Stand by
COMBINATION OF ABC AND VED ANALYSIS
CATEGORY V- ITEMS E- ITEMS D- ITEMS
A. ITEMS Constant
nil stocks, AD
B ITEMS Moderate
C ITEMS High stocks,
Based on the quantity, the rate of consumption, pattern of
issues from stores
• Actilase injection
Based on their unit cost
Based on the value of inventory of materials
• High stock value
• X ray film, blood bag
• Medium stock value
• ECG recording paper, fistula needle
• Low stock value
• ECG jelly, syringes
Based on the availability and nature of
Based on their availability of the item or the length of its
Based on the seasonality of items
How to practice GMPs by P.P Sharma, pageno.105-284
Current Good Manufacturing Practice Guidelines for
drugs available at https: www.wipo.int>laws
Inventory control and management by C. D. J waters.
Methods of inventory control available at http://www.
Tom Jose V, Akhilesh Jayakumar, et.al , analysis of
inventory control techniques, International Journal Of
Scientific And Research Publications, Volume 3
strong quality managements, obtaining appropriate quality raw materials, detecting and investigating product quality deviations and maintaining the reliable testing laboratories.
registered qualified pharmacist or any other related profession, experience, duties and responsibilities of all employees shall be clearly defined,
. Doors that lead from production areas directly to the outside, e.g. fire exits, shall be secured against contamination
Avoids the cross contamination, alter the strength, safety, identity, quality, or purity of the product , sops
apparent illness or open lesions that may adversely affect the quality of products shall not be allowed to handle raw materials, packaging materials.separate clothing
checked for proper identity, condition of container and approval of quality . Proper records
packaging materials, intermediate products and bulk products which are approved by quality control can be dispensed.
Total annual cost=annual purchase cost+ annual holding cost+ annual ordering cost
The stock level at which an order should be placed. . Over stocking of goods . time interval between the placing the order for the materials are actually received in the stores, : Excess usage requirement during normal lead time
cover 10% of the total inventories and consumes about 70% of total budge trequire strict monitoring and maximum follow up,
safety stocks or low safety stocks
in controlling and maintain the stock of various spare parts or raw materials
the issues of items in past two or three years are considered. The last date of receipt of the items or the last date of the issue of items whichever is later is considered. helps to avoid investments in non-moving or slow-moving items. helpful in facilitating timely control.
Similar to abc analysis instead of consumption, listed in the descending order of unit value and is up to the management fix the limits for 3 categories.
Study taken up once ina year during annual stock taking, calculated by dividing an item’s current stock value by the total stock value, helps in identifying the items which are extensively stocked10% number of items are stored, accounting for 70% of the total inventory value
The nature of the suppliers will determine the quantity and continuity of supply, lead time payment terms and clerical processing cost and time
to buy seasonal items at low prices and keep inventory or buy at high price during off season.