supply chain in pharmaceutical industry
TRANSCRIPT
SUPPLY CHAIN IN PHARMACEUTICAL
INDUSTRY
Ravi Kumar
VP - Logistics & Distribution
Intas Pharmaceuticals Ltd.
36114.6
43275.9
49399.9
19.8
15
20
25
40000.0
50000.0
60000.0
IPM growth %
Indian Pharmaceutical market IPM over last 5
yrs.
IPM GROWTH
28591.0
32688.0
36114.6
14.3
10.5
14.2
0
5
10
15
0.0
10000.0
20000.0
30000.0
MAT ~ 05/2007 MAT ~ 05/2008 MAT ~ 05/2009 MAT ~ 05/2010 MAT ~ 05/2011
IPM growth %
IPM (CR)
3,403.6
2,544.3 2,334.82,038.7
6.9
5.24.7
4.13.7 3.7
3.3 3.3 3.12.7
2.3 2.3
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
3,500.0
4,000.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
IPM data for MAT 05/ 2011
IPM – HIGHLY FRAGMENTED
2,334.82,038.7 1,845.8 1,840.1 1,639.1 1,613.6 1,546.4 1,330.3 1,153.6 1,133.4
0.0
500.0
1,000.0
0.0
1.0
2.0
� Highly fragmented - Market share of top 10 companies – 40
%
� Intas ranks 12th in the ORG – IMS report
�MNC’s increasing market share with JV’s / Aquisitions
THERAPEUTIC CATEGORIES
MAT ~ 05/2007 MAT ~ 05/2008 MAT ~ 05/2009 MAT ~ 05/2010 MAT ~ 05/2011 Growth in 5 yrs.
IPM 28591.0 32688.0 36114.6 43275.9 49399.9 58%
Anti-infectives 5061.1 5861.7 6328.0 7434.4 8366.3 60%
CARDIAC 2923.8 3577.4 4063.7 4939.8 5646.8 52%
Gastro Intestinal 3181.8 3580.7 3926.0 4695.3 5440.6 58%
Respiratory 2616.3 2918.4 3205.6 3878.5 4274.3 61%
Pain / Analgesics 2663.2 2858.0 3131.9 3739.3 4220.9 63%
Vitamins / Minerals / Nutrients 2419.1 2614.1 2788.6 3351.0 3823.0 63%
Anti Diabetic 1312.7 1676.9 1909.7 2444.6 2995.0 44%
Neuro / CNS 1535.6 1771.0 1982.2 2423.9 2800.6 55%
Gynaec. 1573.8 1838.7 2086.0 2509.9 2797.2 56%
Derma 1582.4 1762.4 1994.8 2375.9 2723.0 58%
Others 505.8 686.2 812.1 984.2 1114.0 45%
Lifestyle /
Environmental
change diseases
SCM IN PHARMA INDUSTRY
� Demand Planning
� Sourcing
� Production planning
� Distribution Planning
Logistics Execution & CFA Management� Logistics Execution & CFA Management
SOURCING ( PURCHASE )
� Aggressive negotiation skills
� API - Backward integration wins
� Adds to bottom line
� Reverse Auctions work well
� Domestic VS Import decisions� Domestic VS Import decisions
� Duty benefits against exports ( Ad. Lic. / DEPB )
� Cost reduction without compromising on quality
DEMAND PLANNING
� Forecasting mainly depends on
� Long term Corporate vision
� Seasonality and Market Forces
� Brand Focus & Promotion
� Competitors activity� Competitors activity
� Higher Inventory is acceptable vis-à-vis Stock
out
� Inventory cost is lower than Gross Margin
� Fear of brand replacement
� Demand generation is a long processHigh Order to Cash cycle
(120–180 days )
FORECASTING ACTS AS A DRIVER FOR
THE PLANNING PROCESS
Controllable Internal Events
Uncontrollable External Events
ForecastingDecision Making
Planning
PRODUCTION PLANNING
� S &OP / ORM
�MRP / MPS / RCCP
Key deliverables
�Make - Buy decisions
Low Reaction time to market ( Postponement )� Low Reaction time to market ( Postponement )
� New product planning and aggressive launch
� Capacity utilization
� Accuracy in scheduling and availability dates
� Regulatory changes leading to delays
� Contract manufacturing to share idle capacity
Prioritize backlogs
Prioritize key SKUs
of strategic marketsFinalize
unconstrained
demand req.
Incorporate gaps between
Key SKUs decided based on:
� Strategic Importance
� Planned promotions
� Planned new product introductions
� Focus products
� Financial Importance
� SKU Contribution as a % of total market
S&OP PROCESS
Conduct “what-ifs” and
evaluate multiple options
Prioritize firm
customer orders
(tenders etc.)
Monthly Pre-S&OP Process
Conduct RCCP
and develop
feasible solutions
Incorporate gaps between
requirements and
committed plan in the
next DRP
Post S&OP Process
S&OP
DISTRIBUTION� Domestic Distribution
� Primary Transportation � AIR cargo
� Surface cargo
� Full truck movement
� Part loads
� Express cargo
Multi Modal
�Warehousing
� Inhouse
� Outsourced
� 3 PL
�Multi Modal
� Train
� Secondary transportation – Primarily by Road
� International Logistics
� AIR Cargo
� Ocean
� Multi Modal
Inhouse
Manufactur
er
Regional
Warehouse
1
CURRENT DISTRIBUTION NETWORK
Regional
Warehouse
2
Regional
Warehouse
3
Contract
Manufactur
er
C & FA
StockistGovt.
Institutes
Chemist Hospitals /
Clinics
CHALLENGES IN PHARMA SUPPLY
CHAIN
� Development of new formulations
� New Drug Delivery System ( NDDS )
� International Patent Regime
� Demand Management / Seasonality
� Counterfeiting / Spurious drugs� Counterfeiting / Spurious drugs
� Cold Chain management
CONTENTS
� What is Cold chain
� Why Cold chain
� Cold Chain breaks
� Impact of Cold Chain Breaks
� Probable causes of Cold Chain breaks
� Factors Effecting Cold Chain transportation� Factors Effecting Cold Chain transportation
� Regulatory environment
� What needs to be done
� Packaging solutions
� Indicators and Early warners
� Cold Chain Policy – Systems Validation
� Cold Chain implementation plan
� Recommendations
WHAT IS COLD CHAIN
• Cold Chain is becoming more & more Important and Essential in the Indian Pharma Market.
– Increasing No of Products
– Increasing importance of cold chain products in Healthcare.
Definition:
• ‘Cold Chain’ is a Storing & Transporting the Pharmaceutical Products at ‘Recommended’ temperatures from the point of Manufacturing to the point of use. Manufacturing to the point of use.
• ‘Cold Chain’ is an uninterrupted series of storage and distribution activities which maintains prescribed temperature range as per the respective product requirement right from the point of manufacturing to point of consumption.
• Broadly there are three categories of Cold Chain Products.
– Product Stored Between -10 to -20 ℃
– Product Stored Between 2 to 8 ℃
– Product Stored Between 15 to 25 ℃
WHY COLD CHAIN
Growing logistics/distribution needs for high quality life sciences products due to
� Demographic Changes
� Global warming
� New Markets – longer transit times
� New Product Trends – Biologics, Drugs with Larger Molecular Structures, Highly Complex Compounds and new Biotech products
� The expiration dating of licensed products is based on the stability data collected over time on a product stored within a recommended collected over time on a product stored within a recommended temperature range
� Vaccines contain live virus / bacteria
� Increased rate of local reactions after vaccine
Further impetus if provided by � Regulatory pressures
� Quality pressures
� The distribution process, much unlike the manufacturing process does not operate under a highly-controlled environment.
CONTROLLINGCOLDCHAIN....
Responsibility maintain the safety and efficacy of drugs
• Supply chain plays a critical role in same by effective management of the un- interrupted cold chain movement.
The key Challenges in effective Cold Chain Movement
• Inadequate strong infrastructure suitable to cold chain movement creates challenges to SCM function.
– Cold Storage Hubs at Sea Ports & Air Ports
– Effective freight movement system.– Effective freight movement system.
• The manufacturers are taking utmost care to ensure that the cold chain is maintained till the supply is done to distributors/ stockiest through it’s C&FCs / Depots.
• The lack of facility at many stockiest creates concern for cold chain movement in the secondary phase of transportation & storage.
Present Mode of Movements:
• Surface (With adequate Coolants placed inside)
• Air Courier(With adequate Coolants placed inside)
• Refrigerated Van
PRODUCTS WHICH REQUIRE COLD-
CHAIN
� Vaccines
� Biological products
� Insulin
� Hormones
� Blood fractions & reagents� Blood fractions & reagents
� Some antibiotics
� Some diagnostic and laboratory reagents
� Dairy Products, Frozen foods
� Fruits and Vegetables
� Fish and Meat
TEMPERATURE-ABUSED PRODUCT IS AN
ADULTERATED PRODUCT
� Potency disturbed, impacts the shelf life of product
� Increase in impurity levels
� Vaccine efficacy grossly suffers
� Some vaccines are sensitive to heat others can get damaged by
freezingfreezing
� Alternate lower & higher temperatures can cause ampoules to
crack and leak
� Change in color
� Sediment formation
� Leading to regulatory blacklist, product withdrawal
COLDCHAINBREAKS
Factors Affecting Cold Chain Management?
• INFRASTRUCTURE for uninterrupted requisite storage condition: This involves Primary Movement Storage at CWH/ C&FC & Secondary Movement to Stockiest.
• PERSONNEL : Trained Personnel at CWH / C&FC as well as at the secondary phase of Product movement.
• EQUIPMENT : Right equipments for storage and transportation of the Products. Frequent validation of the Storage equipments should be carried out. Backup system must be available in case of failure of carried out. Backup system must be available in case of failure of primary equipment. Use of data loggers for continuous temperature monitoring.
• PROCEDURES : To ensure that the Products are stored and transported at appropriate storage condition. The required information of cold chain handling (Packaging / Movement) is available with key personnel.
• MONITORING: To ensure the personnel are working effectively with available equipments & infrastructure under the given procedure.
A case study conducted recently indicated 40% of all temperature
Sensitive shipments had deviations to SOP’s
WHERE ARE THE GAPS
AIRPORTAIRPORTWAREHOUSEWAREHOUSE
MODE OF TRANSPORTATIONMODE OF TRANSPORTATION
CARRYING AND FORWARDING AGENTSCARRYING AND FORWARDING AGENTS
…..…..VEHICLEVEHICLE
PRODUCTIONPRODUCTION
Process Flow from Manufacturing to
patient
PATIENTSPATIENTS
STOCKIST & STOCKIST & CHEMISTCHEMIST
Controlled Process with proper
documentationWorking under process for proper control
Not under control, work has to be done for better
compliance & adherence to standard procedures
R4
Distributors
Hospitals
Clinics
Physicians
More
Risk
High
Risk
Manufacturers
Importer
Distributors
Low
Risk
Most Secured Least Secured
PROBABLE CAUSES OF COLD CHAIN BREAKS
• Inadequate planning prior to shipment.
• Improper timing of shipments eg. Shipping at weekends.
• Lack of communication between sender and receiver
• Delay in clearing cargo from airports due to inadequate
documentation or heavy traffic at airports.
• Cold rooms not initially qualified
• Calibration is missed on temperature probes
• Chart recorder malfunctions
• Alarm does not alert operators• Alarm does not alert operators
• No documentation for recording, storing and review of temperature
monitoring data
• Inadequacy of Refrigerated van /Packaging solution to maintain
cold
chain during transportation.
• Power failure at storage locations due to equipment failure or
natural
disaster such as heavy rains.
• Inadequate or no generator back-up for cold rooms.
• Improper management in the event of cold chain break could
result in
damage to the product.
• Packaging material to have very high properties of insulation
• The product must be packed in appropriate Packaging
Material with sufficient Coolants.
SIGNIFICANCE OF PACKAGING IN COLD
CHAINMOVEMENT?
Material with sufficient Coolants.
• The no of coolants must be determined based on proper
validation study carried out during the transit time between
two destinations.
• The stability study should be available for the assessment of
minimum temperature excursion
• Should have minimum weight so as to make it more friendly in
handling
• Labeling instruction should be clear and visible for everyone to
understand
Active Cooling Solutions Passive Cooling
Solutions
Is there one common packaging
solution to meet all requirements?
To what extend do you validate
your packaging?
Do you monitor it’s performance?
STRATEGY – BEST SOLUTIONS
Do you monitor it’s performance?
Does it meet product label
requirement in transport today?
Are your service providers
prepared to properly manage your
packaging solutions?
(handling-storage-asset and
SOP-management)
PASSIVE COOLING
� Thermocol boxes – Feasible for not more
than 72 hrs. transit
� Cool Boxes
� Pallet Boxes
� Thermal Blankets - Precautionary
TEMPTIME CORE TECHNOLOGIES
APPLIED TO ADDRESS UNMETMARKET NEEDS
Core Products
Freeze
39
Cumulative
Heat
Delayed Heat
Threshold
Instant Heat
Threshold
Cobalt wireless Datalogging solution from Oceasoft France
System Configuration
INTEGRATED WIRELESS FACILITY AND
TRANSPORT MONITORING SOLUTION
Cobalt radio Modules Cobalt radio Modules
with sensorwith sensorCobalt Radio Cobalt Radio
Receiver and Receiver and
Repeater Repeater
Thermo software ( server/ client Thermo software ( server/ client
based) based)
Facility Monitoring Solution
• Wireless Datalogging System
For monitoring Single location Multi location
•
INTEGRATED WIRELESS FACILITY AND
TRANSPORT MONITORING SOLUTION
Transport Monitoring Solution
• GPS/ GPRS based fleet management system combined with
wireless Datalogging System
INTEGRATED WIRELESS FACILITY AND
TRANSPORT MONITORING SOLUTION
HOW WE CAN IMPROVE EFFICIENCY &
MINIMISE VARIANCE – IMPLEMENTATION PLAN
� Shipping Qualification protocol
� Cold chain logistics quality policy
� Temperature range stipulation on all documents
� All stake holders concurrence and adherence
� Determine product limits
� Suitable staff training
� Self and third-party audits
Recommendations
� A unified body to have Industry – Govt. linkages and set
guidelines. ( Cold Chain council )
� Special focus has to be given to the subject which should
encourage investments
� To have written dispatch and delivery procedures
� All stake holders need to contribute from Ethical stand point
NOT only from Commercial stand pointNOT only from Commercial stand point
� Efficient monitoring mechanisms
� Plan time defined delivery – Minimum transit time
� Proper labeling for Storage and handling conditions
� Plan for smaller shipments
� Temp. Recording checklist through out the transit