SUPPLY CHAIN IN PHARMACEUTICAL INDUSTRY

Ravi Kumar VP - Logistics & Distribution Intas Pharmaceuticals Ltd.

IPM GROWTH
Indian Pharmaceutical market IPM over last 5 yrs.
60000.0 25

50000.0 19.8 43275.9 40000.0 (CR) 32688.0 14.3 30000.0 IPM 28591.0 10.5 20000.0 36114.6

49399.9 20

14.2

10000.0

5

0.0 MAT ~ 05/2007 MAT ~ 05/2008 MAT ~ 05/2009 MAT ~ 05/2010 MAT ~ 05/2011

0

IPM

10

growth

15

%

IPM – HIGHLY FRAGMENTED
IPM data for MAT 05/ 2011
8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 3,403.6 2,544.3 2,334.8 2,038.7 1,845.8 1,840.1 5.2 4.7 4.1 3.7 3.7 3.3 3.3 3.1 6.9 4,000.0 3,500.0 3,000.0 2,500.0 2,000.0 2.7 2.3 2.3 1,500.0 1,000.0 1,546.4 1,330.3 1,153.6 1,133.4 500.0 0.0

1,639.1

1,613.6

Highly fragmented - Market share of top 10 companies – 40 % Intas ranks 12th in the ORG – IMS report MNC’s increasing market share with JV’s / Aquisitions

THERAPEUTIC CATEGORIES
IPM Anti-infectives CARDIAC Gastro Intestinal Respiratory Pain / Analgesics Vitamins / Minerals / Nutrients Anti Diabetic Neuro / CNS Gynaec. Derma Others MAT ~ 05/2007 MAT ~ 05/2008 MAT ~ 05/2009 MAT ~ 05/2010 MAT ~ 05/2011 Growth in 5 yrs. 28591.0 32688.0 36114.6 43275.9 49399.9 58% 5061.1 5861.7 6328.0 7434.4 8366.3 60% 2923.8 3577.4 4063.7 4939.8 5646.8 52% 3181.8 3580.7 3926.0 4695.3 5440.6 58% 2616.3 2918.4 3205.6 3878.5 4274.3 61% 2663.2 2858.0 3131.9 3739.3 4220.9 63% 2419.1 2614.1 2788.6 3351.0 3823.0 63% 1312.7 1676.9 1909.7 2444.6 2995.0 44% 1535.6 1771.0 1982.2 2423.9 2800.6 55% 1573.8 1838.7 2086.0 2509.9 2797.2 56% 1582.4 1762.4 1994.8 2375.9 2723.0 58% 505.8 686.2 812.1 984.2 1114.0 45%

Lifestyle / Environmental change diseases

.

SCM IN PHARMA INDUSTRY Demand Planning Sourcing Production planning Distribution Planning Logistics Execution & CFA Management .

Lic.SOURCING ( PURCHASE ) Aggressive negotiation skills API .Backward integration wins Adds to bottom line Reverse Auctions work well Domestic VS Import decisions Duty benefits against exports ( Ad. / DEPB ) Cost reduction without compromising on quality .

DEMAND PLANNING Forecasting mainly depends on Long term Corporate vision Seasonality and Market Forces Brand Focus & Promotion Competitors activity Higher Inventory is acceptable vis-à-vis Stock out Inventory cost is lower than Gross Margin Fear of brand replacement Demand generation is a long process High Order to Cash cycle (120–180 days ) .

FORECASTING ACTS AS A DRIVER FOR THE PLANNING PROCESS Controllable Internal Events Uncontrollable External Events Forecasting Planning Decision Making .

Buy decisions Low Reaction time to market ( Postponement ) New product planning and aggressive launch Capacity utilization Accuracy in scheduling and availability dates Regulatory changes leading to delays Contract manufacturing to share idle capacity .PRODUCTION PLANNING S &OP / ORM MRP / MPS / RCCP Key deliverables Make .

Financial Importance SKU Contribution as a % of total market Prioritize backlogs S&OP Conduct RCCP and develop feasible solutions Prioritize firm customer orders (tenders etc.) Conduct “what-ifs” and evaluate multiple options Incorporate gaps between requirements and committed plan in the next DRP Monthly Pre-S&OP Process Post S&OP Process .S&OP PROCESS Prioritize key SKUs of strategic markets Key SKUs decided based on: Strategic Importance Planned promotions Planned new product introductions Focus products Finalize unconstrained demand req.

DISTRIBUTION Domestic Distribution Primary Transportation AIR cargo Surface cargo Full truck movement Part loads Express cargo Multi Modal Train Warehousing Inhouse Outsourced 3 PL Secondary transportation – Primarily by Road International Logistics AIR Cargo Ocean Multi Modal .

CURRENT DISTRIBUTION NETWORK Inhouse Manufactur er Regional Warehouse 1 Regional Warehouse 2 C & FA Contract Manufactur er Regional Warehouse 3 Stockist Govt. Institutes Chemist Hospitals / Clinics .

INTERNATIONAL LOGISTICS .

CHALLENGES IN PHARMA SUPPLY CHAIN Development of new formulations New Drug Delivery System ( NDDS ) International Patent Regime Demand Management / Seasonality Counterfeiting / Spurious drugs Cold Chain management .

HOW.COLD CHAIN MANAGEMENT WHY. AND WHEN .

CONTENTS What is Cold chain Why Cold chain Cold Chain breaks Impact of Cold Chain Breaks Probable causes of Cold Chain breaks Factors Effecting Cold Chain transportation Regulatory environment What needs to be done Packaging solutions Indicators and Early warners Cold Chain Policy – Systems Validation Cold Chain implementation plan Recommendations .

Broadly there are three categories of Cold Chain Products. – Increasing No of Products – Increasing importance of cold chain products in Healthcare. ‘Cold Chain’ is an uninterrupted series of storage and distribution activities which maintains prescribed temperature range as per the respective product requirement right from the point of manufacturing to point of consumption.WHAT IS COLD CHAIN • Cold Chain is becoming more & more Important and Essential in the Indian Pharma Market. Definition: • ‘Cold Chain’ is a Storing & Transporting the Pharmaceutical Products at ‘Recommended’ temperatures from the point of Manufacturing to the point of use. – Product Stored Between -10 to -20 ℃ – Product Stored Between 2 to 8 ℃ – Product Stored Between 15 to 25 ℃ • • .

.WHY COLD CHAIN Growing logistics/distribution needs for high quality life sciences products due to Demographic Changes Global warming New Markets – longer transit times New Product Trends – Biologics. Highly Complex Compounds and new Biotech products The expiration dating of licensed products is based on the stability data collected over time on a product stored within a recommended temperature range Vaccines contain live virus / bacteria Increased rate of local reactions after vaccine Further impetus if provided by Regulatory pressures Quality pressures The distribution process. much unlike the manufacturing process does not operate under a highly-controlled environment. Drugs with Larger Molecular Structures.

The manufacturers are taking utmost care to ensure that the cold chain is maintained till the supply is done to distributors/ stockiest through it’s C&FCs / Depots. The key Challenges in effective Cold Chain Movement • Inadequate strong infrastructure suitable to cold chain movement creates challenges to SCM function. – Cold Storage Hubs at Sea Ports & Air Ports – Effective freight movement system. The lack of facility at many stockiest creates concern for cold chain movement in the secondary phase of transportation & storage. Responsibility maintain the safety and efficacy of drugs • Supply chain plays a critical role in same by effective management of the un..interrupted cold chain movement.CONTROLLING COLD CHAIN. • • Present Mode of Movements: • • • Surface (With adequate Coolants placed inside) Air Courier(With adequate Coolants placed inside) Refrigerated Van ...

Frozen foods Fruits and Vegetables Fish and Meat .PRODUCTS WHICH REQUIRE COLDCHAIN Vaccines Biological products Insulin Hormones Blood fractions & reagents Some antibiotics Some diagnostic and laboratory reagents Dairy Products.

impacts the shelf life of product Increase in impurity levels Vaccine efficacy grossly suffers Some vaccines are sensitive to heat others can get damaged by freezing Alternate lower & higher temperatures can cause ampoules to crack and leak Change in color Sediment formation Leading to regulatory blacklist. product withdrawal .TEMPERATURE-ABUSED PRODUCT IS AN ADULTERATED PRODUCT Potency disturbed.

Backup system must be available in case of failure of primary equipment. The required information of cold chain handling (Packaging / Movement) is available with key personnel. PROCEDURES : To ensure that the Products are stored and transported at appropriate storage condition. Use of data loggers for continuous temperature monitoring. • • • • .COLD CHAIN BREAKS Factors Affecting Cold Chain Management? • INFRASTRUCTURE for uninterrupted requisite storage condition: This involves Primary Movement Storage at CWH/ C&FC & Secondary Movement to Stockiest. Frequent validation of the Storage equipments should be carried out. PERSONNEL : Trained Personnel at CWH / C&FC as well as at the secondary phase of Product movement. MONITORING: To ensure the personnel are working effectively with available equipments & infrastructure under the given procedure. EQUIPMENT : Right equipments for storage and transportation of the Products.

WHERE ARE THE GAPS A case study conducted recently indicated 40% of all temperature Sensitive shipments had deviations to SOP’s .

WAREHOUSE MODE OF TRANSPORTATION CARRYING AND FORWARDING AGENTS Controlled Process with proper documentation Working under process for proper control Not under control. work has to be done for better compliance & adherence to standard procedures STOCKIST & CHEMIST PATIENTS .Process Flow from Manufacturing to patient PRODUCTION VEHICLE AIRPORT …..

R4 More Risk Physicians Hospitals Clinics High Risk Low Importer Risk Manufacturers Distributors Most Secured Least Secured .

.

COLD CHAIN BREAKS 42 Steps. 15 players. and 35 Cold chain Breaks .

Improper timing of shipments eg. . storing and review of temperature monitoring data • Inadequacy of Refrigerated van /Packaging solution to maintain cold chain during transportation. Lack of communication between sender and receiver Delay in clearing cargo from airports due to inadequate documentation or heavy traffic at airports.PROBABLE • • • • CAUSES OF COLD CHAIN BREAKS Inadequate planning prior to shipment. • Cold rooms not initially qualified • Calibration is missed on temperature probes • Chart recorder malfunctions • Alarm does not alert operators • No documentation for recording. • Improper management in the event of cold chain break could result in damage to the product. Shipping at weekends. • Inadequate or no generator back-up for cold rooms. • Power failure at storage locations due to equipment failure or natural disaster such as heavy rains.

REGULATORY EVOLUTION .

The stability study should be available for the assessment of minimum temperature excursion Should have minimum weight so as to make it more friendly in handling Labeling instruction should be clear and visible for everyone to understand .SIGNIFICANCE OF PACKAGING IN COLD CHAIN MOVEMENT? • • • • • • Packaging material to have very high properties of insulation The product must be packed in appropriate Packaging Material with sufficient Coolants. The no of coolants must be determined based on proper validation study carried out during the transit time between two destinations.

STRATEGY – BEST SOLUTIONS Active Cooling Solutions Passive Cooling Solutions Is there one common packaging solution to meet all requirements? To what extend do you validate your packaging? Do you monitor it’s performance? Does it meet product label requirement in transport today? Are your service providers prepared to properly manage your packaging solutions? (handling-storage-asset and SOP-management) .

ACTIVE COOLING Unicooler Envirotainer .

PASSIVE COOLING Thermocol boxes – Feasible for not more than 72 hrs.Precautionary . transit Cool Boxes Pallet Boxes Thermal Blankets .

BETTER COLD-BOX DESIGN .

APPROPRIATE LABELING .

WARNING LABELS CUMULATIVE TIMETEMPERATURE INDICATOR Freeze-marker .

.

TEMPTIME CORE TECHNOLOGIES APPLIED TO ADDRESS UNMET MARKET NEEDS Core Products Freeze Cumulative Heat Delayed Heat Threshold Instant Heat Threshold 39 .

INTEGRATED WIRELESS FACILITY AND TRANSPORT MONITORING SOLUTION Cobalt wireless Datalogging solution from Oceasoft France System Configuration Cobalt radio Modules with sensor Cobalt Radio Receiver and Repeater Thermo software ( server/ client based) .

INTEGRATED WIRELESS FACILITY AND TRANSPORT MONITORING SOLUTION Facility Monitoring Solution • Wireless Datalogging System For monitoring Single location Multi location • .

INTEGRATED WIRELESS FACILITY AND TRANSPORT MONITORING SOLUTION Transport Monitoring Solution • GPS/ GPRS based fleet management system combined with wireless Datalogging System .

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HOW WE CAN IMPROVE EFFICIENCY & MINIMISE VARIANCE – IMPLEMENTATION PLAN Shipping Qualification protocol Cold chain logistics quality policy Temperature range stipulation on all documents All stake holders concurrence and adherence Determine product limits Suitable staff training Self and third-party audits .

Recommendations A unified body to have Industry – Govt. Recording checklist through out the transit . ( Cold Chain council ) Special focus has to be given to the subject which should encourage investments To have written dispatch and delivery procedures All stake holders need to contribute from Ethical stand point NOT only from Commercial stand point Efficient monitoring mechanisms Plan time defined delivery – Minimum transit time Proper labeling for Storage and handling conditions Plan for smaller shipments Temp. linkages and set guidelines.

Thank you .

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