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Health support – from MHD magazine

The pharmaceutical industry
The pharmaceutical industry is a knowledge-based, technology-intensive industry that comprises bio-medical research, biotechnology firms, originator and generic medicines companies and service-related segments, including wholesaling and distribution.
The volume of the global pharmaceutical market has more than doubled in the past ten years. By the end of 2016, the global sales volume was estimated to have risen to nearly $A1.5 trillion.
In a snapshot from the CSIRO in 2017, the Australian medical technologies and pharmaceutical sector provided 48,000 jobs in total, across 50 pharmaceutical companies, 400 biotechnology companies and 500 medical technology companies.
And the importance of this industry is growing. Australia’s pharmaceutical market is set to rise to over $A25 billion by 2020.
This industry seeks to deliver medication and related health services that meet the best possible health and economic objectives, including timely access to medicines that meet appropriate standards of quality, safety and efficacy.
The simplified logistics and shortened supply chain of the 1930s, where most pharmacists were still mixing powders and vials and making tablets in their own pharmacies for delivery to customers, made it much easier to meet these objectives.
Today, medicines are distributed through a complex supply chain, which can be disrupted anywhere along its path, from manufacturing to dispensing. The pharmaceutical supply chain is a core part of Australia’s healthcare system, making medicines readily available to all Australians, regardless of location.
SSI SCHAEFER develops and implements supply chain solutions that cater for the future growth of pharmaceutical manufacturers, wholesalers and retailers. SSI SCHAEFER order fulfilment systems support everything from traditional wholesale distribution to omni-channel logistics, including fast-paced e-commerce requirements.

Pharmaceutical wholesale
Pharmaceutical wholesalers procure, distribute and sell a wide range of pharmaceutical and medicinal products. These products include prescription medicines, pharmacy-only medicines, over-the-counter (OTC) medicines, other healthcare products and veterinary pharmaceuticals.
Pharmaceutical wholesalers in the Australian market generate $A14.6bn in annual revenue and employ around 13,000 staff.
Although the principles of a pharmaceutical supply chain are similar to other products and industries, there are very specific issues and characteristics that make it different. Within the supply chain there are a number of rigorous regulatory requirements, such as international customs and importation hurdles, complex transport and storage needs, massive SKU proliferation, and significant pressure to maintain continuity of supply.
Pharmaceutical supply chains are not only important for hospitals, practitioners and consumers, but are also important from social and political perspectives. The impacts of disrupted supply can be felt widely and quickly, and have serious ramifications. It is crucial that medicines be delivered at the right time to the right person in standard conditions. Improper distribution of medicinal products not only affects brand reputation, customer satisfaction and company profits, but can also disrupt the healing processes of patients and negatively impact public health.

“Consistent, reliable service levels are clearly paramount, as is the compliance with regulatory requirements.”

Factors that contribute to unanticipated shortages of medicines include manufacturing faults, logistical failures and unexpected or unpredictable disease outbreaks. Additionally, unexpected safety signals may require recalling of batches with a consequential scarcity of remaining supplies at short notice.
With notable unexpected shortages, the vulnerability of the supply of medicines is exposed. Supply may be restricted or delayed anywhere in the supply chain from manufacturing to the dispensary. The high margins on pharma products, coupled with the limited patent lifespans, mean pharmaceutical companies must significantly focus on maintaining supply.

The challenges
Consistency. End-user customers demand the highest standards of quality and with zero-fault tolerance. Consistent, reliable service levels are clearly paramount, as is the compliance with regulatory requirements.
Regulation. The foundations of Australia’s pharmaceutical supply chain have shifted over recent years due to global and local factors. The NMP (National Medicines Policy) commits to providing timely, Australia-wide access to affordable medicines that meet appropriate standards of quality, safety and efficacy, while maintaining a responsible and viable medicines industry.
Internationally, the industry is moving towards the new Goods Distribution Practice (GDP), which is similar to the Good Wholesaling Practice, but extends the requirements around handling, transportation and traceability. Incorporating these will add challenging logistics hurdles that demand significant investment in existing Australian infrastructure.
Pack variety. There is a significant variety of packaging in the pharmaceutical industry – a vast array of box sizes and dimensions, packets and satchels, glass vials and jars including liquid dosage, plastic bottles etc. Also, packaging must be safeguarded throughout the logistics chain to maintain perfect appearance, not only for aesthetics but also for clarity of essential identification.
The rise of generics. Over recent years, the percentage of generics in the market has been steadily increasing and they are estimated to account for about 90 percent of all prescriptions by 2020 9 This continues to significantly contributes to SKU growth with wholesalers.

“Supply chain visibility is considered of major importance and a significant challenge facing the industry.”

An increasing number of prescriptions. Alongside the rise of generics, there has been an overall rise in the number of prescriptions, in the vicinity of 6.8 per cent in 2015. As the demand for medicines continues to grow, more accurate forecasting and inventory management have become increasingly important.
The rise of cold chain logistics. With demand for cold chain logistics growing, it has become increasingly difficult for pharmaceutical companies to manage fluctuations in demand for temperature-dependent medicines, which can result in exceedingly high inventory costs due to the cooling requirements. This can be of high concern in the Australian market, particularly evident during the hottest January on record that we experienced this year.
The European GDP guidelines extend adherence to storage conditions, as indicated on the packaging, to the transportation leg of the journey. The compliance requirement has long been adhered to with cold chain products – generally anything below 8°C. However, it is new for the majority of the products found in most medicine cabinets, often labelled for 25°C. For example, in practice, the GDP guidelines now apply to about 80% of pharma products in the EU.
Supply chain visibility. Many products are highly sensitive and require end-to-end documentation. Visibility is the ability to track and trace prescription medication. It is also essential to monitor and comply with expiration dates. Supply chain visibility is considered of major importance and a significant challenge facing the industry. Management’s ability to achieve a nearly risk-free environment is primarily enabled by visibility technology that introduces intelligence into every step of the healthcare supply chain.
Storage locations. Storage and picking of pharmaceuticals dictates significant variety and different environments. There is also a need for dedicated storage areas for different types of products such as OTC medications and products, narcotics and hazardous chemicals. Some items require cooling, and others must be held in secure storage.

Order fulfilment systems
SSI SCHAEFER draws on a wealth of expertise and technologies to facilitate the continuous and efficient supply of products in the pharmaceutical industry. SSI SCHAEFER’s order fulfilment systems, whether manual, semi, or fully automated, can flexibly be adapted to the increasing requirements and demands of this industry sector, and include:

  • Carton and tote bin conveyor and handling systems for efficient material flow.
  • High productivity ‘goods-to-person’ order picking systems.
  • ‘A-frame’ fully automated product dispensers.
  • Product and order verification scanning machines.
  • Automatic storage and retrieval systems for tote bins and pallets.
  • Warehouse management software for manual or automated warehouses delivering:
    • Serial number tracking through automatic recording of data.
    • Expiry date management through stock monitoring and automatic early expiry date detection.
  • Automatic-guided transport systems.
  • Robots for both picking and pallet loading.
  • RF, voice or light directed manual picking to order cartons or pallets.
  • Plastic tote bins for product storage and order delivery.

“Synchronisation between the collector belt and the order totes ensures a continuous stream of automatically picked products, up to 10,000 items an hour.”

Goods-to-person systems

SSI SCHAEFER goods-to-person high productivity picking systems eliminate walking by automatically retrieving products from an automatic storage system and conveying them to an operator at an ergonomically designed pick station. Order totes or cartons are also automatically conveyed in and out of the pick station, allowing the operator to continually fulfil orders without moving from the station. A combination of displays and light curtains ensures high accuracy and productivity. Operators can pick individual items, shelf packs or small cartons at the station.
A-frames

SSI SCHAEFER A-frames automatically dispense pharmaceutical products onto a collector belt that runs through the centre of the A-frame and automatically delivers the collected items into an order tote or carton. Synchronisation between the collector belt and the order totes ensures a continuous stream of automatically picked products, up to 10,000 items an hour, making the A-frame ideal for dealing with fast moving small items in peak times.
Warehouse management software

SSI SCHAEFER’s warehouse management software, WAMAS, intelligently manages the end-to-end processes in both manual and automated distribution centres. WAMAS ensures tight integration between the various automated subsystems and operational processes, and is rich in the functionality required for pharmaceutical distribution, including:

  • Batch-lot & product ID tracking.
  • Check weighing.
  • Order cubing.
  • Route prioritisation.
  • Order consolidation.

WAMAS manages and controls all intralogistics processes including efficient and flexible order processing, goods movement, and resource optimisation, along with the provision and analysis of logistics performance data so critical to the supply chain visibility required by the pharmaceutical industry.
SSI SCHAEFER is a strong partner to the pharmaceutical industry, having worked with many of industry leaders over the last 20 years. Contact SSI SCHAEFER directly for case study evidence. For more information, call +61 2 8799 3600 or visit www.ssi-schaefer.com.
 
 
 
 

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