Unit Operations

Beyond the Mandates: Finding Business Value in Mass Serialization and Supply Chain Visibility

Tunnell Consulting’s Carla Reed provides a six-step approach for establishing drug products’ digital DNA, with an eye towards ROI as well as compliance.

By Carla Reed, Principal, Tunnell Consulting

For two decades, the drug industry has debated how best to create a digital chain of custody for its products. Mandates, initiatives and deadlines have varied unpredictably, a case in point being legislation in the State of California for mass serialization of prescription drugs—whose deadline has been extended several times over the past seven years. (See, for example, “Pedigree Adopters Play the Waiting Game.”)

Today, however, the message is clear: the California State Board of Pharmacy has put a stake in the ground, and there are now firm deadlines for sequenced implementation of serialization of most prescription drugs intended for sale in California. Between 2015 and 2017, manufacturers, wholesalers, and pharmacies must define and implement a meaningful track-and-trace system, including serialization and network components.

Increased threats to the life sciences supply chain—counterfeiting, diversion and organized theft from storage and distribution networks—have increased the industry’s sense of urgency. While FDA has not provided its own mandate, it has actively sponsored e-pedigree education, hosting a Track and Trace Public Workshop this past February that encouraged manufacturers to develop and define:

  • An electronic system for track, trace and authentication (using a unique identification number for each product)
  • Participants—from point of manufacture to dispensing
  • Product level information requirements
  • Data format and architecture—“standardized and non-proprietary”

There are multiple drivers towards mass serialization outside the U.S. as well:

  • Turkey: new pharmaceutical cartons must be serialized with a 14-digit GTIN as well as a 20-digit serial number with lot and expiration codes
  • Italy, Belgium and Greece: require serial numbers at the single pack level 
  • France: requires a CIP 13-digit data matrix code for tracking pharmaceutical shipments from manufacturer to patient
  • Brazil: requires security labels (tamper evident) as well as 2-D data matrix bar codes with a unique serial number (IUM) for all pharmaceuticals sold (effective 2012)

Taking the Necessary Steps
Manufacturers in the life sciences have taken varied approaches to create a safe and secure supply chain. There is one thing that none can dispute: This is not an easy task!

Fortunately, supply chain management has evolved over the past decade. Previously viewed as functional activities performed by vertical groups within procurement, manufacturing and distribution, effective supply chain management is now much more sophisticated and horizontal, and is viewed as a strategic advantage.

In common with other industries, in particular electronics and automotive, the pharmaceutical industry now includes a multitude of players, across an increasingly outsourced network of transformation and distribution partners. It is critical to take a holistic view when defining strategies and approaches for something as important as an information system to share data at the product and transaction level. Although current mandates and programs are initiated at the finished product manufacturing point, it is prudent to take into account future needs for a more granular perspective, to include visibility into product ingredients and components—and potentially final consumption and/or return and destruction (an important point, as FDA has emphasized the value of serialization for product recall).

Irrespective of the level of detail desired, however, manufacturers must follow several fundamental steps in defining their short-, medium- and longer-term strategies: 

1. Identify and engage an executive sponsor, while ensuring that all key stakeholders are included in the review process. Taking into account the participants across the product lifecycle will enable a more holistic view of data sources, as well as users of data that could facilitate process transformation.

Internal participants should include (but are not limited to):

  • Procurement and finance
  • Product development/product management
  • Marketing and sales
  • Customer service and support
  • Manufacturing 
  • Packaging
  • Quality and industry compliance and validation
  • Risk management 
  • Storage and distribution 
  • Information technology personnel and partners
  • Legal entities (internal and external legal counsel need to understand implications of data sharing, confidentiality and intellectual property protection)

External supply chain participants include:

  • Suppliers—direct and indirect suppliers of raw materials, components and packaging materials
  • Outsource manufacturing partners, packaging and repackaging facilities
  • Logistics service providers—carriers, freight forwarders, customs house brokers, trade and finance partners
  • Customers—distributors as well as final consumers

2. Understand the business drivers—what policies and mandates should be taken into account? In the case of specific regulations and mandates, there are timeframes and information requirements that are not negotiable. For compliance with the California requirements, for example, expectations are well defined. Companies that wish to sell product in this market have little time to waste in order to ensure “business as usual.” Compliance with other regulations, such as those outside the U.S., should be driven by business strategies, current and future. The emphasis is on understanding, at the product level, the impact of consolidation, outsourcing and marketing strategies—taking into account local, regional and global requirements for product-level track and trace, as well as the potential benefits of supply process visibility.

FDA has already strongly endorsed the adoption of serialization and the use of technology in order to create “digital DNA” across the chain of custody from manufacturer to consumer. What is of additional interest is FDA’s and other regulators’ growing focus on a more granular view of the source, qualification and authentication of raw materials, API’s and components, inbound to manufacturing and product transformation locations. This is a factor that should be taken into account when developing data capture and sharing strategies and implementation plans.

3. Understand the process—the devil is in the details. Any initiative for process improvement and data sharing requires a well-defined foundation—the “as is” baseline. Time is well spent on identifying each of the participants, activities performed, transactional and event driven data, as well as data sources (manual or automated). Elapsed time between events should be noted (and verified). These activities should take place across both specific origin/destination pairs—or trade lanes—and product-specific process mapping. Many life sciences products have special handling requirements (e.g., temperature, altitude, and vibration control). This is an opportunity to include this level of detail in a “product and trade lane” outline. As in any program, the “as is” baseline should be evaluated to identify non-value added activities, creating a streamlined flow that should be incorporated into the “to be” blueprint to facilitate product and item level track, trace, authentication, and exception-based alerts. Look for areas of common ground and needs among key partners in the supply chain process—for example, transportation providers who are both sources and users of data and information.

4. Know the technological environment—current and required. Barcodes, RFID and other auto-identification technologies have been in existence for decades. Renewed interest in RFID as part of the Walmart and U.S. Department of Defense mandates has spawned many enhancements, including the development of nanotechnologies that capture data on location, condition, and temperature at the item, carton, and transportation mode level. This is good news when developing a strategy for which data carrier(s) should be incorporated.
It is equally important to consider data sources (for both static and dynamic data capture) and data capture tools that are used in a distribution and storage environment—for example, RFID and bar code readers. And then of course there is the requirement for a “shared data repository” as well as agreed global standards (spearheaded by GS1). This is a critical element, especially for a global solution, and provides a reference model for both authentication (through the Standard Numerical Identifier, or SNI, trading partner verification) as well as providing a database to capture and store events and related activities.

In addition to internal applications that are in place across the chain of custody and are primary sources of transaction level data, manufacturers must consider additional software components to facilitate authentication and traceability. There is a growing list of providers whose solutions have evolved significantly in the past few years.

Finally, it is critical to take into account the point within the supply process that the “digital flow of data” should be initiated—and at which stage in the manufacturers’ process the SNI and the data carrier should be attached. There are several options:

  • During the manufacturing process—either at the unit or packaging level
  • Once product is prepared for shipment from the manufacturing distribution center
  • Hybrid model—combination of packaging and distribution

5. Put the pieces together. Having defined the participants, the process, data capture and hand-off points—and technology enablers—the next step is to drill down to the physical and data flow at the conceptual level. Using simulation software—or a simple representation model such as that developed by GS1—master data should be categorized into product, customer, and other partnership relationships. The association between this master data and the transactional data generated through the product lifecycle (for example, packing list, invoice) provides the baseline for product authentication and trading partner verification. Incremental data, captured through aggregation (association between shipment, carton, transportation unit) and inference (link between location of associated unit and item) enables a digital view based on transactions. Additional data points can be captured based on discrete events, independent of transactional data generated by existing applications. This should facilitate an ongoing and “real time” view of what is happening—or, alternatively using event management tools, what has failed to take place!

This detailed operational and process review should identify additional areas of opportunity—for example, how to capture temperature variations, elapsed time between key events (planned versus actual)—and should assist in refining the data and implementation models.

6. Take a teaming approach, and finding partners that can lead and follow. One of the biggest challenges faced when embarking on a large scale, multifaceted initiative is getting beyond the concept and into the reality. Several companies have looked to their transportation service providers to assist them in taking the first steps from the “white board” and into the field. In many cases carriers (in particular, integrated carriers) have relationships with multiple players across the supply chain. In fact, when developing a strategy, one approach is to review the carrier base to identify partners that can provide support to facilitate data capture from manufacturing, through distribution, and all the way to point of dispensing.

An example of one relationship that has worked well is the partnership between UPS (healthcare specialty division) and Genzyme. Following a clearly defined process, the result of many white-boarding sessions, UPS and Genzyme went live with their initiative in 2010, enabling them both to “get ahead of the legislation.” This initial successful implementation provided a baseline to include additional trading partners in the program, creating an environment of collaboration where the joint objective can be achieved—an environment to capture the digital DNA at the product and item level—facilitating the holy grail of supply chain management: a real time environment to ensure a safe and secure supply chain.

About the Author
Carla Reed has more than 20 years’ experience working in global supply chain and logistics environments. An authority on ‘discovery to distribution’ supply chain best practices in the life sciences industry, she has led supply chain integration during the merger of global pharmaceutical companies and  has expertise in discovery, clinical trials, product introduction, and related processes and technology enablers. Prior to joining Tunnell, she was a senior vice president at Marsh Risk Consulting, where she focused on supply chain safety and security, with emphasis on high-risk supply chain environments, including pharmaceuticals, biological products, food, and electronics.  Previously, she led the global logistics practice for distribution and related technologies at Chainlink Research. Prior to that, she founded and led New Creed Consulting and she has held a number of key positions in strategic sourcing and supply chain management at Sterling Commerce, Tomkins Associates, and Encompass. Before relocating to the United States, she also led major supply chain engagements at several of the largest industrial conglomerates in Southern Africa, including SA Breweries, Murray & Roberts and SAPPI.

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