Expanding Market of Warehouse Cleaning

[box type=”shadow” ]Growing at a rate of roughly 15% annually, the warehousing industry is looking forward to major growth in the coming years. A significant, but understated aspect of warehouse cleaning too needs urgent attention. Anu Bhambhani highlights the cleaning requirements/practices at Indian warehousing segment.[/box]

CHINA MAY be the manufacturing hub of the world at present, but with the Indian Prime Minister Narendra Modi urging the global players to ‘Make in India’, things can only be expected to go up from here in the manufacturing segment, along with the whole supply chain. Simply put, more manufacturing would mean more space required to store, package and transport products. This translates into requirement of huge warehouses. India’s traditional godowns with little or no maintenance have already evolved into modern warehouses categorized neatly into industry specific segments.

According to a 2013 Ernst & Young (EY) report on The Indian Warehousing Industry: An Overview, the Indian warehousing industry (across commodities and modes) is pegged at about `560 billion. This does not include inventory carrying costs which would amount to another `4,340 billion. The report states that the industrial/retail warehousing accounts for 55% of the total market share with cold stores comprising 16%, Agro warehousing making up 15% of the share and Container Freight Stations (CFS) and Inland Container Depots (ICD) taking on the rest 14%.

Warehousing accounts for roughly 5% of the Indian logistics market. A massive industry as this, it is only imperative that cleaning and maintenance make up a significant part of it. Like any other big industrial set-up, warehousing too requires a dedicated set-up for its cleaning and maintenance services. While some warehouses prefer to outsource their cleaning, others do it on their own by investing in equipment and processes. The realization that warehouse maintenance is as important as in other commercial entity is slowly dawning too. But, how receptive are businesses to the idea? What are the challenges facing this burgeoning industry segment? Clean India Journal spoke to some leading cleaning and material handling equipment suppliers to find the answers.

Importance of a cleaner warehouse

Warehouses can be broadly classified under three categories namely, liquids and non durable, solids and durable, and agriproducts which includes vegetable/grain storage. The last category can be further separated into cold storage and containers. Nowadays, most owners of warehouses realize the importance of having clean, spic-and-span interiors and green and clean exterior. The huge amount of products going in and out of the warehouse would automatically translate into dust, debris, dirty floor, soiled racks, and the like. Movement of huge equipment in the premises may mean tough stains on the floor. Regular cleaning ensures the inventory is safe and there is a little chance of it getting damaged or lost or being infested by pests. Employee’s health and safety are also to be addressed. 

Sunil Kapoor, Country Manager, Nilfisk India Private Limited, broadly categorizes the kind of cleaning applications needed in a warehouse. These include floor sweeping, dust collection, spillages collection, removal of dirt and floor care. These basic applications can find solution in the form of sweeping machines, vacuum cleaners, high pressure cleaners and centralized vacuum cleaning equipment. He explains, “Oil spillages and tyre mark from forklifts etc, require aggressive and regular cleaning. Any delay in attending to this need often leads to a dense dirt accumulation. In warehousing management, material movement is the top priority hence cleaning cycles are escaped or at times unattended. Focus is on mainly material handling equipment and storage accessories. Hence proper identification of the cleaning equipment gets overlooked.”

[box type=”shadow” ]“Modern warehouses are welcoming right mechanised cleaning solutions, particularly when it concerns handling of goods which are fine in nature and need to be preserved under hygiene conditions. Now we have to propagate the idea of mechanised cleaning for warehouse depending upon the type of warehouse and product category.”

– Sunil Kapoor[/box]

 

Apart from general cleaning, various categories of warehouses need customized cleaning solutions. So, FMCG would have its own specific requirement to keep its non-durable products as liquids, processed foods, toiletries, and others, hygienically. Similarly, warehouses housing agri products like food grains or the CFS/ ICDs that house imported or exported goods before they are cleared for dispatch by the customs department, or even the electronic goods warehouse where the constant battle is to have a fungus and humidity free environment, all these have their varying needs and the cleaning industry claims to have solutions to most of these problems with their specialized equipment. Products like scissor lifts and aerial maintenance platforms for hard to reach areas as the high ceiling, wet and dry vacuum cleaners for spillages collection, high pressure cleaners for removal of dirt, scrubber dryers that can easily be manoeuvred between racks and large open areas, pressure washers and so on and so forth, are major requirements for any big structure like a warehouse for efficient cleaning.

 The equipment also becomes important to keep the warehouse safe from any accidents. Spillage from chemicals if not cleaned properly may lead to fire. Most warehouses have special flooring which is resistant to such strong products. Maintaining these floors is also important in the long run which can be ensured with the help of correct cleaning supplies and equipment used. Warehouses have their standard operating procedures (SOP) that help them maintain this big property on a daily basis. However, how big is cleanliness a part of it, is something that is really subjective.

There are many who prefer hiring regular maintenance staff for manual cleaning of the warehouse, but refrain from investing in big machines and equipment.

Nirav Doshi, Managing Director, Nido Machineries Pvt Ltd elaborates, “Many warehouse operators still think that it is cheaper to employ labour for manual cleaning. They often ignore implementing the cleaning standards which leads to unhygienic working condition, lesser efficiency among workers, absenteeism and less profitability. Proper awareness is required to make them realise about the importance of automated cleaning that can produce better safety, efficiency and profitability.”

Investment not significant

A 2011 Price water house Coopers study in collaboration with the CII Institute of Logistics titled Building Warehousing Competitiveness cites absence of standardized operating processes and procedures at warehouses as a key challenge that limits their potential for growth. Nevertheless,
Sumeet Bansal, DGM – Marketing & Sales at Godrej & Boyce Mfg Co Ltd., believes the investment on cleaning equipment is not significant in terms of total investment on warehouses. He explains, “Racks, warehouse equipment, floor and land cost constitute major cost. The challenge is most of 3PL companies do not invest in correct cleaning solutions and end up buying small electric or manual cleaning equipment.” Cost is a major consideration when it comes to spending money on cleaning supplies for warehouse owners/managers. Adds Bansal, “Investment on racks and flooring runs into crores. One material handling equipment for high rise warehouses costs about `30 lakh. One needs to have 2-3 units for average size of warehouses.” He suggests 3PL (third party logistics) companies spend on medium ride on scrubbers which help them clean warehouses quickly and if required multiple times a day, depending on the size of the warehouse.

[box type=”shadow” ]“Most of the companies dealing with warehouse cleaning equipment are import driven. Due to regular fluctuation in the value of Indian currency, it becomes difficult to fix a standard price for the warehouse cleaning equipment.”

– Nirav Doshi[/box]

 

However, Bansal does feel it is a relative calculation. According to him, cleaning equipment are comparatively low priced. “If one evaluates between manual and low ticket cleaning equipment then spending on correct cleaning machines would look significant.”

While this may act like a quick-fix solution, it is needless to say a large warehouse would need more attention to maintain the quality of goods stored and for the long life of the entire infrastructure.

Cleaning industry offering innovative solutions

Warehousing cleaning is facing several impediments like lack of trained cleaning professionals and interest in cleaning itself. There is also absence of understanding of actual needs of warehouse cleaning, which according to Doshi, makes some warehouses end up buying equipment meant for commercial cleaning. He also stresses a major point, “Most of the companies dealing with warehouse cleaning equipment are import driven. Due to regular fluctuation in the value of Indian currency, it becomes difficult to fix a standard price for the warehouse cleaning equipment.”

[box type=”shadow” ]Flipkart is planning to build a network of 80 to 100 fulfilment centres across all states with special focus on tier II and tier III cities.[/box]

Yet, things are getting better. Technological interventions and innovations are paving the way for helping warehouses cut down their costs in the long term. The cleaning industry suppliers are working towards introducing such solutions. Bansal shares an innovation his company has introduced which is a Tennant patented technology called ec-water. It eliminates the use of chemicals to clean floors by converting water into charged ions. This, while helping warehouses increase the life of their floors, also rids out buying and ensuring space to store chemicals. The returns will be easily visible in ‘less than two years’, informs Bansal.

Bansal opines, “The implementation of GST can be a big boost for warehouse segment as a whole. The average warehouses are currently 80K–1L sq feet. With GST, it should go up to average of 3-4L sq feet. Depending upon material handling equipment being used either these warehouses will go for multiple medium ride on scrubbers or couple of large ride on scrubbers.”

More takers for cleaning solutions

[box type=”shadow” ]“The challenge is, most of 3PL companies doesn’t invest in correct cleaning solutions and end up buying small electric or manual cleaning equipment.”

– Sumeet Bansal[/box]

A typical warehouse is a big, high, very hot and dusty structure which cannot be cleaned with regular cleaning. Sophisticated, smart solutions and trained human resource are prerequisites for this kind of specialized cleaning. Doshi believes that warehouse cleaning industry in India is still in its early stages of development, considering the size and potential of the market and also taking into account that many warehouses and distribution centres still rely on manual cleaning methods. Yet, the situation is not all that bad. His company has sold over 60 bigger units in a duration of one year, mainly in Western and Southern India. He shares, “When you consider an average of 5 big cleaning units a month from a new comer in the cleaning industry, it just goes to show the need and demand for warehouse cleaning solutions and equipment.”

[box type=”shadow” ]Flipkart will invest over $500 million on warehouses with investment on logistics going up in the next few years.[/box]

For Bansal’s company, warehouse as a segment contributes 20-25% of its annual sales revenue, while Kapoor of Nilfisk states that his company is at present doing a business of roughly 6% to 7% of its overall Floor Care business through sales of equipment to warehouses. According to Kapoor, “Modern warehouses are welcoming right mechanised cleaning solutions, particularly when it concerns handling of goods which are fine in nature and need to be preserved under hygiene conditions. Now we have to propagate the idea of mechanised cleaning for warehouse depending upon the type of warehouse and product category.” While the unorganized sector will continue to dominate, accounting for around 90% of the industry by 2015, of the organized sector, the industrial segment will constitute a higher share of warehousing demand, viz. engineering, pharmaceutical and electronics goods. With the government taking initiatives to pump in more money in the form of FDI, Make in India and Indian companies collaborating with their foreign counterparts, the cleaning industry too is evolving from a labour-led industry to a technology-led industry, opines Doshi.

The Indian e-commerce industry is also expected to create more warehouses for its growing business needs. The daily newspaper DNA India reported on October 30, 2015 that Indian e-commerce giant Flipkart will invest over $500 million on warehouses with investment on logistics going up in the next few years. It is planning to build a network of 80 to 100 fulfilment centres across all states with special focus on tier II and tier III cities. Flipkart has 17 warehouses in India, while its rival Amazon has 21 warehouse centres here and Snapdeal has 63 fulfilment centres in the country. Warehouse, fulfilment centre, distribution centre, call it what you will, the fact is cleaning industry is up for major overhaul.