How to Combat Rising Challenges in the Pharmaceutical Supply Chain

Posted by Benjamin Meskin on May 31, 2018 1:37:41 PM
Benjamin Meskin

pharmaceutical logistics blog cabrella

When a pharmaceutical supply chain is efficient, clients and patients receive their medical supplies in top condition and at the right time, counterfeit drugs stay off the market, and companies profit. When there are problems in the process, the exact opposite happens.

 

Recently, challenges have been increasing in the pharmaceutical supply chain for several reasons. For instance, many companies are working with a greater number of suppliers, there are more regulations to meet, and counterfeit drugs are becoming more common. Luckily, there are solutions to all the problems this brings, no matter how complex the supply network.

 

Lack of Coordination

 

 

Although all respondents in one survey (conducted by researchers and veterans in the medical logistics field, Natalie Privett and Dr. David Gonsalvez,) reported that coordination is important or critical, poor coordination still remains widespread. This is due to siloed, fragmented, or otherwise uncoordinated communications and executions between differing parts of a supply network.

 

 

Poor coordination leads to major losses due to an excess of some products but a lack of others. This has a knock-on effect, impacting timeliness of deliveries, distribution costs, sales, customer satisfaction, and more. Not only are medications affected — even products like blood vials with additives can have short shelf lives and may need to be destroyed if they fail to reach their destination in time.

 

 

Despite efforts to improve coordination (such as initiatives established after the report by the Paris Declaration on Aid Effectiveness and the Global Task Team on Improving AIDS Coordination in 2005), fragmentation is still a major problem. Whereas efforts have led to some improvements, there are still noticeable issues for both domestic and global supply networks.

 

 

One solution to the coordination problem is to implement systems that make it easier to integrate multiple types of software. For instance, you can add coordination for shipping insurance, allowing you to integrate across any carrier. This will mean that you are less likely to see issues with products, projects, and funders in respect to insurance.

 

 

Better coordination improves pharmaceutical supply chain implementation, which, in turn, has several benefits. You’ll avoid duplicated activities, ensure that scarce resources are never wasted and arrive where they are needed most, and can even automate many processes to minimize human error.

 

 

Order Management and Inventory Management

 

 

Order and inventory management is one of the most complicated aspects of the pharmaceutical logistics network. It is more complex if you are missing information, as it is impossible to make informed decisions without accurate data. Unfortunately, it’s rare to have all the information you need, making the scarcity of information a main reason why most people surveyed said that their inventory management and planning is ineffective.

 

 

The main issue is a lack of reliable demand data. For example, if the demand for medical test kits is unclear or inaccurate, you could end up stocking more kits than is possible to sell before they expire. This problem is only exacerbated by shipment delays.

 

 

This, however, is only one cause of order and inventory management problems. Other reasons include poor management of warehouses (made worse when employees lack necessary training) as well as poor understanding (or failure to follow) of First-Expired-First-Out pull policies. This leads to inaccuracies in the supply chain like quantification, uninformed push systems, poor allocation of inventory, and difficulty managing product availability.

 

 

To resolve these problems, you need to receive real-time updates and alerts when you encounter issues. Bear in mind, though, that these features only apply to certain private parcel carriers — you’ll still need to find a solution for freight.

 

 

Temperature Control and Expiration

 

 

If a delayed shipment causes a product to go bad, your company will suffer a loss. In many cases, products go bad due to temperature control failure.

 

 

To understand just how widespread this problem is, consider that 30 percent of discarded pharmaceuticals are wasted purely because of temperature-related logistical problems. Plus, 25 percent of vaccines arrive degraded because of incorrect shipping. Finally, 20 percent of all temperature-sensitive products suffer some damage during shipping.

 

 

All this not only leads to short-term monetary losses, you may also put patients at risk. Vaccines, in particular, have a lower efficacy when temperature fluctuations occur, or may fail to work entirely in the case of temperature control failure.

 

 

Temperature control problems are due to the product being either exposed to hot temperatures or frozen. This is because, as it is difficult to monitor temperatures in transit, companies often opt to use sensors just upon arrival and sometimes at set points during the journey as well. In addition, they often use ice or dry ice, which can result in freezing if the products are packed incorrectly or overheating in the case of a delay that allows ice to melt.

 

 

To face these challenges, you need focus on inventory control, prioritizing, and opting for faster on-time deliveries. It is also important to have shipping insurance: if there is a delay and temperature control is out of your hands, at least you will be protected from losses.

 

 

One solution to this issue is a system like vaccine vial monitors. Although they do nothing to prevent incorrect temperatures, they will identify affected products.

 

 

Visibility

 

 

Visibility is perhaps the most prominent problem for pharmaceutical supply chains. In many cases, as soon as the shipment leaves the manufacturer, it becomes difficult to track. Only once it arrives at its destination do you have any idea of its status.

 

 

The main reason for this is that certain carriers offer no real-time tracking, unless they are shipping cold chain products or narcotics. This is particularly a problem for high-value shipments, such as some medical devices.

 

 

Even if you have access to some tracking, you will no longer be aware of the status of the shipment once it has reached the port of import. In the best of cases, you’ll receive a delivery notification. However, this tends to only apply to national deliveries, it may take up to a full week for the alert to come through, and the alert may never reach the central warehouse.

 

 

Global shipments are yet more difficult to track, as you may receive close to no communication during the journey. Worse still, visibility tends to lessen as the shipment moves through the supply network.

 

In other words, you may be unaware until a later date that the product has arrived at its final destination. You may even lack status updates when the product stops at warehouses and medical centers.

 

 

To solve all the issues surrounding visibility, you need highly-capable order tracking with real-time notifications, such as with global cloud-based software. This will aid your understanding into where holdups tend to occur. Often, it’s possible to find carriers who have their own tracking update systems that will be sufficient for most of your shipments.

 

 

Counterfeit Drug Circulation in Black Market Channels

 

 

Counterfeit drugs are rapidly creating a major challenge for pharmaceutical logistics networks. As many as one in 10 medical products in circulation in low- and middle-income countries are either counterfeit or low-quality. As well as medications, this includes vaccines and medical testing kits of any value. The problem of counterfeit drugs is also rampant in wealthier countries due to unregulated websites.

 

 

When counterfeit drugs flood the market, expenses rise for the supplier, as it puts companies at the risk of regular overhauls. There is also a cost associated with lower customer confidence, especially for legitimate online pharmacies.

 

 

To combat this problem, it is necessary to regulate your logistics network closely and carefully. This involves improved order tracking to help provide traceability to the original source. It is also useful to implement new technologies for better anti-counterfeiting protections. Such technologies work in two ways. First, they have a unique chemical marker. This is currently restricted to outer containers but in the future will likely be on pills themselves. These markers are forgery-proof and invisible to the eye. The other aspect of the system is a handheld scanner that reads the information and checks it against a cloud-based database.

 

 

Both of these measures improve the efficiency of supply chains and make it more difficult to create counterfeits. Furthermore, you can provide data about tracking to customers to increase their trust.

 

 

 

Lack of coordination, tracking, and organization can lead to major problems in the pharmaceutical supply chain. To combat these rising challenges, you’ll need to change your practices in a variety of ways — but there is no need for the transition to be overly complex. The modern world has relatively simple solutions to pharmaceutical and medical logistics problems you are experiencing. If you look at Cabrella's multi carrier shipping insurance software, you can see how easy the shipping insurance software integrates across all carriers and provides real-time tracking. This combined with temperature-monitoring solutions and organization tools across other areas of your supply network can greatly benefit your company. Implementing the right solutions and technology will give your company the edge it needs to combat any supply chain challenges that lie ahead.

 

 

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