Night moves – maintaining supply chain standards

3 April 2017

Transporting medical supplies and pharmaceuticals through complex routes and at precise temperatures requires companies to meet supply chain standards without compromising product quality, often at 24/7 availability. Sophie Peacock speaks to Nikos Konstantinidis at Roche Diagnostics about how the company ensures that overnight shipping of stock is as efficient and safe as possible.

The idea that a medical facility might not have the drugs to treat you because of late deliveries or incompetent storage is seen as unacceptable. During the last decade, crucial shipping procedures have matured significantly, largely due to technological advances improving visibility across the supply chain, from production to delivery to the customer. The Pharmaceutical Supply Chain Initiative (PSCI) was founded in 2006 as a non-profit business membership organisation with the sole purpose of formalising industry guidelines for drug delivery.

The industry is, on the whole, keeping up with the pace. The European Federation of Pharmaceutical Industries and Associations states that, according to EUROSTAT data, the pharmaceutical industry is the high-technology sector with the greatest added value per person employed; significantly greater than the average value for other technology and manufacturing industries. This information would suggest that medical supply companies are more than capable of integrating with the ‘golden age of data’ to provide a comprehensive service that never sleeps.

Optimising your assets

The vital foundation of this service is optimal supply chain visibility. “It has become an area of competitive advantage, which, in many cases, leads to re-engineering of processes, redesigning of organisational structures, redefining of roles and responsibilities, and high investments in property and technology,” says Nikos Konstantinidis, head of supply chain in Roche Diagnostics.

“As partner and facilitator of an organisation’s commercial strategy that shares cross-functional goals with other business procedures, a strong supply strategy is integral to overall company success.”

Roche defines itself as the world’s largest biotech company, supplying medicines in oncology, immunology, infectious diseases and neuroscience. It is also the world leader in in-vitro diagnostics and tissue-based cancer diagnostics, as well as being a pioneer in diabetes management. Almost 30 medicines developed by Roche are included in the WHO Model Lists of Essential Medicines, among them life-saving antibiotics, antimalarials and chemotherapy.

Konstantinidis’s current role demands a keen eye for shipping strategies, focusing on shaping logistics strategy and the supply chain to meet customers’ specific needs. His speciality in inventory management, warehousing and distribution, directly informs Roche’s shipping strategies; the company’s vision to become an invaluable part of its customers’ business procedures means championing innovation, information availability and the distribution of expert advice.

At the heart of having a compliant supply chain is vendor qualification, the process through which pharmaceutical companies manage their outsourced activities and purchased materials. Today, there are hundreds of API companies and dozens of businesses offering everything from data loggers to special boxes, and active containers and passive containers.

Four-step process

According to FDA, vendor qualification should involve four different steps: prior assessments through audits and material evaluation; a written agreement that defines responsibilities and communication processes; a monitoring and review process that assesses the performance of the contract acceptor; and a monitoring system for incoming ingredients and materials that ensures they come from approved sources.

By increasing the movement of night-time volumes compared with those carried out in the daytime, products can be transported in a more environmentally friendly fashion and customers can receive their shipments quickly.

Once vendor qualification is established, however, how will overnight shipping procedure play out in terms of contributing practically to faster, safer shipping of medical supplies? And what are the logistical implications for suppliers looking to enhance their services? Pharmaceutical companies offering overnight deliveries must vitally employ a dynamic and efficient supply strategy to avoid a multitude of problems (such as product shortages or expirations, or inadequate temperature control), consequently minimising handling and transit times. Any procedural oversights can have a knock-on effect that can leave warehouses, clients or patients sorely inconvenienced.

“Transportation is an important factor in being able to offer a holistic customer experience. As such, it needs to be fully aligned with all other activities that are completed prior to a shipment’s dispatch,” says Konstantinidis. “These include stock management, replenishment, warehousing, picking, packing and labelling performed by warehouse personnel.”

Staff roles and responsibilities should also be adapted to the requirements of overnight shipping: working shifts need to be aligned with product volumes and carriers’ shipping schedules. “In this respect, technology plays a significant role by accelerating the processing of orders and making them available for shipping on the day they are created,” he explains.

24/7 for 365

With a steadily increasing technological presence in transit procedures, 24/7 procurement is maintained with growing efficacy through comprehensive data collection and analysis. Stock management and ordering systems are able to track consumption and available inventory, generate purchasing orders, communicate with suppliers in real time, and receive or incorporate additional data, such as order confirmations or shipping notifications. Barcoding systems simplify shipments by tracking products across the chain until delivery.

This easy identification of goods and shipments offers flexibility and information flow visibility, transforming the procurement and goods receipt into tasks that can be performed by different people, shifts or partners.

‘Track and trace’ systems offer detailed product flow information, further enhancing Roche’s supply chain visibility and displaying opportunities to optimise the handling of transport issues. “This is just a sample of some of the technologies available today that work around the clock to support 24/7 procurement and protect supply chain consistency and transparency,” says Konstantinidis.

Though advanced procurement technology certainly simplifies transit of medical supplies, the advantages are not purely time economical. Companies benefit operationally and environmentally from the technology that supports overnight shipping – rewards that are visible at both ends of the chain.

Overnight transit allows for time-sensitive needs to be met more easily, avoiding daytime traffic congestion, thereby improving fuel consumption.

Roche’s company website professes the firm to be ‘committed to sustainable development and minimising its impact on the environment’.

Patient approach

“By increasing the movement of night-time volumes compared with those carried out in the daytime, products can be transported in a more environmentally friendly fashion and customers can receive their shipments quickly,” says Konstantinidis, noting that suppliers also have the opportunity to reduce lead times and react promptly to any urgencies: “Offering speed and efficiency in this way reduces uncertainty surrounding required stock levels, keeps products at the highest level of quality, and, most importantly, improves the experience of customers and patients.”

Currently developing Roche’s insight into the UK logistics market, Konstantinidis is making crucial waves for the company’s supply chain strategies. Transportation is an area in which it has a competitive edge, in the practical sense as well as in how it handles customers.

“Discussion of product transit is often the last instance of direct contact with customers and, as such, can greatly affect their perception of us,” Konstantinidis says. “Roche’s flexible delivery options are critical for its customers’ purchase decisions and demonstrating that it values the criticality of timely and reliable transport.”

As well as providing overnight deliveries, Roche employs a multitude of customisable transportation procedures based on customer or site-specific requirements. By closely monitoring developments in freight, the company can add new transportation techniques to its portfolio.

“Having an efficient transit system in place, Roche is not only ensuring that our customers receive their products on time, but also that doctors can diagnose and treat patients as efficiently as possible,” claims Konstantinidis.

The bright future

Things will only get tougher: a more diverse range of products and therapies will appear on the pharma market, challenging distributors to provide supply chains that can adapt to changing environments. Supply chains will continue to transform from fragmented functions to interlinking processes within organisations, as well as with regard to other steps, such as suppliers and customers.

Offering speed and efficiency in this way reduces uncertainty surrounding required stock levels, keeps products at the highest level of quality, and, most importantly, improves the experience of customers and patients.

“This means more focus on sophisticated systems, lean processes, efficient resources management and performance monitoring,” Konstantinidis says. Fundamentally, the problem of efficiently transporting medical supplies remains the same, but pharmaceutical companies will need to keep their focus on the changing market, and ensure their procurement technology is updated in parallel.

Pharmaceutical trade in the UK, 1999–2014

The pharmaceutical industry has generated a trade surplus for the UK of £1.1 billion every year for a decade, according to the latest figures. This is greater than any other industrial sector in the UK. The UK Office for National Statistics (ONS) published data in 2016 that indicated that the sector’s strong performance had helped UK manufacturing to grow at its fastest rate in nearly four years.

The figures, contained in the April 2016 UK index of production, showed that overall UK manufacturing output grew by 2.3% in April, the biggest monthly rise since July 2012. The wider measure of industrial output increased by 2.0% in this time, which is also the biggest rise since July 2012.

The largest contribution to the increase in manufacturing came from the manufacture of basic pharmaceutical products and pharmaceutical preparations, which increased by 8.6% (month on month), the largest rise since February 2014. “Anecdotal evidence suggested increased exports were the main contributing factor to the rise in the pharmaceutical sector,” said an ONS statement.

Source: HMRC

Nikos Konstantinidis joined Roche Diagnostics in 2015. He is head of supply chain managing UK, Ireland, Cyprus, Malta, Iceland and Israel operations, including stock management, warehousing and distribution.
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