Smart and Serialized

Abstract

Architecting Serialization and Cold Chains for Food and Pharma.

Article

Introduction

Attention is mounting by consumers, government, industry, and now media (such as the recent Crime, Inc on CNBC) to address the growing counterfeit challenges in the US.

In spite of the attention placed on this issue for almost a decade, counterfeiting has actually grown.1 Counterfeiting, in general, has low enforcement attention, disinterested consumers, and low punishment for criminals — the ‘perfect’ 21st century crime. But pharmaceuticals and food are different — the economic consequences are high and consumer impact can be devastating. In the last few years, the global economic woes have incentivized counterfeiting of all sorts of products.

This growth in counterfeiting may be because we are still somewhat avoiding the issue. We make it easy to get in the game. Unless the industry dedicates itself to finding and implementing cost-affordable and effective solutions such as serialization, the problem will probably continue to grow.

Containing the damage — both human and financial — are real goals for both governments and the global pharmaceutical firms. The enterprise has a lot to gain — both strategically and quantitatively — by taking this next step in data management and product tracking.

Gaining value from mass serialization strategies takes preparation and joint work by trading partners. It is not just a government issue. In this article, we will begin to outline the players and provide a high-level view of the systems that need to be engaged to secure the lifeline.

In 2012, disruptions and recalls have cost the US food market over one half billion dollars, not including actual consumer costs from medical treatments due to personal injury or illness.

Boarder seizures of IP products (drugs, music and movies, consumer goods, etc.) are about $200B per year. But that just covers a percentage of the total which is estimated to be about $600B. (See Figure 1.)

Figure 1: IPR Seizure Statistics – (Source US Customs – Click here or on image for high resolution)

That alone should be enough economic incentive to invest in solutions. But companies’ investment in preventative loss has been less than in more tangible cost containment approaches such as inventory, headcount, or asset reductions.

Securing the Lifeline

As discussed in the introduction, we have a rising concern about the authenticity and safety of the global pharmaceutical and food supplies — our very lifelines! We are concerned about sourcing from illicit chains. But many issues arise out of purposely designed, yet poorly monitored supply chains that lack visibility.2Figure 2 is a view of the Global Pharma Chain.

Figure 2: Global Pharmaceutical Supply Chain — (Click here or on image to view larger.)

There are many players in these chains.3 Clearly, although we talk about visibility, risk management, quality, and performance optimization of the supply chain, the reality is that the information we collect and share is not enough to manage risk in today’s global chains. The data we collect today is insufficient to solve the problem. And with so many players and so many compliance rules, it is not hard to see why.

Rather than a distributed database with multiple instances and multiple methods, we need methods to synchronize the data across these multiple instances. No doubt distributed methods are important — each enterprise collects and uses their own organization’s data — but ecosystems also need a way to rapidly share their information.

The Process — Your Partners

Companies need to engage with the core set of trading partners who can take responsibility for all aspects of a secure supply chain. No doubt there are players in the chain who cannot afford certain technologies. But methods need to be discovered that either incentivize these organizations or create processes that have reusable monitoring technologies, so they invest once and then keep the device for a lifetime. Often, the manufacturer or distributor can make the investment and loan the devices based on current supplier agreements.

Figure 3: Engaging the Eco-system

In order to prevent illicit, tainted medicines from entering the marketplace and making their way to patients, an end-to-end engagement needs to occur. It is about gathering the key players in your ecosystem of partners and ‘coming to terms.’ What technology methods can we use? How can the process yield results and benefits that make it possible to invest in these technologies? How can we engage collaboratively and share the benefits of change?

Interestingly, not much work has been done with consumers yet on at-home methods to assure better adherence to care and dispensing of their treatments to ensure they play an effective role. Pharmaceutical companies spend so much time and money developing powerful drugs; whereas a small investment on the consumer side could yield important results that might prove economical across the chain.

Interestingly, with the global nature of the Pharma industry (we will address the food industry which has more local and different economic challenges in another article), suppliers who support global organizations may be more ready technically and process-wise than US packagers realize. And with the power and prestige of the Life Sciences industry, discussions with technology firms who have already built some cost-affordable solutions can yield important results.

Conclusion — Creative Engagement

Shoring up the gaps should include:

  • Raw material producer involvement — finding methods to engage and monitor the source of the chain
  • Addressing process and economic issues in low margin or smaller businesses
  • Finding last mile effective solutions
  • Rethinking the customer experience — discovering methods and approaches for the consumer. Often they are most creative. And finding methods that can work for the consumer — the lowest economic rung in the ladder — may uncover methods that can work for smaller suppliers, as well.
  • Engage as a partner — not supplier — with the technology community and apply or enhance solutions for the eco-system.

Broad engagement can yield powerful results. In the past, many standards groups and discussions about compliance have excluded groups such as those discussed above. It’s time to change that, since they are the most affected.

_________________________________

References:

Healthcare Research

Risk Management

RFID, Sensors and Mobile

__________________________________________________________________

1 Here you can access a similar post for the Food Supply Chain. — Return to article text above
2 In our past reports we covered topics such as Mass Serialization and Cold Chain. Those reports can provide information about what has been done in the last decade. The articles in this Healthcare series can get you more up to date on the current technologies. Together they give a good background and start for your serialization/smarter supply chain journey. — Return to article text above
3 You can get some recent statistics from US Customs and Border Protection. But that just covers what they know about. — Return to article text above


To view other articles from this issue of the brief, click here.

Scroll to Top