The changing challenges of supply chain performance

When it comes to pharmaceutical supply chains, cost pressures are merging with shifting production, and time-to-market is becoming more challenging than ever. Geodis Wilson’s Martin Svantesson believes that the answer lies in global solutions, and he says that interaction between freight forwarders and pharmaceuticals has never been greater.

Challenges of the cool chain

The distribution demands of pharmaceutical products are more stringent than for many other types of products. End-to-end logistics solutions in this market segment must maintain 'cool chain' ambient temperature requirements of between two and 25 degrees Celsius. As a result, pharmaceutical companies, manufacturers and distribution providers are constantly working together to develop better ways of securing optimal temperature control for all shipment modes.

However, mode of transport is really not the driver for pharmaceutical companies. Instead, the challenge lies in securing the right type of equipment for specific product requirements for specific markets. In other words, the choice of mode is linked to a company's supply chain strategy for a specific market or region.

Pharmaceuticals are predominately high value goods. As such, they demand a safe process at all hubs in the chain. Security measurements must be harmonised and rigorously checked across the operating lanes, and definitely at sub-warehouses and on/off loading places, which should be kept to a minimum. In fact, the importance of minimising on/off loading places and transport mode changes of is one of best ways to create time-effective and secure solutions. The challenge then moves to cost.

When it comes to the costs of distributing pharmaceuticals, the gap between regular air or sea freight shipments and pharmaceutical shipments has narrowed. The pharmaceutical industry has put two focus areas on their internal map: global supply chain harmonisation, with cross-divisional activities and increasingly centralised decision making, as well as cost-cutting activities, including a comprehensive review of the costs of the full supply chain. These days, companies understand more than ever what they are paying for.

Naturally, these key changes are good for the pharmaceutical industry. But they also provide an opportunity for logistics providers - interaction between these two groups has never been greater. As patents expire for the blockbusters, fierce competition from generic companies is making time-to-market the most important success factor going forward. At the same time, the pharmaceutical industry is seeking to outsource non-core activities. There is room for an innovative solution provider that is willing to go beyond general freight management.

Today's market now demands global solutions, and customers want the ability to lower inventory levels while ensuring correct quantities. As orders become smaller, production and order profiles change. While this is obviously a challenge for distribution, it also greatly increases the value of consolidation possibilities that can meet the lead time demands of end customers.

As the production of high and low value pharmaceuticals is moving to emerging markets it has an impact on solution providers - they need to be where the industry is, so their network infrastructure needs to expand while meeting GDP requirements, and local compliance and competence regulations.

These types of changes in supply chain routines can have dramatic effects if they are not properly implemented at all levels. However, clear communication can greatly reduce their cost. Global harmonisation therefore enhances the possibility of maximising effects in a supply chain. It is this type of harmonisation and interaction between pharmaceutical companies, freight forwarders and carriers that helps ensure supply chain success.

As a company that has worked closely with pharmaceutical sector for many years, Geodis Wilson saw these changes coming down the road, and we realised that optimal supply chain performance would become a vital part of the key winning strategy for pharmaceutical companies. We are going to do our part to make sure all parties understand just how much sales strategy impacts the supply chain, and that time-to-market - with a keen eye on the chosen distribution strategy to and from the warehouse - will help pharmaceuticals be a successful as possible.

About

Martin Svantesson is Vertical Market Director of Geodis Wilson Pharmaceuticals. He has 15 years experience in Global distribution and holds a Masters degree in Supply Chain Management. Svantesson's role is to develop Geodis Wilson's pharmaceutical distribution solution/ proposal for existing and potential pharmaceutical customers, as well as to harmonise a global approach within Geodis Wilson in regards to pharmaceutical handling according to GDP standards.