Using Pharma Supply Chain Analytics Solutions to Promote Operational Visibility

By 2025, global spending on pharmaceutical (pharma) products will reach US$1.6 trillion, according to a report from IQVIA. And that doesn’t even include the current US$220 billion spent on chemicals, raw materials, excipients, and other Active Pharmaceutical Ingredients (APIs) that are needed to produce finished medicines. This demand, in tandem with a strict regulatory environment, necessitates the need for Internet of Things (IoT) technologies that provide rich data and analytical insight into logistical operations. 

Roadblocks in the Pharma Supply Chain 

Although pharma stakeholders may be delighted about the increased demand for medicines and other products, this presents an enormous supply chain challenge. Not only are there larger quantities of shipments that the average pharma must track, but there are also numerous parties that have a role to play in the supply chain. This just makes product visibility trickier than it already is. 

Between higher volumes and lower price points, pharmaceutical manufacturers must seek new ways to keep margins high. Reducing the costs associated with the supply chain has become a popular method to recoup diminishing returns. After speaking with a variety of leaders in the pharmaceutical space, ABI Research has learned a lot about the diverse set of supply chain challenges that these organizations face, which can all be solved with tracking technologies and subsequent data analytics insight. Some of those challenges include theft, misplacement, diversions, environmental regulation, and delivery expectations.

Benefits of Pharma Tracking Solutions

By tracking the movement of pharmaceutical products throughout the supply chain, and even monitoring a product’s properties like temperature levels, IoT tracking technologies can help decision-makers choose the right packaging type, optimize shipping routes, control inventory, shift the mode of transport or delivery speed, and change service levels from partners. With End-to-End (E2E) visibility, a company can gain a broader overview of its delivery network and how to cut logistical costs.

In addition to providing improved supply chain visibility through data analytics, tracking pharmaceutical products is also a growing necessity given the intensified serialization regulatory environment in numerous countries. For example, the U.S Drug Supply Chain Security Act (DSCSA)—responsible for regulating the world’s largest pharmaceutical market—is pushing for a wide range of tracing abilities for medicines and other products in the pharma supply chain.

What Hardware Is Being Used in the Pharma Supply Chain?

Below explains the various technologies that can be applied to the pharma supply chain.

• Barcodes and Quick Response (QR) codes: Enables full visibility of a pharmaceutical product at each point of the shipping journey. Either a worker scans a pallet or carton with a handheld scanner, or the process may be automated. This collection of data can provide pharma logistics managers valuable insight into bottlenecks and inefficiencies of their processes.
• Radio Frequency Identification (RFID: Although not mandated by the U.S. FDA like barcodes are, can store more product data than barcodes and QR codes, and do it in bulk. RFID helps companies:

  • Learn more about how they’re utilizing assets

  • Automate inventory data collection

  • Track pallets and crates

As of now, the use of RFID is relatively rare, with only 11% of U.S. hospitals using RFID-based infrastructure.

• Indicator Labels: Useful for temperature-based pharmaceutical products, as they can detect when a product has been outside the acceptable range for a period of time. Based on the temperatures reached and the longevity of being outside the temperature range, the label will turn a corresponding color. This allows the receiver to make an informed decision on whether the shipment should be accepted or denied.
• Loggers: Like indicator labels, monitor temperature-sensitive products—more notably, cold chain supply. In real time, companies gain access to not only temperature levels, but also humidity, air pressure/quality, light exposure, and any physical impacts on products. Logger devices rely on Universal Serial Bus (USB) connections, Near Field Communication (NFC), and QR codes to communicate data retrieval.
• Cloud-Based Trackers: To gain a deeper understanding of a shipment’s journey, companies can use cloud-based trackers. Trackers, unlike other technologies, enable visibility throughout the entire shipment journey, as opposed to a specific stage. As a result, this allows companies to adjust their pharma logistics process before a major problem arises.
• Multi-Use Trackers: Usually controlled by the solution provider rather than the adopter, free up a lot of resources for companies that want analytical visibility at all stages of the supply chain process without having to get too involved. On the other hand, disposable single-use trackers, which require a more hands-on approach, serve as a point of location reference for a single journey. One interesting technology that’s emerging is called smart locks. Smart locks alert users of unauthorized or unexpected attempts to open a door. Using their smartphone or another device, someone can unlock doors, containers, crates, and trucks remotely.
• Bluetooth (BT) Sensors: A common choice for pharmas that need supply chain visibility at an affordable price point. Whether it’s a specific pallet or even an individual item, BT tags feed data to a nearby gateway tracker. For example, if a truck takes a predictable route every week, a tracker can be placed along the route, and a warehouse worker can analyze the information that the BT tag sends to the tracker.

No Signs of Slowing Down

COVID-19, and its subsequent effect on the global supply chain, highlighted the importance of supply chain visibility. IoT tracking technologies, especially as they merge with analytics and Real-Time Tracking Visibility (RTTV) software, offer pharma logistics teams the best solution when it comes to optimizing processes in a way that meets delivery times, adheres to regulations, and ensures quality assurance.

In every region of the world, tracking software and services in pharmaceuticals are going to continue to be in high demand. Between 2019 and 2026, the North American market will increase the number of journeys served from 9.9 million to 51.6 million journeys. In Europe and Asia-Pacific, the number of supply chain journeys that pharma tracking technologies will serve will come out to 34.1 million and 6 million journeys by 2026, respectively.

To learn more about the pharma supply chain—and the IoT analytics business cases in this space—read  ABI Research’s IoT and Supply Chain Visibility in the Pharmaceutical Industry: Ecosystem Assessment report (AN-5352). This report is part of the company’s IoT Markets research service, which includes research, data, and ABI Insights.