European healthcare: how smarter logistics can reduce drug shortages

Posted by Frank Packman - General Manager, Healthcare on 16-Oct-2018 10:21:00
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Although logistics is only one step in the healthcare supply chain, research shows an average pharmaceutical organisation spends 6% of its revenue on logistics requirements, compared to 5%­ for the retail industry and just 2% for electronics.   Manufacturers must absorb these costs without compromising on the quality of medicines, which can lead to subsequent failures and shortages.  Yet, despite this, regulations such as the Good Distribution Practice (GDP) varies by region and therefore universal standards are not upheld.

Although not all failures will be directly linked to drug shortages, the importance of adhering to strict temperature controls is likely to increase in the coming years with the growth of biologics - which are predicted to reach 50% of the top 100 pharmaceutical product sales by 2022.  The high cost and low volume nature of biologics emphasises the importance of reducing unnecessary product losses through compliance failure, and the control of storage and transportation temperature is a major factor in maintaining the quality and integrity of these intricate products.


With a pharmaceutical product typically passing through at least ten touch points from manufacture to delivery, a failure at any of these points can have detrimental effects for the wellbeing of the end-patient.  To ensure product integrity throughout, it’s essential to ensure your supply chain has implemented procedures that adhere to the highest regulations not just regionally but globally.  Only then can the integrity of the pharmaceuticals be guaranteed.  WHO support this, stating that the EU GDP, which is one of the highest set of standards across the globe, is a guarantee that no weak links in the supply chain exist – critical for protecting patients from unsafe medical products.  

However, ensuring international compliancy within the supply chain is just one step towards smarter logistics.  Minimising compliance failures is essential to prevent unnecessary stock shortages.  Key performance indicators (KPIs) are vital for smart logistic supply chains, and should be constantly monitored, reviewed and improved.  These will highlight any areas of vulnerability and help implement strategies to strengthen and mitigate risks to product integrity.   kpis

KPIs surrounding exceptional quality control, superior security measures and accurate delivery times to mitigate product losses are critical within the healthcare vertical.  At Yusen Logistics, we have demonstrated our strength in this field by achieving levels of 99.9% of our shipments having no temperature deviations, 99.5% of our deliveries on time, and 99.99% having no potential freight claims – all made possible through improved planning and monitoring of our customers’ supply chains.

As the development of pharmaceuticals continues to advance and the distribution becomes more complex, so does the need for more sophisticated logistics. A smart supply chain can help drive success by mitigating product excursions and adhering to complex international compliance regulations – factors that are set to become even more prominent in the near future for the healthcare industry.  


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Topics: Healthcare logistics

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