Reducing Blind Spots in the Pharma Supply Chain

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It has become painfully clear in recent years that potential supply chain disruptions across all industries have become more the rule than the exception. Such disruptions arise when manufacturers experience short-term or prolonged shortages in raw materials, packaging materials, and/or critical components and are then unable to produce a reliable output of finished products or deliver them on time to their own downstream customers.

For pharma manufacturers, such issues increase business risk, create unnecessary costs and product losses, and increase the likelihood of drug shortages. Today, a range of parallel efforts are underway to address them. These include the expanded use of affordable monitoring solutions, increased overall digital connectivity among a larger number of players up and down a given supply chain, and advanced modeling capabilities to make sense of the real-time data. Such efforts aim to analyze and model large data sets using machine learning and artificial intelligence (AI) techniques and other modeling modalities.

“The goal is to develop advanced insights and predictions under changing scenarios to enable earlier, data-driven interventions that can help to avoid supply chain interruptions—before they occur,” says Emanuel Schapper, term leader, key account management, Elpro Global.

“The effort to improve supply chain visibility is essentially an inventory
-management strategy that involves using advanced techniques to improve the allocation and orchestration of products and shipments to achieve better outcomes,” says Vivian Berni, director of product management and strategic marketing, Sonoco ThermoSafe. “Improved visibility allows you to see what inventory is with your suppliers in your distribution center and in your warehouse at any moment—and understand what’s going on with your suppliers and your customers—so you can take the necessary steps to accelerate order fulfillment and exceed customer expectations while keeping operating costs low,” she adds.

“The idea of transparency carries more weight than it did years ago,” Berni continues, adding that such efforts are especially important in the pharma industry, as pharmaceutical companies routinely outsource key segments of the process—such as packaging, logistics, distribution, and more—to third-party partners, amplifying the potential risk of disruption.

“It is essential to map the supply chain both upstream and downstream and to perform a proper risk assessment,” says Ben VanderPlas, director of engineering and R&D, Sonoco ThermoSafe. Meanwhile, VanderPlas notes that establishing regular audits, quality agreements, and standard operating procedures with all suppliers is also essential to reduce risk and eliminate supply chain blind spots.

“As audits uncover issues, each finding should be categorized according to risk (major, minor, recommendation) and an action plan must be developed with the supplier to address each concern,” VanderPlas adds.

“We have all these islands of information and all these people working in the supply chain, but we just don’t share the right information as effectively as we could,” says John Bermudez, vice president, product marketing, TraceLink. “Increased visibility among all upstream and downstream supply chain helps pharma manufacturers detect issues sooner, inform decision making, and enable data-driven interventions to prevent more costly and disruptive problems.”

“[During the COVID-19 pandemic,] the pharma industry got a very rude awakening that the way that companies run their supply chains was not very good,” Bermudez continues. “Historically, many pharma companies used a very basic approach, saying, ‘If we maintain two years of inventory, we’ll always be able to ship on time.’ But during the early months of the COVID pandemic, products for which they had held a two-year inventory ran out in two months. That’s not a very agile supply chain.”

Turning insights into action

“As the level of global interconnectivity continues to grow among supply chain partners, technical and compliance challenges must also be addressed to ensure data integrity and enable traceability and audit trails,” says Schapper. “More work needs to be done to figure out how we can validate distributed systems, software, and databases, as well as critical supply routes, and whether the current regulations and guidance are still applicable for the possible digitized systems of the future.”

Similarly, increasing end-to-end visibility within a supply chain “[i]s an ever-changing process because new technologies and opportunities are
introduced every day to improve operations and results,” says Berni. “This is not an area of business where you can simply integrate solutions and consider it done.”

“As a packaging manufacturer and service provider that takes possession of critical pharma products while en route, our role is to reduce [the] risk for our pharma customers as time- and temperature-sensitive pharma products are moving through city streets, interstate highways, and international airspace,” Berni continues, adding that today’s innovative packaging options are designed to both secure pharma deliveries and support improved supply chain visibility. The options range from lightweight insulated recyclable shippers to plug-and-play rental services to high-tech air freight containers and containers for bulk transportation.

Real-time monitoring capabilities integrated into cold chain packaging yield insights into what’s potentially going on right now along the route.

“Intervention can be further enhanced by being able to predict the performance over a given route or shipping lane using existing data sets, ultimately mitigating the risk of potential product spoilage,” says Alyssa Roberts, director of global product management, CSafe Global.

State-of-the-art containers are equipped with an integrated telemetry system to provide critical real-time, cloud-based data on both payload and ambient temperature and key environmental factors, precisely synchronized with GPS location while maintaining the payload at the required refrigerated or frozen temperatures, adds Berni.

Increased digitalization helps to connect the dots

Increased investment in supply chain digitalization is essential and can yield many dividends, according to Bermudez. These include improvements in:

• Transparency. Improving product availability, change management, and the handling of recalls.
• Traceability. Supporting anti-counterfeiting and product diversion effort.
• Visibility. Reducing upstream material shortages and downstream shipping delays and help capture key performance trends for ongoing process improvement.
• Collaboration. Integrating suppliers more effectively and enable greater operational flexibility.
• Sustainability. Safeguarding the business and clinical objectives of both pharma manufacturers and patients over time.

“If—despite precautionary measures being taken—shipping delays still occur, the ultimate consequences will depend on how much data is available to demonstrate relevant product quality,” says Schapper. “For instance, when shipping temperature-sensitive pharma products, access to [real-time] monitoring data related to the temperature, humidity, duration of travel, open-door events, and other factors that could imperil product integrity can help stakeholders to prove that despite the delays, the product stability and quality were not corrupted, which allows the products to still be released for patient use.”

Prewave, a company that specializes in supply chain visibility, has pioneered a data-gathering process to yield timely alerts for stakeholders.

“We analyze the direct suppliers of our clients and map out their supply chain down to the raw material. The data allows us to screen suppliers and generate a risk score,” says Miriam Jonas, industry specialist for pharmaceuticals, Prewave. Specifically, the company’s monitoring system gathers publicly available information about the client’s suppliers, which may range from posts on social media about human rights issues to local newspaper reporting to a regional risk of COVID infection due to a supplier’s particular location.

“We generate risk alerts for these events, which are displayed in the Prewave system,” Jonas continues. “Our customers can then track the types of factors impacting their suppliers and get alerts in real-time to factors that could interrupt upstream supplies—many of which have not been announced by the company.”

“If pharma manufacturers are not aware of, say, multiple fires at a given raw material supplier’s site, the impact on the availability for that commodity could impact the entire supply capacity, and even if the news eventually ripples through the supply chain, having more time to react to it—and pivot to an alternative source for that strategic material—can provide a significant advantage in the long run,” says Jonas.

“We’ve been working with a consortium of pharma companies, and one thing they’ve consistently asked for is the improved capability to use TraceLink data to predict shortages,” says Bermudez.

Toward that end, TraceLink has developed AI-based “collective intelligence capabilities” to analyze just the shipments from pharma companies and the receipts of drug dispensers.

“We’re looking at the mismatch using machine learning capabilities to predict shortages even more accurately to allow for preventive measures to be taken before the crisis,” says Bermudez.

Bermudez emphasizes that, no matter how effective the technology-based elements are, the human element cannot be overlooked.

“The system must alert the right people when things change so [that] they can collaborate with their peers to make decisions that cannot be made with data alone,” says Bermudez.

Consider, for example, the prolonged shipping bottlenecks that occurred in 2021 in the Ports of Los Angeles and Long Beach in California, which created weeks of delays when cargo ships piled up without the resources needed to unload and reload them or the prolonged cargo shipping crisis that resulted after a 2021 shipping accident jammed up the Suez Canal.

“This past spring, supply chain professionals continued to send cargo through these pinch points despite the known extended delays we were all experiencing,” says Bermudez. “We know it can only take 30 to 40 days for a cargo ship from China to reach the US; so, it made no sense to put cargo on ships headed to ports with a 40-70 day backup… Either they didn’t have the required visibility, or they didn’t understand the implications.”

By contrast, freight forwarders with the right visibility could have
redirected many cargo ships that normally go through the Port of Long Beach to Jacksonville, Savannah, Charleston or Oakland, Bermudez adds, which would help to reduce the glut in that port and preventing losses (in terms of missed sales and spoiled products) that resulted when shipments ended up being 40 to 70 days late. But companies can’t be that nimble if they don’t have full insight into what’s going on up and down the supply chain.

Initially introduced to reduce drug counterfeiting and improve track-and-trace capabilities, serialization also plays a growing role in expanding supply chain visibility today, says Bermudez, helping pharma companies to:

• Verify product identity and products as they move through supply channels
• Develop and deploy rules-based serialized product identity profiles based on business and market needs
• Track and manage products across internal packaging and other external partners
• Create a single source of truth for critical product, copay, and partner master data across the supply chain
• Manage serialized inventory, events, and operational workflows to connect the physical supply chain with the digital network.

“Ongoing barriers are not really related to the available system or technological capabilities,” says Bermudez. “Such systems are coming along, and we are already able to connect tens of thousands of entities to improve overall supply chain visibility.” Instead, Bermudez says that greater commitment is needed across the entire industry.

“One of the biggest barriers to better supply chain visibility is that the industry as a whole has not yet invested the time, resources, or effort that is needed to move to the next level in terms of predictive modeling,” adds Roberts. “Interaction and integration with all the stakeholders in the supply chain are key to be able to use real-time data to inform efforts to avoid disruption and increase overall supply chain integrity and reliability.”

About the author

Suzanne Shelley is a contributing editor at Pharmaceutical Technology.

Article details

Pharmaceutical Technology
Vol. 46, No. 9
September 2022
Pages: 30-33

Citation

When referring to this article, please cite it as S. Shelley, “Reducing Blind Spots in the Pharma Supply Chain,” Pharmaceutical Technology 46 (9) 2022.