Unlock innovation in logistics – streamlining the supply chain29 April 2016
Innovation is a must in pharma, and it goes far beyond the development of new treatments. The logistics function is one area in which new thinking can be the key to unlocking a competitive advantage. World Pharmaceutical Frontiers speaks to Adam McKenna of WCA Pharma about how it helps companies tackle the complexity of the supply chain in a way that maximises advantage and minimises risk.
The development of new therapeutic drugs is the backbone of the pharmaceutical industry, but it counts for nothing unless the right logistics solution is in place. Overcoming the complexity of the supply chain in a global marketplace for products that may need to be transported within key environmental parameters is a big challenge, and to do so efficiently is even more demanding. Pharmaceutical companies have to think carefully about what they can achieve with third-party logistics (3PL) providers, but some have gone beyond ensuring compliance and integrity in the supply chain, and are now making logistics a source of competitive advantage.
There are many ways in which the pharma sector wants to improve logistics, not least by achieving a leaner and more efficient supply chain that performs to the highest standards, regardless of the transportation and packaging requirements of different types of drug. Above all, the ability to track and trace products through a transparent supply chain is the essential step forward.
"The pharmaceutical and life-sciences industry has had few choices for shipping products internationally," says Adam McKenna, general manager for perishables and time-critical at WCA Pharma. "Since the WCA Pharma network was formed in 2013, we have seen a huge increase in shippers and manufacturers choosing specialist independent forwarders. The company is contactable at any time, has the technology to know exactly where clients' products are and their active temperatures, and can offer a unique pharmaceutical and life-sciences insurance product."
McKenna believes this is fundamental to the logistics relationship that modern companies must embrace.
"Without these tools, shippers often faced the prospect of not knowing exactly where their controlled drugs were. The tools to help were available, but the forwarding community simply did not know where or how to look for the right products to match the commodity shipped."
He thinks the community needs new ideas and sees a general rise in standards in the industry. "Gaps in the supply chain should not be tolerated," McKenna adds. "A full audit trail is easily achievable; even recording when the products are on board the aircraft helps give shippers a complete report from the minute it leaves their facility to final delivery. These are fundamental basics the industry should expect and deserves."
A pharmaceutical logistics networks, WCA Pharma counts many leading independent forwarders among its members. It operates to strict GDP standards, works to understand the needs of the industry in clinical trials, APIs, biopharma and controlled drugs, and knows the importance of efficiency. Lean and operational excellence are an important part of this, and McKenna believes they need to be fully brought into the industry.
"Operational excellence is crucial but, sadly, often overlooked by some logistics providers. The experience is with the guys on the desk who have the credentials to handle delicate shipments." He thinks that companies should look more closely at their own capabilities and staff experience to determine how to improve performance. "There is planning needed, space to be reserved and, often, packaging required to deal with the origin and destination. This may be more expensive then sending via general cargo, but the money and time saved in having the product arrive in perfect condition represents the height of efficiency," says McKenna.
Simple solutions to complex problems
Problems of proliferation and inefficiency are common in the complex pharma supply chain, but McKenna believes there is a simple solution. "The best way is to make sure you choose the right forwarder. We see so many terrible stories of general freight forwarders trying to handle specialist shipments. Due diligence is important, but finding the correctly qualified company is crucial."
McKenna is critical of companies attempting simply to cut costs. "Service is more important than cost. Expert forwarders know the correct handling processes and choose the right routes to protect the products shipped. This is usually self-financing as it ensures the product arrives in perfect condition. All of our members go through checks prior to being allowed into the network. The result is a better level of handling, a low risk of claims and a greatly improved supply chain," he explains.
"Specialist forwarders request information on the shipments they are handling. It is crucial to know what you are shipping and to take responsibility for it. Having the responsibility to know that the end patient must be the primary goal is all that matters," McKenna explains, emphasising that professionalism is a must. "Taking time to understand the scope of the goods ensures that the correct transport method, temperature and protection can be applied. Each product is different, so each product deserves to be handled differently. One size does not fit all in this industry, and nor should this ever be the case."
Choosing a forwarder that understands the unique challenges of the pharma sector also plays a big role in fostering supply chain innovation. Implementing a new logistics plan can be risky, but the industry changes quickly and, through its relationship with a forwarder, a pharma company can keep pace with that change.
"Airline products evolve, shipping lines use better equipment, and there are many passive and non-passive solutions. But the main issue is to have correctly qualified people look at these products and test them, and with their levels of experience, have the confidence to present them to their clients and get them into the market," says McKenna. He believes that a well-trained forwarder will save companies money in the long term, even if they are more expensive.
Innovation, he says, however, is one of the most important things the industry must embrace. "The industry cannot stand still, although implementation within the pharma industry can take time. Having the right equipment tested need not be a lengthy process. The wrong equipment in the wrong hands will lead to poor results; the right equipment in qualified, trained hands can lead to positive, industry-changing results," he says.
"We look at a lot of products. Some help, some do not. But with the industry evolving at a fast pace, and constant mode-shift, companies need to plan for all modes of transport - air, land or ocean. All of these modes now have the technology to provide instant tracking, temperature and security alerts.
"When shipping controlled drugs, you not only need to know their location but the current active temperature, too." He believes all logistics operators should offer security alerts on the equipment to which members have access, so that if the package is opened or the light within the package changes, an alarm is triggered.
"With this information, companies can act, be responsive and help to protect the goods. Knowing exactly where the product is when an alert goes off means that a phone call to that location can help to prevent serious issues. Without this, spoilage is almost guaranteed, which no one involved in the supply chain of these products wants."
Asked what counts most in fostering innovation in pharma logistics, McKenna has a simple and clear reply.
"Experience. So many companies have applied to become members as they feel it will gain them additional business. We reject approximately five companies a week, as they do not meet our criteria. We expect to work to a global standard. EU GDP was a good start, but we could not - and should not - expect global companies to work to an EU concept.
"We are working with IATA and leading companies such as Brussels Airport, and will roll out an IATA Center of Excellence for Independent Validators scheme for our members. By working to a truly global standard, the industry will benefit tremendously," he explains.
Seek out a specialist
The problems pharma companies may experience with 3PLs can have a dramatic impact on the overall performance of the business but, with the right experience, they can revolutionise the supply chain and radically improve the service to their customers. For McKenna, it comes down one simple thing: choosing a forwarder with the right experience and skills.
"Any issues can be minimised in this initial process. A general forwarder, as good as it may be, will look to choose the lowest-cost option first and then try to make the product fit into that model. But the shipment always needs to start with the product. A forwarder should look at the best options - how the goods should be handled, how it can help to protect the products, and ensure they arrive safely and in perfect condition."
McKenna once again emphasises quality over speed and cost: "With the correct experience and training, a shipment can be handled correctly from the very beginning. This is not an industry where corners should be cut.
"Costs should be protected, of course, but professionals help make the difference by knowing how to work with the products they are given. 3PL companies are responsible for handling goods. If they are not qualified, they simply should not handle them. This is a fundamental issue we often see causing problems, and WCA Pharma members are then called to handle a replacement shipment due to another company's mishandling or misunderstanding of what was required to complete on a successful shipment."
As for the future, WCA Pharma's aim is to be front and centre in the development of international standards, and to stay abreast of innovation to ensure that its members have the latest technology and skills at their disposal. The global pharma logistics market continues to grow apace, so reducing complexity and maximising efficiency will become ever more pressing concerns.
The goal is to make a completely closed supply chain a realistic possibility by virture of electronic data transfer, temperature monitoring, and sharing of track and trace between companies - something that is already starting to happen with shippers.
"No longer does this industry need to accept poor response times. With the technology that exists now - and that can only get better in the future - the industry can be confident in fewer claims and a greater ratio of successful first-time shipments," says McKenna.