Pharmaceutical products are of great value because they conserve and improve health, and even save lives. Therefore, this industry has one of the most challenging logistics: products must arrive at their destinations safely and as soon as possible.
The evolution of this industry in a globalized world has increased the vulnerability of the supply chain processes and has created risks and uncertainty for suppliers, clients, and regulatory agencies.
The growth of the manufacturing of generic drugs, the rise in research and development costs, and the increase in regulatory requirements are some of the factors forcing pharma companies to look for reduction in costs as the most important trend in this industry, followed by the reliability of supply, traceability, service outsourcing, and the quality measures imposed by the regulatory framework.
Coordination is also a major factor due to the urgency some patients have for medication. If pharma companies lack coordination, patients may opt for less efficient, cheaper, and even counterfeit alternatives, which may worsen their health.
In terms of temperature control, most pharma products require warehousing and transportation under temperatures ranging from -150 to 25 Celsius degrees to preserve their effectiveness. Likewise, warehousing and transportation must meet strict procedures for cleanliness, pest control, and humidity.
Meanwhile, controlled drugs and product recalls require special handling: they must be kept in isolated and restricted spaces and follow rigorous logistics policies. These are some of the reasons why companies are increasingly hiring the services of logistics companies.
The pharmaceutical industry in the world
The volume of the financial markets in the world has doubled in the last 10 years, and this industry has become more specialized as a result of the great number of mergers and acquisitions witnessed by the sector. As time goes by, patents expire, meaning that a great portion of the industry’s sales have gone to the manufacturers of generic drugs, resulting in greater competition and pressure.
As in most other sectors, the pharmaceutical industry is relocating their manufacturing and sales sites. Western Europe and the United States are seen as mature markets in terms of pharmaceutical logistics; however, thanks to the demand of modern medical treatments, China, Southeast Asia, the Middle East, South America, and Eastern Europe are fast becoming strong competitors, even though they face unstable regulatory frameworks and less advanced infrastructure.
As for the Latin American market, there are other challenges besides those of logistics processes: those related to technology and the growth of the sector, such as cost optimization for “commercial” medication vs generic drugs and meeting the high standards for quality in service.
The pharmaceutical industry is relevant for the economy of Latin America: the process ranging from manufacturing to distributing medication implies a complex and precise supply chain. Any changes or interruptions may harm products and patients.
The future of logistics in the pharmaceutical industry
Safety requirements, measures to fight counterfeit medications, the pressure to lower logistics costs, and the increase in supplementary services for patients – such as consultation, house calls, and prescription management – are deemed the most important issues for the industry in the medium term.
Even though the European market handles distribution between national warehouses, both at central and regional levels, the construction of warehouses is on the rise and, just as transportation, it is usually outsourced due to the need to lower costs, avoid risks, and increase visibility; all of which are factors we can master with smart technologies.
3PLs as strategic partners
Outsourcing logistics is part of the overall commercial strategies of companies because it allows them to improve efficiency throughout their whole supply chains, ensures the confidentiality of proprietary knowledge, offers continuous improvement, and meets the regulatory requirements.
The technological innovation owned by specialized logistics companies gathers data on suppliers, inventories, sales records, and forecasts in real time. This improves efficiency, lowers costs, decreases the number of issues in inventories, improves service levels, and makes decision making easier.
Logistics partners play a major role in satisfying the demands of the pharmaceutical industry, known for its strict requirements and high levels of service. Solistica, for example, has operations in Colombia that stand out for their great maturity resulting from the implementation of Data Pack, a proprietary software developed with strict adherence to manufacturing best practices and processes that allows for a flexible automation of the complete manufacturing process, and to an ample service portfolio that includes Freeze, a specialized solution for the strict cold chain required by the pharmaceutical, chemical, and food sectors.
