What are the key elements of risk and mitigation strategies when managing product excursions throughout the supply chain?
We do distribution risk assessments for every shipping lane whenever we are distributing products. Some of the key uncertainties that we have in the supply chain lie with customs clearance and duration, where your product might be stored at customs for extended period of time, which we don’t have control over.
That’s where we see issues arising. In instances where the product has gone beyond the qualified time of the packaging that we use, or if the packaging has been stored in inappropriate conditions. It is imperative to work our best with our clearing agents to have more expedite services from the clearance of the goods.
Inappropriate conditions is another variable to consider, whether it’s at the tarmac level or whether it’s stored inappropriately during transit and so on. In these instances, the mitigation strategy is to work closely with our freight borders, to ensure that they have control over the shipment, and they have visibility over it.
How important is data management?
We don’t have all the data available in a central repository, but the technology is out there. It’s a matter of putting the right level of effort and resources to have all the information available for every name.
Everybody has a piece of the data. For example, when we are shipping products, it will have temperature-monitoring devices; those monitoring devices will be downloaded and archived at the market level. We do not proactively ask for the data to be sent back to us.
In addition, there are central repositories where you can upload and download all the information about the data loggers. This data will be available, archived, and can be utilised to develop the holistic picture of how all your shipments have gone through to that particular lane.
Through this method, you can benefit from statistical analysis of your biggest trends, and find out which markets may have potential issues. The technology is out there; it’s a matter of putting that in place with a third-party company with similarly aligned strategy.
How do customs checks differ from country to country?
In some countries you can have very expedited services - this means there could be a pre-clearance activity before the shipment arrives, so it’s really just a documentation check, in which case the goods come in and out, so they don’t really spend much time at the destination airport.
More often than not, you have VIP pickup services as well. Our transporters will be waiting at the airport, waiting for the goods. As soon as it arrives, the clearance has already been completed.
In emerging markets clearance activity can take much longer. They might want to do an inspection of the goods before they release the product which can cause a delay. You also have to consider the political climate of the market. In many instances the health authorities are involved in releasing the shipment in addition to customs. They might not have sufficient resources to do this, providing an additional cause of delay.
The volume of imports is also a variable to consider. There might be only a few people working at the market level, leading to extended delays. Emerging markets where this occurs include Indonesia, Brazil and Nigeria.
However, in some of the developing markets, it’s actually much easier to get product through. If you consider Africa, it doesn’t take that much time to clear the goods because you have certain measures in place in the market itself to clear the goods.
How do you fight against temperature excursions after they occur?
There are technologies out there where you can place monitoring devices and receive live information. We do this with truck shipments within Europe.
That’s what is in place because we can take a look at the monitoring of the truck through GPS and GPRS monitoring. However, when we are dealing with air shipments, it’s more difficult because whatever monitoring device you put in, it needs to have an interface; either a Bluetooth connection or infrared connection to connect back to the portal and send you the data.
It’s very difficult to get real-time information without lag. When the product is in the cargo hold in the airplane and the destination is transatlantic or from Europe to Asia, you’re not able to see the data while the product is in the plane itself.
If something happens mid-flight, you can’t really do much about it; you can’t give a call to the pilot to say, “you need to change something”, because their main priority is for the safety of the plane and for the passengers and so on.
It’s more of a retrospective situation where you can assess the data, following the shipment. The only place where air shipments can add value is through live monitoring while the product is at the customs level, for instance, if you have asked for a cold room at the destination airport and the pallet for packaging has not been transferred to the cold room and it has been kept in an ambient warehouse.
But for air shipments, you have so many different stakeholders involved, by the time the information actually comes back to you, it may be too late to do anything.
For road shipments, the dynamics are completely different, because you can contact the truck driver quite easily if something goes wrong. If there are any alarms going off, you can call the central office and immediately notify the driver, who can do something about it right away.
With regards to sea freight we have taken a strategy to put in continuous monitoring as well, so we will be notified only when there is an alarm. It is possible to contact the sea freighter or the sea vessel, for instance, but they also have regular checks on the vessel itself.
Depending on the type of vessel, they can have special reefer containers with alarm systems with checks every eight hours, to see if temperature is still within compliance or not. There is also not much you can do if you have a compressor failure. They do have engineers on board to fix immediate issues or if there is a failure on the system itself.
A complete changeover from one reefer to the other, that’s not possible, because they are not able to open the containers and transfer the goods because you might be at eight levels high in the reefer on the vessel itself, so you’re not physically able to transfer the goods.
What are the biggest challenges to overcome?
From a GSK perspective: sea freight is more stable, in terms of having excursions.
With regards to air freight - it depends on what type of packaging you put in place. So, you can have an over engineered solution where you put in active containers, for instance, for all your shipments, which will reduce the occurrence of any excursions.
But if you use passive packaging, there is always the risk of excursions. For passive shipments - we are also moving to more robust solutions using phase-change materials for our packaging; that means occurrence of excursions would be limited. So, we won’t see as many excursions for some of the difficult markets.
When all is said and done, you need to have stability data available. If you are allowing excursions to happen in your supply chain, you need to have the data to support it. Otherwise, it becomes quite an administrative burden to make product impact assessments every time.
We have given some tolerable allowances to our quality department, where they can take some of those quality impact assessments quite quickly and easily.
If you have an excursion for X period of time, you can quickly make a decision, whether there is an impact on the product or not, and that is based on the stability data of the product itself.
That’s the strategy that we have taken, and as long as those conditions are met and respected, then we don’t see any key challenges, except for some markets where it goes beyond the tolerance level; then it becomes an issue because we call those deviations.
In that case, that they are beyond our stability limits and you have to do some further investigation, you have to go back to the manufacturing site to get additional data, and then finally come back with a product impact assessment. And that whole process could take up to 30 days. It depends on your product lead time.
How is temperature excursion handling impacted by the growth of biologics and combination products?
The process remains the same. The growth of business has little to do with how excursions are managed today.
Much of it has to do with what type of stability data you have. It depends on the product characteristics, and also what is accepted by the health authorities. If the regulations change, then we would have to take a more precautious approach to how excursions are managed. As company strategy, we have certain principles that we use when we are managing temperature excursions, but it is dependent on where we are shipping the products to; also, where we are shipping it out from.
If you look at the GDP regulations, there is no specific mentions of product types. Whether it’s a biologic or whether it’s an API or pharma and so on. It’s really about the impact on products for certain attributes like temperature and humidity.
We know, as a general rule, with biologics, they are more sensitive because they lose efficacy quite quickly when exposed to temperatures outside of, say, the required limits. But with other combination products, that may not be the case, and they are probably more stable. But it really depends on the product itself and how sensitive it is to becoming effective.
Saddam will be speaking later this month at the Temperature Controlled Logistics 2019 Conference in London on January 28.