There’s little room for error in most global supply chains, but none for the pharmaceutical cold chain. Real-time visibility and tracking are critical to order accuracy, schedule reliability, inventory management and compliance in a high-value, highly regulated industry. Failure is measured in lost revenue, reputation and potentially patient lives.

Here are five critical challenges caused by a lack of visibility:

Inability to easily identify potential disruptive events. The COVID-19 pandemic highlighted many of the core problems that pharma producers and distributors encounter daily, with vaccines produced at mass scale and requiring refrigeration within precise temperature ranges in transit and in storage. Q1 2021 Centers for Disease Control data suggested a 20% Covid vaccine loss due to cold chain issues, according to SDCExecutive. 

For many pharmaceuticals, temperature deviations, or “excursions” of even a single degree or two beyond acceptable ranges during transit, or exposure to moisture, can render a shipment unusable, potentially triggering millions of dollars in losses. 

A lot can go wrong in transit, from a truck breakdown to a refrigerated container genset malfunction, to human error in handling, to production or congestion delays. Exception events can quickly result in damaged or destroyed product, write-offs and subsequent lost sales. The IQVIA Institute for Human Data Science estimates that the biopharma industry loses $34 billion annually due to supply chain temperature-control failures. 

Common practice among pharma shippers and logistics providers has been to use passive data logging devices that record data for downloading upon retrieval. Active devices that monitor and transmit back data in real time from the field have been available, but until recently active trackers were expensive and limited in their monitoring, with short battery life during frequent reporting. Software modules to collect, process and interpret that raw sensor data were costly and complicated to install and use before cloud computing. 

A 2020 survey of 200 pharma manufacturers and distributors by supply chain analysts ParkourSC showed that more than a quarter of firms had experienced damaged, spoiled or lost inventory. Roughly 90% reported said they didn’t have full visibility into their supply chains and didn’t trust the in-transit data they were receiving. 

The lack of real-time visibility slows response time to spot problems and take corrective measures. Lack of analytical capability after the fact hinders efforts to get at root causes and drive improvements.

Risk of OTIF failures. On-time in-full (OTIF) delivery, a supply chain compliance measure developed by Walmart in 2017 that’s now a pharma industry standard, gauges supplier performance in delivering to a customer exactly what was ordered, in the amount requested, at the correct location, on time. In pharma, OTIF is a top priority and an all-or-nothing proposition: delivering on time but not in full, or in full but not on time, is equivalent to not delivering at all. 

If a truck breaks down or gets delayed, replacement stock must be sent, often at a much higher cost, to meet service-level agreement terms. Similarly, if any portion of a load is damaged and unusable, the entire load may be rejected. Building a replacement load dramatically increases the transportation spend, along with associated labor, fuel and packaging costs. Compounding the problem, manufacturers and retailers often have different definitions of “on time” and “in full,” creating confusion in supplier and carrier selection and in assessing penalties when partners fall short. 

Real-time, end-to-end data insights and visibility from a trusted source, are key to collaborating and managing around in-transit shipments, to meet OTIF commitments.

Optimizing inventory levels, just in time. It would seem intuitive that pharma cold chain distribution would lend itself to a lean, just-in-time (JIT) inventory model, because medicines and biologics are expensive to produce and can’t be stored for extended periods. COVID-19 has demonstrated the risks to that model from supply chain uncertainty. At the same time, the perishable nature of drugs and their loss of efficacy as effective dates undercut resiliency strategies dependent on maintaining safety stocks. 

Finding the right balance to optimize inventory based on the product portfolio and on historic demand and shipment patterns will be a continuing challenge.

Overstocking and the potential ripple effect. A related challenge experienced across industries during Covid is overstocking upstream in response to initial shortages — the so-called “bullwhip effect” — due in part to inadequate sharing of information. When orders sent to manufacturers and suppliers create larger variances or “waves” than sales to end customers, they can negatively impact operations, causing each link of the supply chain to underestimate or overestimate product demand. 

Pharma is among the hardest-hit sectors from the bullwhip effect, due to the high shipment values involved, perishability of the product, and often the urgency in getting vaccines and other medicines where they’re needed quickly. Residual effects from the pandemic haven’t abated. Some of the causes are chronic, like infrastructure congestion or labor shortages; viruses and extreme climate events will likely be recurring. Resiliency will rely on end-to-end supply chain transparency and sharing of reliable, real-time data from a central, trusted source by supply chain partners.

Compliance-related issues. Pharma is among the most regulated of industries, subject to strict regulations and guidelines at all levels of government, including international bodies dealing with trade, public health, product safety and industry standards. Regulations extend beyond conditions like temperature or humidity in transit, to strict packaging, labeling and handling protocols. 

Pharma shippers are required to maintain complete records of procure-to-pay shipment status that are easily accessible for regulatory review. Specifically, the U.S. Food and Drug Administration requires FDA-regulated companies to use digitized systems for electronic recordkeeping, signatures and data storage. Three-point National Institute of Standards and Technology (NIST) calibration is mandated to certify accuracy of location, temperature, humidity and other tracking sensors. Good Automated Manufacturing Process (GAMP 5) guidelines must be followed for validating computer systems that manage regulated content and compliance.

Navigating compliance at each step of the supply chain in this complex environment is a minefield, especially when undertaken by companies internally. 

Tive Delivers Real-Time Visibility to the Pharma Cold Chain

Boston-based Tive is a cloud-based, sensor-driven platform-as-a-service provider, delivering real-time, end-to-end supply chain visibility and shipment tracking on a subscription-lease model. In 2020 the company invented the first safety-approved, non-lithium-ion battery-powered tracker. 

Tive’s Solo trackers provide hyper-accurate location and condition reporting across all transport modes, to identify and help shippers mitigate service disruptions and manage logistics costs. Embedded at the container or SKU level, they generate and transmit real-time data, capturing temperature, humidity, shock, motion and light. GPS, Wi-Fi and cellular triangulation provide location accuracy within 10 meters — or better, with 2G-5G platform connectivity.

Temperature accuracy is within 0.5 degrees Celsius at ranges within 60 to minus 20 degrees. Each tracker meets FDA, 3-point NIST and GAMP 5 standards. 

The cloud-based application, integrated with customer supply chain management or enterprise resource planning (ERP) systems, conducts real-time, accurate visualization and monitoring of sensor data to develop predictive ETAs and improve OTIF rates. Real-time alerts enable proactive planning and rapid response to disruptions. Data and analytics, on user-friendly dashboards, simplify production of shipment analysis scorecards.

“We prevent shipment delays and damage by reporting possible exceptions in real time,” says Tive vice president-global marketing Jim Waters. “It’s about saving the shipment and executing on OTIF.” Failing that, trackers provide a real-time record of events for purposes of a claim or compliance review. 

Tive’s shipment visibility solution helped pharma and life sciences 3PL Optimize Courier identify the source of a client’s recurring cargo losses, and retrieve and redirect a $500,000 shipment misplaced in an aircraft refrigerated cooler at the wrong temperature. A European drug manufacturer shipping temperature-controlled medicines rescued a $1.5 million time-sensitive shipment, in a refrigerated container set to 6 degrees rather than 20 degrees, by reaching the carrier directly to reset the temperature and by ordering replacement products as a precaution. 

In addition to pharmaceuticals, Tive serves clients with high-value, fragile or perishable shipments of art, electronics, coffee, automotive components and industrial equipment.