Cold chain distribution issues at Indo-Euro Pharma

Presented by:
Anitesh Das Syed Irfan Shreyansh Jain Sharad Jadhav
19020841168 19020841089 19020841084 19020841213
 Content for IEP Case Study presentation

What is Cold Chain ?

Differences between Cold chain and Regular supply chain

Pharmaceutical Supply Chain

Cold chain at IEP

Supply Chain of IEP

Problems faced by IEP

Solutions
 A brief on the case

Cold chain logistics Indo-Euro Pharma

Seeking solutions for the effective handling of TSDs (Temperature Sensitive

Drugs) across various stages and locations across the supply chain

What is cold chain in supply chain?

WHAT? • The transportation of temperature sensitive products along the supply chain
HOW? • Through thermal and refrigerated packaging method and logistical planning methods
WHY? • To protect the integrity of the shipments

Trend in current times

• Modern consumers have shifted to healthier diets preferring fresh fruits and perishable food items with higher
nutritious value
• Cold chain supply techniques developed globally due to decreased tariffs, efficient transportation systems, and
information systems
• Organizations’ dependence on globally operated cold supply chain for the growing demand of temperature-sensitive
products
• Regular monitoring is imperative to maintain the quality-control standards
 What differentiates cold supply chain from regular supply chain?

• Cold Supply is Has More Moving Parts

The normal process of moving freight is simple – plan the route, load the container,
move the product, and deliver to the customer. When products require temperature
controls like reefer or frozen shipments, each phase of shipping involves multiple
additional steps.

• More Documentation Needed with Cold Supply Chain Shipment

The Food Safety Modernization Act as established by the FDA provides shippers and
carriers with controls required for the safe movement of cold-storage food. DOT and FDA
requirements also ensure that carriers maintain temperature control logs to document the
temperature of their cargo containers – in most cases every hour.

• Mistakes with Cold Supply Chain Movement Impacts Public Health

 Cold supply chain shipments can cause harm to the general public if not correctly controlled
because it extensively carries medical and food products.

Source: Redwood Logistics

 Pharmaceutical supply chains
• The pharmaceutical market is one of the most highly regulated markets in the world. There are strict guidelines for drug
synthesis to ensure the quality and safety of drugs by Regulatory bodies (Federal and state levels)

• The pharmaceutical industry imposed significant challenges

not only for drug manufacturers but also for their suppliers and
logistics partners and to deal with this, the pharmaceutical
supply chain required a special framework of procedures that
were very different from those in other industries.

• A contemporary pharmaceutical supply chain consisted of

pharmaceutical manufacturing companies, clearing and
forwarding (C&F) agents, distributors and stockists.

• Pharmaceutical supply chains are particularly prone to risks if

they are not properly managed and In this Case -
 The suppliers for IEP were from geographically diverse
areas
 The temperature-sensitive medicines required speedy
customs clearance and strict temperature-controlled
storage otherwise complete wastage of the shipments
• The global pharmaceutical market witnessed growth of 4.5 per cent in 2011 but the average revenue growth in
established markets was 2.8 per cent, emerging markets recorded growth of 12 per cent

• A pharmaceutical company had

minimal control over the secondary
sales section

• Several pharmaceutical companies

had explored new distribution
methods
 direct-to-pharmacy
15.30
 reduced wholesaler agreements

Data Source: COLD CHAIN DISTRIBUTION ISSUES AT INDO-EURO PHARMA Case Study Exhibit 1
 Cold chains

Srikumar realized that in the case of the

pharmaceutical industry, the so-called “last
mile” distribution of TSDs to pharmacists,
hospitals and end customers was the area with
the majority of problems. Given the vast
number of pharmacists and medical stores in
India, it was extremely difficult to monitor
whether pharmacists were following proper
procedures for TSDs. Most of the medical stores
had domestic-type refrigerators that could
require frequent calibration.
To obtain regulatory approval for the general distribution of a TSD, a pharmaceutical manufacturer
needed to indicate the required temperature range for storing the drug to keep its medicinal potency
and shelf-life intact

As the spectrum of drugs became more complex and specialized, their specification also became more
complicated and drug-specific.

Srikumar was also aware that pharmaceutical companies could generally allow certain small
temperature excursions (changes) for a specified period of time, such as four hours, six hours, or 24
hours, depending on the chemical composition of the drug.

The primary purpose of thermal stability studies was to estimate the shelf-lives for TSDs and the
possible time out of refrigeration. The shelf-life of any drug was known as the phase of time in which
the drug would be effective if stored at recommended conditions.
Data on shelf lives and time out of refrigeration would provide information on whether temperature
excursions could be acceptable while keeping drugs’ medicinal properties intact.

One important point to consider for Mr. Srikumar was the ambiguity regarding “room temperature,”
which was commonly considered as “without refrigeration.” In the globalized world, drug products
travelled from one continent to another and “room temperature” might not necessarily be the same
throughout the shipping process.

A recent addition to supply technology was radio frequency identification devices (RFIDs) as a supply
chain facilitation tool in enabling companies to wirelessly capture data regarding the status of products in
transit.

The latest RFID tags could not only capture temperature data at regular time intervals, but could also
enable the recording and reading of data wirelessly while a product was in transit, without the container
being opened
 Supply chain of IEP

IEP

Distribution
API
Networks
• Indo Euro Pharma bought several hundreds of API from diverse locations across the globe.

• Major issue pertaining to API was that they were temperature sensitive.

• The different temperature ranges of API were as follows:

 - 10 degree C : sub zero temperature
 0 to 8 degree C : stored in a refrigerated place
 2 to 15 degree C : stored in a cool place
 2 to 30 degree C : stored at room temperature
 Transportation of APIs

• Package size of API had to be constant.

• API Transportation had to deal with country wise specific regulations
• Delay in clearance at any particular location might adversely affect the consignments
• Data Loggers were used to monitor the temperature variations during storage and transportation.
• On receiving the consignment the formulation centers would run the data loggers to test the temperature
excursions.
• APIs would get rejected if they go beyond the acceptable temperature limit.
• In order to reduce time, IEP sent a memo of chemical results of APIs and thus ensured that they were safe to use.
 Transition in transportation

• Transportation is one of the facilitator of Supply Chain

• In Cold Chain the importance of mode of transportation is paramount as prescribed temperature ranges
have to be maintained
• Initially IEP used to ship API in air cargo. But they were not able to maintain the desired ranges of
temperature because of direct exposure to sunlight for longer durations
• Hence, IEP decided to switch to ship and used Mumbai and Chennai sea ports to send the consignments to
Belgium, Sweden, England and New Jersey
• Advantages of Shipping Consignments rather than Airlifting it were as follows :
 Easier to monitor and control temperatures by using reefers for packaging
 Cost Savings up to 75 per cent
 Reduction in carbon emissions
 Reduced handling and risk of transportation damage also reduced considerably
 Problems faced by IEP
• Sea cargo though had lot of advantages but there were several issues associated with it :
 Restricted options in terms of Ship operating lines that also provided the reefer service
 Contacting of multiple shipping lines for the transportation
 Increased transit times and less frequent departures
 Lack of accessibility to remote areas

Problems with distribution centers

• Lot of intermediaries involved

• Transportation to 19 C & F agents was expensive
• Carelessness of Pharmacists
• Lack of proper Equipments at various pharmacies in India
• Carrying costs and Dumping costs of unsold and expired drugs.
• A meeting was held by IEP to address these issues and figure
out possible solutions
 Solutions for IEP

Temperature checks at every transit

• IoT devices to get the real time data, improve visibility and increase the resilience of cold chain.

Air vs Ship Logistics

• IEP should transport majority of its drugs via Ship because of the advantages associated with it.
• Long term contracts with Ship Operating lines to resolve the issues such as availability of ships, frequency of
departures and installation of reefers.
• Some of the drugs can be airlifted if the satisfy the two conditions: 1. They should in high demand due to an
emergency & 2. They should be less temperature sensitive

Distribution System
• IEP can try to reduce the number of intermediateries involved in the Distribution System to ensure the quality
and longevity of the drugs.
Warehouse dumping of expired medicines
• IEP can plan for the demand by collaborating the stakeholders involved using CPFR model and also by using
Predictive Analytics
• As IEP is using IOT device it will get the real time data for the demand of Drug and IEP will maintain the supply
accordingly and in case of any returned drugs, IEP must quickly figure out other location where there is demand
of these drugs in order to avoid holding costs.

Pharmacist
• IEP can train them for proper handling of TSD
• IEP can transport drugs to only those pharmacist who have proper infrastructure and equipments to store the
drug.
• IEP can do quality check quarterly/Half yearly of all the pharmacies it is supplying the drugs to.

Transportation to 19 C&F agents in India

• Manufacturing Hub has to increase from Delhi, Bangalore, Hyderabad to reduce the frequency of offloading and
onloading of the drugs.
Thank you.