The Future of Serialization

Serializing drug products and managing serialized product operations is a fact of life for pharma’s manufacturers and their supply and distribution networks, and by now most of the industry has come to grips organizationally to meet the mandates of the FDA’s Drug Supply Chain Security Act (DSCSA), as well as those of the EU FMD and Russia among other global regulators. 

The industry’s responsibility to put a “bar code on every box” is well established, and as the regulations take hold, serialization is beginning to have a positive effect on the security, stability and reliability of pharma’s global supply chain.

Now perceived as a necessity before products can reach markets, industry’s attitude towards serialization is that it is simply the cost of compliance and that companies can return to “business-as-usual” after going live in a regulatory market. This belief is not only becoming increasingly unsustainable, it is leaving significant opportunity on the table for pharma companies.

Compliance is more than just reporting. It requires orchestrating business processes across packaging, importation, sales, exports and returns across CMOs, 3PLs, Customers and regulators on a continuous, ongoing basis. Large manufacturers must meet continuous compliance across multiple regulatory markets, making it even more critical to regard serialization as a vital business process and follow best practices to operate at high efficiencies.

In addition, it is becoming clear the industry can no longer afford to dismiss serialization data or ignore its transformational business value. This transformation will only start when companies deliberately align their serialized products and reporting systems with a strategy for leveraging serialized data across the enterprise.  In short, serialization data, when harnessed, can become the backbone of the digital transformation of your supply chain/value chain.

Finally, a focus on “business as usual” implies trying to integrate serialization and compliance into previous operational processes and business practices that were not designed to take advantage of these new information streams. So, rather than taking a step back, why not focus your business on pushing the goal line further out?

A headache of global proportion
Today, companies are struggling to cope with a massive data overload, while managing the varying serialization and reporting requirements of national governments and global regulators. Combined with legacy systems and practices, new sources of disruptions are making it increasingly hard for manufacturers to stabilize serialization operations and manage compliance risk and costs.

The recent experience of a large multinational pharmaceutical manufacturer may offer a familiar and cautionary tale. Since serializing its product lines for global compliance, the company has experienced a 20% increase in operating overhead, pointing to a growing number of exceptions caused by serialization, as products moved from plant to patient across global markets.

The challenges faced by this pharmaceutical manufacturer are not unique when it comes to managing serialized operations. In a recent TraceLink survey,¹ 59% of manufacturers said they spend way too much time and effort on manual data analysis to ensure that their serialization program is running smoothly and to avoid any issues or exceptions. When exceptions do happen, 58% of manufacturers are concerned that process exceptions caused by serialization will prevent their products from reaching patients.  If not addressed, these exceptions can continue to mount, and in the process, undermine operations and drain resources, leading to lost sales, expired inventory, stalled shipments, supply shortages and irreparable damage to brand and reputation.

Failure to resolve a costly issue
As serialized process exceptions build up, so too can compliance problems, as well as fines and other liabilities—all costs that are preventable through better practices and operational approaches to managing and leveraging serialized product data.

Also found in the recent TraceLink survey,¹ the average duration of a serialized process exception lasted two days and held up as much as $500,000 in stock per event. For large manufacturers experiencing three to four disruptions, the analysis estimated up to $100 million worth of products held in inventory can occur annually.

For the most part, pharma’s usual approach to managing and resolving exceptions involves a phone tree list of manual processes and error-prone information sharing across disparate platforms including text messages and emails. This is certainly not sustainable or operationally robust enough to keep up with the intensive pace of global business.

To mitigate serialized process exceptions, operations teams first must determine its cause. Data is downloaded manually and analyzed from a variety of sources, including provisioning data, commissioning data, shipping and receiving data and compliance data.

For urgent issues, this can start a race to reconciliation to “unstick” inventory and perform serial number reconciliation before the products can be released. Each minute of delay can escalate operational pains and costs very quickly.

The power of proactive serialization data management
While serialization offers pharma a rich mine of data, it will only yield informational and transformational value once business and operations managers change their mindset about how to leverage serialized data to boost their operations. Treating serialization as a core business process and even the backbone of a company’s digital transformation will help increase the return on serialization investments by unlocking the value of product and event data, and even become a competitive advantage.

It has become evident that serialization can introduce complexity in many companies’ operations, becoming an increasing time and resource drag for pharmaceutical manufacturers to manage exceptions. However, serialization teams that take an intelligent, data driven approach can not only expect to solve exceptions and disruptions much quicker, but also apply gain visibility across their serialized supply chain. What if your serialization data could offer precise, real-time visibility into inventory across the network? Improve sales forecast accuracy? Improve New Product Introduction? Reduce expiring inventory and improve inventory allocation during a time when supply and demand are fluctuating by a big margin?

Equipped with the right data platform and analytical tools, it is possible to free up resources, achieve operational excellence across compliance and serialization operations, and implement new data-driven business practices.

Take control of your serialized supply chain
As pharma manufacturers and their contract partners serialize drugs and ship them around the world, supply chains will need to be closely monitored to achieve continuous compliance and prevent supply chain disruptions that occur from the complexity of global regulations. These ongoing challenges will only serve to highlight the necessity of gaining as much intelligence as possible from serialized product data. Think “use information” not “manage data.” 

References

1. https://www.tracelink.com/insights/taking-control-of-your-serialized-supply-chain-industry-benchmark-results-infographic

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Barath Sundararaman joined TraceLink in 2019 after ten years at Merck KGaA, where he most recently led the digital transformation of the company’s global manufacturing and supply function into a machine-driven, “self-driving” supply chain. His work has been covered by the Wall Street Journal, CIO Online, Forbes, and other popular media channels.