TECHNOLOGY’S IMPACT ON PHARMA TRANSPORTATION
Pharmaceutical transportation is no simple task. Particularly this year, the pharmaceutical supply chain has experienced a dynamic shift in operations amid the pandemic. Global players are challenged with the new protocols in place demanding more from shippers while navigating FDA regulations and keeping workers safe. Technology has undoubtedly played a vital role in overcoming recent challenges in the sector while supporting a custom approach for customer needs. The challenges of today are indicators of technological advancements needed for the near future in pharmaceutical goods transportation.
“COVID-19 has changed the way we fundamentally view complex supply chain ecosystems,” explains Gerry Fama, vice president, Europe Sales at BDP International. “As such, BDP’s vision for service in the pharma sector is increasingly dynamic: In a fast, and sometimes unpredictable environment, the pharmaceutical industry needs 3PL and 4PL partners who can manage new and anticipate future challenges. For this reason, BDP aspires to be a proactive partner to orchestrate the entire supply chain and to provide solutions tailored to suit customer needs.”
Fama continues, “Our engineering solution team has the ability to analyze customer needs and guide them in development projects, from the onset of the design phase to final implementation. The goal is to generate integrated solutions that allow customers to have full product visibility along the entire supply chain. Investing in technology is no longer a ‘nice to have,’ but an imperative for those who, like BDP, want to proactively anticipate the new challenges of the pharmaceutical transport and logistics market.”
Technology in today’s market must go beyond gathering data and raise the bar for preparing, transporting, maintenance and communication during each step of the process. Not every industry player will be up for the challenge, but those that do step up to the plate will position themselves in the market as leaders of change in an unpredictable environment while setting the standard for the new future in strategizing and regulation.
“In the coming years, the pharmaceutical supply chain will face new challenges that will have repercussions on all aspects of the distribution chain,” Fama says. “The new rules for the storage and transport of medicines, and the advent of serialization will condition distribution choices and logistical outsourcing strategies. The development of new commercial strategies focused on the patient, the digitalization of the channel, the adoption of the new rules for the storage and transport of medicines, together with the advent of ‘serialization,’ already require a rethinking of production and logistic processes, as well as the outsourcing choices.
“Process automation and data management using new software have proven to be successful strategies for pharmaceutical logistics management. It is essential to evaluate multiple storage and distribution solutions (automatic and digital) to operate in the drug distribution chain.”
Before changes can be implemented in transportation technology, Fama emphasizes the importance of analysis and cost when selecting logistics partners. The interesting thing about pharmaceutical transportation is the cost model originally developed by pharmaceutical companies and how this model was intended. The recent (and potential future changes) in transportation are not considered in this original model. It is imperative that transparency and up-to-date data are communicated when considering ways to modify this model to better support operations.
“The budget intended for logistics by pharmaceutical companies consists of two main cost items: warehouse (storage and preparation of goods) and transport,” Fama explains. “Given the recent regulatory developments (for example in the field of safety and conservation) and the introduction of increasingly specialized products, the weight of transport has increased in recent years, reaching about 55 percent of the overall logistics cost. This increase, inserted in a cost-saving context led by the headquarters of the main pharmaceutical companies, has not changed the average incidence on the logistics costs turnover (remained equal to about 0.5 percent) or on the profits (1 percent).
“Also, for this reason, it is essential to select a logistics partner who can assist with a detailed analysis (costs vs. benefits) before modifying any existing transport and logistics model.”
Where do regulations fit into this equation? Technology paired with pharma transportation is helpful but a tedious process in terms of compliance, depending on location and partners involved. There are ways to ensure your company’s efforts for efficient, compliant transport are on-par with regulations, such as special certifications. Not only do these certifications support the timely and safe delivery of pharma products but serve as a teaching tool for education on technical processes.
“Since 2013, the legislation, especially in air transport, has become more stringent and the European community has issued new guidelines for best practices of distributing the drug for human use (GDP),” Fama says. “These guidelines ensure that all participants involved in the pharmaceutical transport logistics chain are fully compliant. The IATA (International Air Transport Association) has created a special certification called CEIV Pharma (Center of Excellence for Independent Validators) which applies the principles of the GDP and transforms them into requirements of excellence for the air transport of pharmaceutical shipments.
“The certification aims to increase technical knowledge and increase the quality of pharmaceutical transport in the air sector and is based on the training and control by validators external to the IATA who have the task of verifying whether the companies work according to the lines GDP guide.”
Advancing technology applications in any industry requires an honest assessment of the attainability of a seamless transition. The current market challenges create more barriers for technology to become deeply integrated into all processes. Technology is not the only answer needed for improving operations–whether that be transporting pharmaceuticals or other methods of shipping within the supply chain. Costs and risks will always be a factor, regardless of the technology at hand.
“There are few sectors that can boast such a vast technological and regulatory intervention that has improved and disciplined the most intimately operational aspects on several occasions, just to name a few, the constraints on delivery deadlines, minimum availability, exclusive transport obligation, in compliance with the rules of good distribution, to the most recent provisions in terms of drug traceability,” Fama says. “New technologies support the reduction and management of risks, for complete visibility of the global distribution chain: the timely intervention of the logistics operator manages to avoid or sometimes mitigate the unexpected costs caused by an anachronistic and obsolete management of logistics and transport.”
The focus of shipping pharmaceuticals should always be to ensure the products are not compromised or delayed in getting to the patient. The patient will always be at the receiving end of the process.
Gerry Fama, Vice President, Europe Sales, BDP International
Gerry Fama has been in the logistics and freight forwarding industry for more than 30 years. He has held various managerial roles within some of the largest multinationals in the international forwarding sector (Emery, FedEx, UPS and Panalpina). Since 2011, he has been a member of the American Chamber of Commerce. Gerry joined BDP in 2014, developing sales roles in Europe, the Middle East, Asia, North and South America. He is currently based in Milan and can be reached at firstname.lastname@example.org