Steve Beda, Executive Vice President, Trax Technologies09.13.23
The pharmaceutical industry is an economic powerhouse, with a global worth estimated at around $1.27 trillion in 2021.1 This staggering figure reflects the industry's vital role in healthcare, as it produces and delivers life-saving medications, vaccines, and treatments to people worldwide. The pharmaceutical sector is critical not only for public health but also for economic growth and innovation. It drives research and development, creates jobs, and contributes to society's overall well-being.
Behind the scenes, the pharmaceutical supply chain is a complex network of interconnected processes that oversee the safe and timely delivery of medications from manufacturers to patients. This intricate web involves numerous stakeholders, including drug manufacturers, wholesalers, distributors, pharmacies, healthcare providers, and patients.
Their challenges are multifaceted, ranging from ensuring the effectiveness of temperature-controlled medications to handling specialized medications or live agents. There are also special regulatory requirements for pharmaceutical companies as it falls under one of the critical product categories2 our nation must protect. Delving into the varying obstacles this specific industry faces helps clarify the reasoning behind needing sufficient data to lower costs and streamline operations.
Managing liability for shipping expensive medications is critical in the pharmaceutical supply chain. Due to these products' high value and sensitive nature, shippers often find themselves maxing out on liability insurance coverage to protect against potential losses or damages. In certain cases, the risk is so high that more than relying solely on insurance may be required to address all liability concerns.
A good Freight Audit and Payment (FAP) partner can provide valuable support in managing liability for shipping expensive medications. They can verify that the carriers and logistics service providers meet the necessary quality standards and have appropriate certifications for handling pharmaceutical products. This reduces the likelihood of errors or mishandling during transportation, minimizing the risk of damage or loss. A FAP partner can provide insight for evaluating and selecting carriers based on their track record, reputation, and experience handling high-value pharmaceutical shipments.
2. Transit Measures
Temperature control is of utmost importance in the pharmaceutical supply chain. Many medications are sensitive to temperature fluctuations, so it's crucial to maintain the potency and safety of these products.
Another issue lies in the handling of specialized medications or live agents. These include organ transplants, gene therapies, and personalized medicines requiring specialized storage and transportation conditions. Guaranteeing their timely delivery is challenging.
These complexities in the pharmaceutical supply chain highlight the importance of data and the need for efficient FAP solutions. With the sheer volume of medications being transported globally, accurate allocation, audit, and pay processes are crucial to maintaining a well-oiled supply chain.
3. Traceable Data
Traceable data for end-to-end visibility is critical to the pharmaceutical supply chain, especially regarding unit-level serialized product data for each shipment. The ability to track and trace individual items throughout the supply chain provides valuable insights and guarantees accountability for the movement and handling of products. A reputable FAP partner can play a crucial role in facilitating the traceability process—one that will be mandatory after the Drug Supply Chain Security Act’s (DSCSA)3 Nov. 27 deadline to implement requirements to ensure patient safety.
Advanced data management systems and technologies can assist in capturing and analyzing unit-level serialized product data for each shipment. This enables end-to-end visibility, allowing companies to track the journey of their products from manufacturing to delivery at the end-user level. This granular level of traceability helps identify any potential complications, such as product recalls or disruptions, empowering manufacturers to make swift corrective actions.
4. Network Optimization
Network optimization plays a vital role in the availability and accessibility of essential medications as part of national security measures. By strategically designing and managing the pharmaceutical supply chain network, it becomes possible to efficiently distribute medications to healthcare facilities and pharmacies, even during high-demand or emergency situations like the COVID-19 pandemic. Finding the right partner can offer valuable network optimization assistance, contributing to keeping essential medications in stock.
FAP partners leverage data analytics and modeling techniques to evaluate and optimize. Factors like demand patterns, geographic coverage, transportation routes, and inventory levels are all considered areas where the network can be improved. These enhancements may include streamlining distribution center operations, improving transportation routes, or even adjusting inventory stock levels.
Manufacturers can gain real-time visibility into shipment status, monitor temperature conditions, and track the location of their products, all through solid data. This enables proactive intervention in case of deviations from the desired conditions.
One example of technology facilitating data-driven supply chain management is Radio Frequency Identification (RFID) tags. When attached to individual product units or shipping containers, these small electronic devices allow for the collection and transmission of data such as location, temperature, and humidity. This data can be accessed and analyzed in real time, providing valuable insights into the conditions experienced by the products during transit.
Pharmaceutical companies understand that their shipping decisions cannot be solely based on cost considerations. Using a reliable and efficient FAP partner can greatly assist in managing the complexities of the pharmaceutical supply chain. Through providing comprehensive workflows and financial integration, a good FAP partner facilitates seamless collaboration between shippers and carriers. This helps ensure that carriers are paid on time, creating stronger shipper-carrier relationships.
Ultimately, the effective use of data in the pharmaceutical supply chain contributes to improved service quality, reduced risks, and increased resilience. Monitoring and analyzing data in real-time enables proactive intervention, leading to better product quality, time in transit, and overall supply chain performance. As the industry continues to evolve, the intelligent use of data will remain a crucial element in managing the complexities of the pharmaceutical supply chain.
References
1. https://pharmanewsintel.com/features/comparing-global-pharmaceutical-markets-the-us-uk-and-china#:~:text=According%20to%20Statista%2C%20the%20global,and%20the%20COVID%2D19%20pandemic.
2. https://www.whitehouse.gov/briefing-room/statements-releases/2021/06/08/fact-sheet-biden-harris-administration-announces-supply-chain-disruptions-task-force-to-address-short-term-supply-chain-discontinuities/
3. https://www.fda.gov/drugs/drug-supply-chain-integrity/drug-supply-chain-security-act-dscsa
Steve Beda is the Executive Vice President at Trax Technologies, the global leader in Transportation Spend Management (TSM) solutions. Trax elevates traditional Freight Audit and Payment (FAP) with a combination of industry-leading cloud-based technology solutions and expert services to help enterprises with the world's more complex supply chains better manage and control their global transportation costs and drive enterprise-wide efficiency and value. For more information, visit www.traxtech.com.
Behind the scenes, the pharmaceutical supply chain is a complex network of interconnected processes that oversee the safe and timely delivery of medications from manufacturers to patients. This intricate web involves numerous stakeholders, including drug manufacturers, wholesalers, distributors, pharmacies, healthcare providers, and patients.
Their challenges are multifaceted, ranging from ensuring the effectiveness of temperature-controlled medications to handling specialized medications or live agents. There are also special regulatory requirements for pharmaceutical companies as it falls under one of the critical product categories2 our nation must protect. Delving into the varying obstacles this specific industry faces helps clarify the reasoning behind needing sufficient data to lower costs and streamline operations.
Supply Chain Challenges: How a FAP Partner Can Mitigate Them
1. Managing LiabilityManaging liability for shipping expensive medications is critical in the pharmaceutical supply chain. Due to these products' high value and sensitive nature, shippers often find themselves maxing out on liability insurance coverage to protect against potential losses or damages. In certain cases, the risk is so high that more than relying solely on insurance may be required to address all liability concerns.
A good Freight Audit and Payment (FAP) partner can provide valuable support in managing liability for shipping expensive medications. They can verify that the carriers and logistics service providers meet the necessary quality standards and have appropriate certifications for handling pharmaceutical products. This reduces the likelihood of errors or mishandling during transportation, minimizing the risk of damage or loss. A FAP partner can provide insight for evaluating and selecting carriers based on their track record, reputation, and experience handling high-value pharmaceutical shipments.
2. Transit Measures
Temperature control is of utmost importance in the pharmaceutical supply chain. Many medications are sensitive to temperature fluctuations, so it's crucial to maintain the potency and safety of these products.
Another issue lies in the handling of specialized medications or live agents. These include organ transplants, gene therapies, and personalized medicines requiring specialized storage and transportation conditions. Guaranteeing their timely delivery is challenging.
These complexities in the pharmaceutical supply chain highlight the importance of data and the need for efficient FAP solutions. With the sheer volume of medications being transported globally, accurate allocation, audit, and pay processes are crucial to maintaining a well-oiled supply chain.
3. Traceable Data
Traceable data for end-to-end visibility is critical to the pharmaceutical supply chain, especially regarding unit-level serialized product data for each shipment. The ability to track and trace individual items throughout the supply chain provides valuable insights and guarantees accountability for the movement and handling of products. A reputable FAP partner can play a crucial role in facilitating the traceability process—one that will be mandatory after the Drug Supply Chain Security Act’s (DSCSA)3 Nov. 27 deadline to implement requirements to ensure patient safety.
Advanced data management systems and technologies can assist in capturing and analyzing unit-level serialized product data for each shipment. This enables end-to-end visibility, allowing companies to track the journey of their products from manufacturing to delivery at the end-user level. This granular level of traceability helps identify any potential complications, such as product recalls or disruptions, empowering manufacturers to make swift corrective actions.
4. Network Optimization
Network optimization plays a vital role in the availability and accessibility of essential medications as part of national security measures. By strategically designing and managing the pharmaceutical supply chain network, it becomes possible to efficiently distribute medications to healthcare facilities and pharmacies, even during high-demand or emergency situations like the COVID-19 pandemic. Finding the right partner can offer valuable network optimization assistance, contributing to keeping essential medications in stock.
FAP partners leverage data analytics and modeling techniques to evaluate and optimize. Factors like demand patterns, geographic coverage, transportation routes, and inventory levels are all considered areas where the network can be improved. These enhancements may include streamlining distribution center operations, improving transportation routes, or even adjusting inventory stock levels.
Finding the Right Freight Audit and Payment Technology
Data-driven approaches have revolutionized the management of carriers and logistics service providers within the pharmaceutical supply chain. Timely and accurate delivery is crucial in this industry.Manufacturers can gain real-time visibility into shipment status, monitor temperature conditions, and track the location of their products, all through solid data. This enables proactive intervention in case of deviations from the desired conditions.
One example of technology facilitating data-driven supply chain management is Radio Frequency Identification (RFID) tags. When attached to individual product units or shipping containers, these small electronic devices allow for the collection and transmission of data such as location, temperature, and humidity. This data can be accessed and analyzed in real time, providing valuable insights into the conditions experienced by the products during transit.
Pharmaceutical companies understand that their shipping decisions cannot be solely based on cost considerations. Using a reliable and efficient FAP partner can greatly assist in managing the complexities of the pharmaceutical supply chain. Through providing comprehensive workflows and financial integration, a good FAP partner facilitates seamless collaboration between shippers and carriers. This helps ensure that carriers are paid on time, creating stronger shipper-carrier relationships.
Ultimately, the effective use of data in the pharmaceutical supply chain contributes to improved service quality, reduced risks, and increased resilience. Monitoring and analyzing data in real-time enables proactive intervention, leading to better product quality, time in transit, and overall supply chain performance. As the industry continues to evolve, the intelligent use of data will remain a crucial element in managing the complexities of the pharmaceutical supply chain.
References
1. https://pharmanewsintel.com/features/comparing-global-pharmaceutical-markets-the-us-uk-and-china#:~:text=According%20to%20Statista%2C%20the%20global,and%20the%20COVID%2D19%20pandemic.
2. https://www.whitehouse.gov/briefing-room/statements-releases/2021/06/08/fact-sheet-biden-harris-administration-announces-supply-chain-disruptions-task-force-to-address-short-term-supply-chain-discontinuities/
3. https://www.fda.gov/drugs/drug-supply-chain-integrity/drug-supply-chain-security-act-dscsa
