Making the business case for implementing serialization cost-effectively in the supply chain

As part of the implementation of serialization, automation of the process will become law within 10 years.  As already highlighted previously, serialization provides accountability and traceability of every item shipped in the supply chain.  The need to conform to these new requirements might at first glance look like it would require costly additional investment. But it need not be – and it might even be more cost-effective, once you take into account the additional benefits that could be obtained.

The ultimate goal is to provide complete traceability of a product to make companies accountable, and help ensure that medicines being delivered to the patient are safe to use. So the key is to collect information about products through the supply chain. For some companies, cold chain monitoring is already in place in some form, providing temperature data; so collection of additional data should be a simple incremental cost. For others, this may be a completely new area to address, and an investment in technology infrastructure might be required.

In both circumstances, the additional information provides much more value that just simply providing serialization data – and this is the key to a demonstrating that a strong return on investment is possible. The additional benefits might include, for example, stronger marketing value (to assure patients that products are safe), improved brand value, and also a more efficient network.

So what about the technology infrastructure requirement? Well, that is easy to address. The availability of ubiquitous mobile connectivity and cloud (internet) based data storage capability has made the task of collecting and storing information much easier than ever before. Many vendors now offer cold chain monitoring and track and trace facilities in what is called ‘software-as-a-service (SaaS), or the entire solution platform-as-a-service (PaaS).

So there’s no need to invest in technology infrastructure – as it’s already there, and all you have to do is subscribe to a service offering what you need, often on a monthly subscription basis based on various parameters – such as the number of points you need to measure.

The data gathered  gives companies insights into a lot more than just serialization information – it can provide complete logistics details through the whole journey of a particular product. Everything is recorded. This means that people running the logistics network can better understand their supply chain and this data might help them to make improvements and run more efficient supply chain networks. It can also help logistics managers use this data to manage shipping schedules and ultimately boost the bottom line.

To use an analogy, consider how web sites like Amazon now provide information to their customers: many now provide a complete track and trace facility for order shipments, so that customers can know at any time where their goods are located on their journey.

Now consider this same system implemented in a pharmaceutical temperature-controlled supply chain, with temperature sensors added to the network or along with the shipment.  It is possible to both pinpoint exactly where the shipment is at any time, and also overlay a temperature graph on top so that you get a complete picture of the shipment’s journey and the temperature history (see illustration).

Supply chain with temperature graph overlay

If this is integrated into existing enterprise systems or workflows, the software technology solution can then provide insights into a complete transport fleet or network of warehouses.  And because the data is available live, alerts or warnings can also be sent by email or text to responsible persons that a digression or some other problem has occurred during the shipment’s journey.

From a serialization point of view, this addresses all necessary requirements:

  • Product identification
  • Product tracing
  • Product verification
  • Detection and response
  • Notification

With details on where every box has been, the temperature, and other key parameters, this provides a complete story of the product shipment – and helps assure patients that products they receive are safe, and in the process helps add value to your brand and marketing. So when thinking about the justification for the cost of implementing serialization, it’s worth remembering the additional non-measurable benefits that can be achieved – and potentially also being able to improve your supply chain efficiency in the process.

Post a comment or leave a trackback: Trackback URL.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: