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How Drug Maker Secures Integrity of Its Pharma Supply Chain

Meeting mandates to protect the pharmaceutical supply chain from counterfeit drugs is no easy task, but Johnson & Johnson Supply Chain has found a way to do so well before U.S. legislation kicks in and while reining in costs.

How Drug Maker Secures Integrity of Its Pharma Supply Chain

Drug manufacturers worldwide are preparing for one of the most vital and comprehensive challenges ever faced by the industry - total security of the world's drug supply throughout their lifecycle.

The challenge involves pharmaceutical manufacturers as well as wholesalers, distributors, retailers and suppliers. It will be pervasive and complex and will require a fundamental change in the way the industry thinks about, manages and moves inventory.

Johnson & Johnson Supply Chain is at the forefront of the effort to ensure the integrity of the drug supply. Through their planning, investment and commitment, JJSC has built and implemented one of the first systems to comply with new federal and global regulations that will protect their drug supply, years ahead of the mandated schedule. In the future, every drug that passes through the JJSC supply chain will be serialized, and will be tracked at each point along the way. Within their distribution centers, their innovative approach relied on the agility of an adaptive software platform making the design and development quicker to implement, much less expensive, and far less risky to their business than traditional alternatives.

In 2013, the U.S. Congress passed the Drug Supply Chain Security Act, borrowing heavily from California and Florida mandates. The DCSCA superseded the state laws in both scope and timing, pushing dates for full serialization and compliancy into 2023, with milestones in between for phased tracking and recording.

JJSC quickly recognized that compliance meant major changes were needed to systems, processes, equipment and packaging as well as inventory management. These changes would need to be undertaken by their manufacturing plants and DCs, in coordination with suppliers and customers.

Looking beyond the challenges of physically serializing their packages, they also delved into the scope of changes they would need to make to their systems for track and trace — in both the warehouse management and control systems. Further, JJSC knew they would need to build a serial number repository database for the exchange of serial information. An even greater step involved building the integration layer for reporting product serial numbers for their entire supply chain community.

Within the DCs, JJSC investigated whether to build the solution onto their existing WMS or to replace the legacy WMS altogether. They decided on the former, but challenged the team to build the solution so it would complement their eventual move to a new WMS platform. At the same time, JJSC decided to move forward with barcoding technology for labeling with a vision to use RFID in the future.

In the U.S., JJSC operates a distribution center in New Jersey and another in Kentucky. Both used the same WMS with an integrated WCS, which manages the physical flow of containers. However, the operations were running on different versions of the WMS software. The decision to retain the WMS necessitated a full upgrade of the WMS and WCS so that both DCs would have exact versions.

Recognizing the increased volume of data that serial number tracking would entail, JJSC also decided to purchase a new suite of servers for the systems. JJSC recognized that they would need a new integration layer to pass serial number information between systems. This included the ability to transmit serial numbers to and from SAP AII, but also to exchange information between the WCS and WMS.

JJSC built a team of experienced resources to develop a new process design. The design team had to consider not just the standard process but to anticipate exceptions and events involving damaged goods, goods with labeling issues, inventory discrepancies, returns and issues involving data transmission errors.

JJSC needed to determine the extent to which serial numbers would need to be tracked in the distribution operation. The key consideration was use of a parent/child structure for tracking serial numbers. That is, when manufactured, the serial number of each sellable unit (the child), whether a case or an each, would be associated to the pallet (the parent).

In this manner, where pallet homogeneity was maintained, a “goalpost” approach of capturing numbers as they arrived and as they are shipped would be sufficient to provide an acceptable level of reliability. However, where that homogeneity was released, such as when a case was pulled from a pallet for fulfillment, JJSC determined that the child units would need to be positively tracked as they moved within the operation.

Given JJSC’s culture of strict standards for inventory accuracy and reliability as well as recognition of exception processing, JJSC determined to implement a solution that would provide maximum verification in the process.

Innovation Solution

Once the decision was made to retain their legacy WMS, JJSC investigated the cost of creating the serialization capabilities within the WMS. Not only was the investment going to be expensive, it would take far too long and force JJSC into a riskier position involving more pervasive disruptions to the operations. JJSC looked to using adaptive software to solve these challenges.

Adaptive software tools essentially automate the process of building new code to extend and/or enhance the life of existing systems. Doing so empowers the user to customize and personalize solutions, with minimal or no changes to source code. Adaptive software can be used to create new RF message streams, new screens or reports. Because these tools have automated functions, much of any solution can be built through point-and-click selections to configure new features and create a decision path for an entirely new process flow.

This innovative approach yielded results and benefits beyond expectations. JJSC already had an adaptive software tool in use with their WMS at one of their operations. The adaptive software platform that JJSC uses is called STEPLogic, developed by DMLogic of Pittsburgh. The platform is designed to enable users to create new functionality as an alternative to or as a replacement for existing WMS functionality.

The use of STEPLogic fit well with the multiple challenges faced by JJSC in terms of mitigating risk and expense, while implementing a solution that met the rigors and timeline of the mandates. This meant that JJSC could be flexible in applying “spot solutions” affecting their systems only where change was needed. This allowed them to avoid changing source code which would impact large modules of the system.

As an example of developing spot solutions, JJSC designed their receiving operation solution to treat homogenous pallets differently than mixed or partial pallets. Relying on the integrity of the inferred parent/child relationship, JJSC recognized that the existing WMS was perfectly suited to handle the receipt of full pallets in its current form. As a result, JJSC needed to use STEPLogic only for partial pallet receipts, enabling the operation to capture case-level serial numbers. As such, JJSC only needed to add a small new process flow for cases, avoiding significant new investment in their WMS. The timing and expense saved by not altering the entire receiving module, and the minimal disruption this caused to the operation, proved highly beneficial.

JJSC’s innovative use of the adaptive software tool provided similar spot solutions throughout the rest of the operation. With STEPLogic as the integration middleware, full cases that are picked using the existing WMS RF process move along a conveyor through an automated print-and-apply system. At that point, the WCS scans the serial number of the case for positive validation with the WMS.

Similarly, the existing WMS functionality is used when unit-level items are picked. These items are picked to an over-pack container which subsequently moves to a packing operation. At packing, new screens developed using STEPLogic provide the staff with the ability to verify and record the individual bottle serial numbers, and associate those serial numbers with the over-pack container, and thus with the shipment.

In both operations, JJSC designed a scheme that provided full, positive identification and association of serial numbers with orders while avoiding the time-intensive means of doing so in the course of the pick operation.

Moving Forward

JJSC began piloting the solution in their DCs in October 2014. Additional drugs continue to be added to the operation. Since its original introduction, the system has been enhanced and upgraded with new functionality. Additionally, JJSC is working with several of their larger customers to extend the tracking and tracing of serial numbers beyond the JJSC walls. This progress puts JJSC at the forefront of the industry for compliancy, as well as in front of the federal mandate for full unit-level traceability in 2023.

By their estimates, their decision to use the adaptive software brings compliancy to their operation with a total investment of only 30 percent of what it otherwise would have cost them.

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