Pharmaceutical logistics development

Developing new services for the pharmaceutical industry requires a formalised process and close collaboration. One example is DHL’s cold chain freight network, which has a number of new service offerings.

	Dedicated full truck load haulage provides a relatively fast service.

Product development is key to any service organisation. DHL has a formalised process to develop products starting with idea gathering (from internal and customer workshops). This continues through prioritisation into investment, development and commercialisation. The process needs to encourage innovation in the early stages, but has a formal series of gates and milestones to ensure development meets the timelines demanded.

At all stages, close links with account management teams and customers are key; many challenges can be solved with close investigation of other industries and divisions. This process mirrors those used in world-class ‘product’ industries.

Changing needs
The pharmaceutical industry has changed significantly over the last decade for a number of reasons, with an increasing requirement for temperature assurance demanded for products and by regulators. As pharma and biotech companies develop innovative products, the requirements for refrigerated (2-8ºC) and controlled ambient (15-25ºC) regimes increases. For example, refrigerated products currently make up to 28% of the ethical pharmaceuticals supply chain. In addition, recent recommendations from the regulatory bodies are that ambient products require tighter temperature controls than those provided by the current supply chain, emphasising the need for controlled ambient shipping. Regulators state that temperatures within high-risk products should be strictly controlled and monitored. In addition, refrigerated vehicles should be fitted with continuous recording devices.

Within Europe, product movements have traditionally been achieved through air freight within temperaturecontrolled packaging or road freight using dedicated vehicles (even for moving small loads). Both methods have risks that are mitigated in different ways.

Air freight in insulated packaging relies on speed of delivery to reduce the time the product is outside the active controlled environment, but is susceptible to delays in transit. Unless shipments are very small (less than one pallet), this is costly in both price and environmental factors.

Dedicated full truck load road haulage provides a relatively fast service, but there is variability in the vehicles, limited mitigation against problems on route (such as vehicle/refrigeration breakdowns), and this option remains costly in both price and environmental factors.

Issue and requirements
Understanding the customer requirements in the development of any service is important. In the case of transportation of expensive pharmaceuticals, which are temperature sensitive and in limited supply often with long production lead times, this means close collaboration with all stakeholders is vital. There has to be a compelling reason to make any change.

Understanding the requirements also needs considerable detective work to separate true requirements from current practice. The only way to do this is close collaboration with the innovators within the pharma and biotech industries. But what were the main concerns in the development of a cool chain network?

• Quality: including validation of the vehicles and facilities (temperature mapping) as well as preventative maintenance and back-ups to reduce the risk of failure.
• Reliability: timed collections and deliveries and responsiveness from order to collection were key rather than the total transit time. While the delivery timeline of a road network solution will often be slower than air or dedicated vehicle, this was not seen as a key factor in the majority of shipments.
• Visibility: of collection and in-transit status included expected delivery times as well as journey temperature data at the time of arrival to allow faster product release.
• Cost: while this service can provide improved assurance, another client factor in accepting a longer transit lead time was cost of deliveries from three to 15 pallets.

Other areas of concern were linked to co-loading of products from different manufacturers (although this happens within air freight holds, shared and multiuser warehouse facilities and wholesalers) and insurance limitations by manufacturers of the stock within a single vehicle/shipment.

Developing the service

	Figure 1: DHL’s road network solution map. The one-cross docking hub in Mulhouse is serviced by milk-round clusters (black arrows).

Reviewing the product movement across Europe involves close collaboration with pharmaceutical manufacturers in the identification of manufacturing and delivery clusters.

This network is dynamic as distribution strategies change (for example, switch to/from national, regional and pan- European distribution centres), new product launches, increased stability data and new markets open up; flexibility is as important as it is for the development of any network.

Once the transport data has been collated and clustered, modeling techniques are used to determine the ideal placement of facilities to manage the network. In the case of temperatureassured pharma products, the initial network design was for one cross-docking hub (based in Mulhouse), which provided the backbone of the service and was aided by milk rounds by cluster (Figure 1) to service the collection and delivery aspect with a future hub in Nijmegen in the Netherlands.

Developing a network road solution requires flexibility and assurance at its heart, meeting the requirements for both scheduled and urgent deliveries but also providing the assurance (security/ temperature) to meet the requirements of internal quality functions/qualified persons and regulators.

Service delivery
While the current options for pharmaceutical and biotechnology product movements provide an excellent service, there are still potential risks in temperature assurance. In many cases, these risks are highest at mode changes (for example, loading/unloading air freight) or at the event of service failure (vehicle breakdown). Provision of assurance requires a close review of all of the risks and mitigating these through vehicle/cross dock/ procedure and back-up design. Assurance is provided through three main areas: vehicles, facilities and overall service management.

Figure 2: DHL’s pharmaceutical warehouses. Facilities are designed for short-term storage with controlled ambient and chilled areas.

The vehicles will be dedicated for pharmaceutical products only, with two independent cooler units and chilled and controlled ambient temperature zones. These will be temperature mapped and qualified using similar processes to warehousing, with an acoustic alarm for temperature deviation for the driver and a planner by GSM, and theft prevention through acoustic alarm in case of break-ins.

The facilities are designated for short-term storage (<36 hours), but are specified and mapped as pharmaceutical specification warehouses with controlled ambient and chilled areas (Figure 2) as well as the normal security associated with pharmaceutical facilities to enable full cGDP compliance.

Management and control, covering planning of routings and pick-up/collection times as well as tracking of location, temperature and status of shipments is key for operation of the network.

Contingency planning and mitigating risk is at the centre of any pharma distribution service, but this needs to operate throughout the network so all staff are trained on pharmaceutical handling and on the procedures to be followed in the event of problems.

Future product developments
With constant changes in the development of products with tighter temperature control, network redesign and expansion into the developing economies of Eastern Europe, any service or network needs to constantly expand its geographical scope to meet the necessary requirements.

In addition, active tracking and visibility of temperature (not at vehicle level, but at product level) is likely to be a future requirement to enable decisions to be made in transit to speed the inbound process. For example, DHL is working on RFID technology that can capture and download product, temperature and humidity data in real time.

Developing any new product to service the pharmaceutical industry requires close collaboration with the target customers and a well-defined process for the development of the service with constant dialogue with all stakeholders. Key requirements are real and measurable improvements in service (such as time, quality, reliability, cost or environmental factors). Most services would also benefit from a process of continuous improvement and expansion.