Shipping: Proactive Risk Management

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The past few years have brought increasingly challenging problems to logistics and distribution. It may come as no surprise that some pharmaceutical manufacturers have job titles in place such as “Director of North America Supply Chain Complexity Management” (1). Some companies, however, may be relying on outmoded technology to handle these problems. Further complicating the picture is a fragmented network of multimodal transportation services that are charged with moving more valuable, often irreplaceable, time- and temperature-sensitive products, says Dan Bell, vice-president, Regulatory Compliance and Technical Affairs for Marken. As he puts it, “We’ve come to expect the unexpected.”

Over the past few years, Marken says, logistics companies have seen Murphy’s law play out in every possible way, from fuel tanker fires shutting down airport terminals to volcanic ash clouds blocking air traffic for entire continents, to labor disputes and political conflicts disrupting shipping at ports. In addition, recent epidemics such as the Ebola and Zika virus outbreaks have challenged companies’ ability to react quickly to the need for services, while ensuring staff protection and the safe handling of biological samples and vital vaccines.

Supply-chain risk assessment and management are a new focus
The best defense for any pharmaceutical manufacturer is having a firm understanding of supply chain risk, and better control over suppliers and transportation and logistics partners. Johnson & Johnson (J&J), for example, has strengthened its supplier risk assessment and management program to monitor suppliers and assess multi-tier supplier risk, Chris Calabretta, J&J Global procurement lead, biologics and vaccines, told attendees at a biopharmaceutical forum examining global trends at the Drug, Chemical and Allied Trades Association’s (DCAT) annual meeting on March 16, 2016.

“We’re focusing on the three Rs: reliability (i.e., on-time reliability and quality), risk (i.e., the type of risk in the product and raw materials supply chains), and readiness, or assessing whether our suppliers are ready,” Calabretta said. The goal is to identify key risk indicators and assess the company’s exposure.  

The company has set up an enterprise business process and playbook, integrated across functions, that will use market intelligence to mitigate, communicate, and manage risk, Calabretta said. Technology will be a critical part of this strategic approach to supplier and shipper management.

J&J is using Elementum, a mobile app that allows the company to monitor potential supplier events, in real time. Armed with these data, designated corporate centers of excellence can focus on specific issues and issue real-time reports on specific supply chain risks.

Mobile apps help with risk management
Elementum, a spinoff of Singapore-based Flextronic International, was launched in 2012 and released its first commercial apps in 2014. The app uses a cloud-based platform that allows manufacturers to manage specialized facets of supply chain, whether logistics, suppliers, or manufacturing. The platform is designed to be deployed quickly and to offer one single view of the issue at hand.

Flextronic’s annual report (2) describes the platform as leveraging the concept of the “Intelligence of Things,” using smart connected devices to reduce the risk and cost of supply chain management, where every day lost on product delivery can add up to $65 million in lost revenues.

Another app, commercialized in 2015, is KPMG Spectrum’s Intelligence Engine, designed to detect third-party network vulnerability (3). The platform analyzes and mines global financial and geopolitical risk data for 12 different categories of suppliers to assess potential threats, and KPMG claims that it can allow some risks to be predicted 16 weeks before they can result in any significant market impact.

Technology can simplify the process
Technology is not a silver bullet for trouble-free shipping, but it can make a complex process more feasible. Marken’s chief commercial officer Ariette Van Strien and Dan Bell, vice-president of regulatory compliance and technical affairs, shared perspectives on distribution challenges with Pharmaceutical Technology.

PharmTech: We have been hearing how global positioning system (GPS)-enabled technologies are allowing shipments to be tracked anywhere. What other technologies work in synergy with GPS-based platforms, and how are specialist service providers and couriers collaborating to ensure that product is shipped safely and on time?

Van Strien: Marken Sentry is a GPS-enabled sensor platform that allows location tracking and environmental monitoring. Through exception alerting and geofencing (i.e., placing a virtual fence around an area and monitoring the area so that alerts are received whenever tracked mobile objects enter or leave), we can manage security and real-time sensor alerts and ensure contingency plans can be activated as soon as possible. Armed with real-time data, Marken can work with airlines and ground transportation companies to build dedicated teams that have access to the same information and understand the unique needs of pharmaceutical shipments.

Bell: We are also testing an automated milestone-reporting system that uses both GPS and radiofrequency identification (RFID). This will allow key points along the supply chain to be monitored and confirmed. This approach is especially important for cell, gene, and immunotherapy shipments where critical events must happen in sequence and be logged in real time. Tracking individual vials of medicine down to the vial is possible using RFID.

Many of the recent advances have been in software. In the United States for example, the Automated Commercial Exchange (ACE) system implemented for the US Customs office will also bring other government agencies, such as FDA, to a single-user portal. This will allow importers of highly regulated products such as pharmaceuticals to be monitored and tracked through the import process more efficiently. Advances are being made in packaging materials, with more efficient insulating materials such as aero gels and phase change products that allow for more efficient and longer validation times for thermo isolating packaging. Temperature controlled shipments can now use passive packing solutions down to -50 °C.

Collaborating to prevent economic loss
PharmTech: Can you share an example of how collaboration prevented a lost shipment or recalled pharmaceutical product?

Bell: Most recently, a shipment of pharma products rated for temperatures of +15 to +25 °C controlled room temperature (CRT) shipped from Italy to Boston was booked for temperature-controlled service within passive thermo isolating packaging. Airport personnel mistakenly placed the shipment in a frozen room in a 20 °C freezer while it was in airline custody.

An alert was issued from the Marken Sentry device, which reported back to the dedicated operational team and warned of a rapid temperature decline, providing opportunity for immediate intervention. A quick notification was made from Marken to the airline, and within an hour, airline staff moved the shipment to the correct storage location, ensuring that there was no deviation to the product and the shipment was not compromised.

Reverse logistics: a growing trend
PharmTech: Life-sciences companies have been conducting more clinical trials and setting up manufacturing facilities in remote and less developed parts of the world. How do you approach service in these locations?  

Van Strien: One region in which we see renewed interest is the Middle East and North Africa region for infectious diseases and more common ones. Marken has invested in a stronger network throughout Africa including West and Central Africa, as well as the Middle East. Local partners must pass the same audit and selection process as all our global partners, and must confirm their willingness to comply with good distribution practices (GDPs) and quality standards.

We have developed our own network in countries such as South Korea, China, or India, to provide reverse logistics from these countries into Europe and North America. In 2012, Marken opened regional depots in Frankfurt, Germany, Long Island, New York, and Singapore. The Singapore site was built expressly for this purpose, because we saw the trend of manufacturing moving to various regions.

Our regional depots are an integrated part of this new solution. Investigational medicinal product that is manufactured in other regions can be stored at regional depots and distributed just in time to investigator sites throughout Asia, Europe, and the US. We anticipate some manufacturing moving to Central and Latin America, and our five-depot network throughout this region is ready.

References
1. Director of Supply Chain Solutions job description, glassdoor.com 
2. From Sketch to Scale, Flextronics Annual Report, 2015
3. Third Party Intelligence: Access, Analysis, Action, KPMG LLP, 2015

Article Details
Pharmaceutical Technology
Vol. 40, No.4
Page: 70-72

Citation:
When referring to this article, please cite it as A. Shanley, “Shipping: Proactive Risk management," Pharmaceutical Technology 40 (4) 2016.