Cost-Effective Cold Chain Logistics that are Worth Every Penny

Posted by Frank Packman - General Manager, Healthcare on 17-Jan-2017 12:00:00
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The standard of Yusen’s supply chain management is set high with a GDP certification

Effective supply chain management for healthcare can do much more than improve your bottom line.

In recent years, the industry has recognised that cold chain logistics can learn a lot from existing systems championed by fast-moving consumer goods (FMCG) companies to cut lead times and boost profits. Streamlined solutions not only prove cost-effective but also give you a more secure, robust, and faster service for your high value, highly sensitive products – and in turn more affordable access to critical medicines around the world.

In fact, McKinsey’s Five Step Plan reported that

supply chains now account for nearly 25% of pharmaceutical costs with billions spent each year.


If your 3PL partner can uncover efficiencies in your supply chain management, then you stand a greater chance to reduce costs without diminishing the quality of critical medicines and patient care. Streamlined, transparent and experienced cold chain logistics can lessen the number of touch points and corresponding product handling, using smart technologies and an expert workforce to make cuts to lengthy processes and avoid additional costs.

For your 3PL provider to achieve this, they need to have three key qualities to strengthen your cold chain logistics (and tighten your purse strings).


  1. Experts in your industry

When properly trained, your 3PL partner’s workforce will help you avoid unnecessary costs across your supply chain in two main ways: compliance and warehouse processes.

I’ve spoken previously about how a Good Distribution Practices (GDP) certification is a sign of high standards. On the one hand, it demonstrates that your 3PL partner meets international requirements for supply chain management; on the other, it also signifies a workforce who are on top of compliance. As experts in your industry, their cold chain logistics will avoid the unnecessary fines and delays when compliance isn’t met.

Additionally, a frequently trained workforce are best placed to plan and manage peaks, as well as to avoid wasteful warehousing mistakes. For pharmaceuticals, it’s particularly important to ensure quality control processes are understood and properly followed to avoid waste from expiration.

Robust First-Expired-First-Out (FEFO) inventory pull policies should be in place, with an understanding of the temperature controlled environments and smart technologies used to monitor and manage critical pharmaceuticals.  


  1. Insightful planning and reporting

Strategic planning with disciplined cross-functional processes in your supply chain will improve efficiencies. Even better, planning will be tailored to fit your business: your 3PL partner actively learning about your business to design a more agile, lean global supply chain to suit your needs. If they can more accurately forecast supply and demand data using smart systems, their inventory and warehouse management will save you from costly mistakes.

In fact, McKinsey’s report also suggested that these kinds of performance improvements could improve the supply chain with a 20% boost in profitability.

Analysis and reporting will help you determine how your 3PL partner is making a difference to the cost-effectiveness of your supply chain. For example, a track and trace system – like Vision I -  would give you real-time shipment visibility with greater controls to react quickly if issues arise. That way, you’ll limit any potential costs from threats to security or delivery.


  1. Collaborative approach

You need a 3PL partner with strong communication and transparent practices to make sure you’re finding opportunities to cut costs together. A dedicated account manager will work with you to best understand your critical medicines– that way your supply chain can be tailored rather than segmented.

When too rigid, your supply chain can be unnecessarily expensive. To save on time and effort, a 3PL provider may apply set processes to a breadth of products, using air freight when slower transit would be acceptable – and less costly.

A collaborative approach will uncover opportunities to streamline solutions. Shared warehousing, cross-docking, and multi-client transit could be more cost-effective options. These would be possible with a Pharmaceutical Superhighway coordinated with a control tower management system.  

With centralized planning, your 3PL partner could maximise vehicle utilization, minimise empty running, reduce pallet costs, and achieve worthy environmental benefits (with financial rewards).


If you’re looking for cold chain logistics and your priority is cost, make sure your 3PL partner has the expertise and technology in place to uncover efficiencies in your supply chain management.



Topics: Pharmaceutical Industry, Control Tower Management, Real-time Solutions, Warehousing and Distribution, Cold Chain Logistics, GDP Certification, Temperature Controlled Supply Chain, GPS Tracking, Vision I, FEFO, 3PL, Inventory Management, Cost-effective Logistics

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