The COVID-19 pandemic has tested the resilience of institutions, processes and systems across all industries and geographies, including the pharmaceutical supply chain. Escalating cold chain supply challenges, paired with increasing consumer pressures, have highlighted the urgent need for visibility at every node along the chain.
A recent FourKites industry survey* on the state of the pharma supply chain explored the current lack of visibility and the accelerated industry need for predictability and control across the pharma supply chain — confirming that these issues are more important than ever before for pharma manufacturers. In these areas, smarter supply chain visibility can help manufacturers take a more strategic, proactive approach — an important step towards the goal of end-to-end supply chain visibility and control.
*“The Pharmaceutical Supply Chain: Closing the Visibility Gap” survey and report includes findings from
100 supply chain companies across the United States.
Transport and storage
Pharma manufacturers are feeling serious pressure all along the supply chain. In many cases, they are accountable for a vaccine or therapy until the point of patient vaccination. That means manufacturers own the product even after it enters a health care facility, up until the very moment it’s administered to the patient. This translates to several potential vulnerabilities that must be considered.
Respondents to the FourKites survey reported four major pain points in transporting and storing goods: product protection and the need to quarantine; supply and demand fluctuations; operating costs and penalties; and freight traceability (Exhibit 1). Among these issues, security and temperature reporting were of the greatest concern.
Temperature
The concern over temperature reporting reflects pharma manufacturers’ ongoing challenges with the cold chain. Cold chain failure can be utterly catastrophic. In fact, according to the World Health Organization, more than half of vaccines are wasted worldwide, and one billion vaccines could have been saved during the COVID pandemic with smarter cold chain management strategies in place.
The solution? Manufacturers can minimize temperature-related waste by ensuring visibility all along the path of storage and shipping, as well as adequate windows to intervene when necessary. A well-rounded supply chain visibility (SCV) solution will include numerous failsafe technologies, such as temperature monitors, temperature trend analysis and real-time alerts. With the ability to connect with carriers and locations to alert them if conditions are falling outside parameters and compliance, manufacturers can protect these lifesaving medicines — as well as their bottom lines.
Security
Another peril that has historically challenged pharma manufacturers is product theft. Almost one-third of the FourKites survey respondents identified product protection as their biggest pain point in transporting and storing pharmaceuticals. Their concerns are not unfounded; the United States ranks in the top three countries for pharmaceutical cargo theft. In 2020, $1.2 million in oncology drugs were stolen from cold storage at a warehouse in a single theft. Besides facility break-ins, truckload thefts also occur.
Manufacturers have long implemented security measures to protect against theft. Nearly all (96%) of the survey respondents pinpointed security reports as their main approach to promoting product retention — outranking both temperature and regulatory reporting. Organizations also use physical security practices as guardrails, including hiring third-party security services, deploying decoy shipments, and even banning vehicle stops within the first and last 250 miles of a shipment, where the risk for theft is greatest.
However, manufacturers concerned about product loss should also consider newer, ‘smarter’ solutions. IoT-based sensor tracking complements physical security, engaging real-time data and alerts to provide greater insight into product security and status. With physical location tracking of every shipment, around the clock, manufacturers can receive alerts when a truck stops or goes off-route and can pinpoint the truck’s diverted location. Some platforms also define spots where issues are most likely to occur and can alert manufacturers when a load is approaching a high-risk area.
Inbound and outbound challenges
Pharma manufacturers must contend with several inbound and outbound supply chain challenges, ranging from yard m
anagement to accurate ETAs.
The most pressing inbound challenges include supplier manufacturing visibility, supplier compliance, visibility of product in-transit and its ETA, and the purchasing process (Exhibit 2).
Outbound challenges cited by respondents also included visibility and ETAs, as well as carrier availability, temperature monitoring, coordination of delivery windows, and security compliance.
Pharma manufacturers can address many of these inbound and outbound challenges through end-to-end visibility solutions.
Predictive ETAs are an essential piece of the puzzle. By pinpointing the exact location of shipments, predictive ETAs can save manufacturers time and resources while helping them avoid costly expediting measures. This open view into product shipments, across modes and continents, results in greater efficiency and prevents the bullwhip effect — increasing swings in inventory in response to shifts in consumer demand as one moves further up the supply chain. With the ability to calculate accurate cycle timing, organizations can right-size inventory — actively mitigating risk and reducing costs.
Advanced yard management systems can also protect manufacturers’ bottom line. Unlike traditional yard management solutions, which only show manufacturers what’s currently in their yard, today’s technology leverages real-time visibility of in-transit and in-yard freight to give manufacturers even more flexibility and insights.
Advanced solutions can help yard managers in many other areas, including workflow automation, SKU-level inventory visibility and the ability to dynamically change appointment schedules based on actual arrival times.
The next level: big-picture thinking
In all areas, smarter supply chain visibility can help pharma manufacturers move away from the Just-In-Time model to a more strategic, proactive approach. However, pharma must adopt big picture thinking to fully realize the promise of end-to-end visibility and control over complex supply chain networks.
The control tower
The control tower concept refers to the effort to stitch together complex and siloed supply chains, so organizations have greater visibility and better insights, resulting in more efficient operations. While survey respondents expect to invest in artificial intelligence, advanced analytics and various digital supply chain technologies in the coming months and years, the report predicts that less than 5% of control tower-like deployments will fulfill their end-to-end potential.
Real-time visibility platforms are an essential piece to complete this puzzle. We estimate that, by 2023, 50% of global product-centric enterprises will have invested in real-time visibility platforms. These solutions will help manufacturers predict the future of their supply chains, rather than simply reacting to disruptions as they occur.
The past two years have taught us that change is constant. While our modern diversity of medications, treatment options and access to health care facilities, including telemedicine, has been incredibly positive for patients, it has also resulted in serious challenges for the unprepared pharmaceutical supply chain. The pharmaceutical logistics market is growing more complicated, with a surge in cutting-edge treatments actively in development, and obstacles and product loss increasing with cold chain requirements.
To keep up, the pharma industry must embrace change through continuous collaboration and education. When choosing a supply chain visibility platform, manufacturers and shippers alike should consider longevity: Will this service help us stay on top of ever-evolving technologies? Will it help us continually train our employees on the latest updates? Will it connect us with the greater logistics community, providing us access to real-time and real-world insights? An all-inclusive visibility platform will help your organization maximize its supply chain not just for today, but also into the foreseeable future.
The FourKites survey confirmed what many in the industry already recognize: Visibility, predictability, and control across the pharma supply chain are more important now than ever before. In the face of mounting patient pressures and unprecedented environmental disruptions, now is the time for innovation. Real-time visibility, through an end-to-end supply chain visibility platform, will help pharma manufacturers rise to the challenge, through the pandemic and beyond.
