The challenge for most companies is getting a handle on their temperature-sensitive supply chain. As a guide for getting temperature-sensitive logistics right, it helps to know the most common pitfalls — and how to avoid them.
Below are the 10 most common supply chain pitfalls for temperature-sensitive pharmaceutical products:
1. Focusing only on “cold chain” and missing the bigger temperature-sensitive picture
As most manufacturers know, many temperature-sensitive, “cold chain” products must be stored at 2-8° Celsius — and kept within their temperature range at all times to prevent spoilage. As illustrated by the sales projection above, there are numerous cold chain products on the market today and the numbers will only continue to rise. This does not, however, paint the entire picture of the temperature-sensitive pharma landscape. A large percentage of healthcare products are not considered “cold chain” products, but rather fall in the category of “controlled room temperature” (CRT) products. Like cold chain, CRT products also require protection and vigilance in the supply chain. Thus, manufacturers must take a closer look at the needs of individual products with respect to their specifications for protection along the supply chain journey.
2. Not carefully weighing your distribution and transportation options
When looking at the best way to reach customers in relation to where your temperature-sensitive inventory is stored and how it’s transported, it’s important to consider a few things: What are your temperature-sensitive transportation needs by product? How fast do products need to get to customers? What transportation modes make the most sense to balance speed and cost?
There are trade-offs to different distribution models, but it’s best to consider models that will best fit a company’s overall business goals. For example, it may make sense in some cases to rely on a central distribution center and use a reliable carrier to ship next-day to customers. While this option carries a premium for transportation, customer reach can be achieved from virtually any location. On the other hand, companies can also consider regional distribution centers, which may lower transportation costs, but companies may carry higher fixed costs, such as vaults, coolers and freezers. Outsourcing distribution and transportation to a third-party logistics provider (3PL) with distribution centers strategically located near airports and potentially closer to customer destinations can also remove fixed costs and add supply chain flexibility. Whatever the model, not weighing all the options carefully with your providers could leave opportunities for operational and cost efficiencies on the table.
3. Making poor packaging choices
Packaging is the first line of defense in protecting temperature-sensitive products in the supply chain, but it’s important first to understand the ‘offense’ in order to make the best packaging decisions. Companies sometimes may lack knowledge about the latest temperature-sensitive packaging solutions now on the market and which options are the best choices for the transportation of their products. Another issue manufacturers face is the lack of knowledge about complex global and regional compliance packing requirements. While some may choose to hire in-house packaging specialists, another resource may be to consult with a trusted 3PL provider that can point companies in the right direction for the best options specific to their transportation needs. An additional area to consider when making smart packaging choices is learning more about the transportation environment. Some carriers may be able to provide a detailed temperature profile map of their network, which will help in selecting the best packaging solution by lane. This will ensure that packaging for products moving from San Juan to San Diego, for example, will hold up and protect the shipment the entire way.
4. Letting your guard down during layovers
When looking at where most excursions — incidents when the product falls outside of the required temperature range — happen during a product’s supply chain journey, many of these occur between transportation legs. For example, during airplane layovers, especially in warmer or colder parts of the world, products left sitting on the runway for too long between flights without added protection measures could be at risk for temperature excursions. Mapping out the product’s journey and planning ahead with your supply chain partners for both planned and unplanned events will help ensure that products remain protected.
5. Not including your transportation provider in your quality agreement
While inventory storage providers may be included in supplier quality agreements, it is imperative that companies also have a transportation-specific quality agreement with a carrier, especially when it comes to shipping temperature-sensitive products. This is a good opportunity to look beyond simply adding standardized or generic language in the agreement to ensure and achieve a high level of accountability. A quality agreement should include details affecting the safety, potency and purity of a product and who is responsible for carrying out those elements. These items should also include anything that may affect the compliance status of either party.
6. Having anything less than round-the-clock visibility and reporting capabilities
Visibility is a key component of today’s supply chains for all types of products; however, in no case is visibility more important than when it involves potentially life-saving temperature-sensitive healthcare products. Manufacturers need to know where their products are at all times — 24/7 — which requires advanced tracking technologies. Beyond knowing where products are, manufacturers also need to know products’ temperature conditions at all times in order to act before products go outside of temperature range and potentially become spoiled. It’s also essential that visibility solutions provide near real-time data, whether they are air freight containers that use cellular transmission for location and temperature, or sensors that are embedded in packaging to monitor details like light exposure and vibration. Knowing that products have gone outside their temperature range several hours after the fact means it’s too late to protect products. Visibility should extend to all partners in the value chain, so that manufacturers can keep a watchful eye on the entire supply chain journey.
7. Allowing too many supply chain hand-offs
The more that products have to change hands in the supply chain, the higher the chance for temperature excursions and compromised products. With increasingly global supply chains, this risk is even greater than in the past. If possible, pharma manufacturers should limit the number of carriers and transportation providers that they work with to ensure that products don’t have to change hands — and therefore responsibility — too many times in the supply chain. It’s critical to collaborate with a 3PL provider to ensure that companies have mapped out a plan together that works best to limit hand-offs according to product distribution needs. If in doubt, ask about how hand-offs will be handled. In other words, don’t be “hands off” when it comes to planning.
8. Having limited supply chain regulatory expertise
Regulations around temperature-sensitive product storage and distribution are continuously evolving, and for now, don’t cover all areas of the supply chain. The regulatory landscape becomes even more complex when considering the global supply chain and the fact that requirements and regulations can vary greatly by country or region. The best advice for manufacturers is not to wait on specific regulatory action to take their own action around addressing temperature-sensitive product storage and distribution needs. In this case, getting ahead of regulations and then having a mechanism in place to stay up to speed on the different requirements for different parts of the globe is important. It’s important to seek expertise specific to the supply chain.
9. Not having a risk management plan specific to temperature-sensitive products
Perhaps the single most important element in temperature-sensitive transportation is the ability to intervene when products go off course or outside of their required temperature range. If manufacturers do not plan ahead to manage risks, they could stand to lose hundreds of thousands of dollars in spoiled products a year. A good risk management plan will leverage historical temperature data specific to a manufacturer’s product to help determine potential scenarios that could occur. Companies should work with their 3PL providers to design scenario-specific action plans, including multiple back-up options and supply chain redundancies.
10. Going through the journey alone
A company’s supply chain partners are essential in getting their temperature-sensitive products to customers at the right time and in the right condition. Having a partner with a strong global network is important to ensure that companies can cover all key lanes where products need to go. One should choose partners based on their expertise and network, proven ability to execute and willingness to stand behind their service with actionable quality programs. There are 3PL providers that have deep expertise in handling temperature-sensitive shipments and can also help companies gain efficiencies while protecting their products.
All of the above areas are part of the temperature-sensitive supply chain management puzzle, and all are important for ensuring product protection. Far beyond just avoiding pitfalls, focusing on the above areas can create a competitive advantage for pharma and biopharma manufacturers. Temperature-sensitive products are the wave of the future in the life sciences industry and they require a new supply chain model. To get ahead, manufacturers must plan ahead. When it comes to understanding the logistics of temperature-sensitive product distribution, don’t be left out in the cold.
Justin Bates is a director of marketing for UPS’s Healthcare Logistics Global Strategy group. He can be reached at firstname.lastname@example.org.