Track and Trace with a Modernized Pharma Warehouse

Track and Trace with a Modernized Pharma Warehouse

Track and Trace with a Modernized Pharma Warehouse

Throughout the COVID-19 pandemic, many industries continue to suffer from severely disrupted supply chains. Few industry sectors were as immediately impacted as pharmaceuticals. Life-saving medications, personal protective equipment (PPE), and medical devices and equipment were all in short supply. With many pharmaceutical manufacturers relying on India (18 percent) and China (13 percent) as their source of raw materials and active pharmaceutical ingredients (APIs) for production, it is unsurprising that reshoring is a topic of industry discussion.

How impactful has the pandemic been on pharmaceuticals? According to Statista, it is estimated that the disruption in launches of new pharmaceutical products due to COVID-19 will have an aggregated negative impact of around 19 billion U.S. dollars until 2025 — with the first significant recovery not expected until 2026.

Is Reshoring the Answer?

The time to plan against future supply chain risks is now. Reshoring (bringing overseas production back to the United States or easily insert country of home origin here as this topic applies to all industrialized nations) could be the answer to remedy the impacts of forthcoming disruptions. By taking a more domestic approach to pharmaceutical supply chain planning, manufacturers can bring medical innovation, production, and logistics stateside. While on paper reshoring seems a solid solution, there are several factors to consider.

In their research report, “Safeguarding the United States Pharmaceutical Supply Chain and Policy Considerations to Mitigate Shortages of Essential Medicines,” Tony Sardella, adjunct lecturer and senior research advisor to Olin’s Center for Analytics and Business Insights at Washington University in St. Louis, and Paolo De Bona, consultant and former staff scientist at Washington University’s School of Medicine, explored causes of chronic pharmaceutical shortages in the United States.

Due to both private and public interests often pulling in separate directions, the pharmaceutical sector is much more complex and unpredictable than other business sectors, according to the authors. The constant tension coupled with a highly regulated environment and extensive supply chain network means responding to disruptions and demand changes is extremely challenging, if not impossible.

The authors recognized the possible need for reshoring pharmaceutical production, especially prescription drugs. “The risks from not having domestic sources for these drugs weren’t as significant before,” Sardella said. But once the pandemic hit, “what was a public health issue became a national security risk as well.”

The fragility of pharmaceutical supply chains, says the authors, and the dependence on foreign nations prompted policy makers to reexamine various aspects of drug production and consider new regulations to address the reliance on China and India that have led to supply shortages throughout the pandemic.

“Multiple solutions have been proposed, such as the nationalization of the drugs industry, the geographic diversification of the supply chain, and the reshoring of pharmaceutical manufacturing. Among these solutions, reshoring gained more traction, not only in most regulators but also in public opinion,” the authors write.

With suppliers across the world and myriad contract manufacturers, wholesalers, third-party logistics providers, distributors, pharmacy, and hospital partners, among others, a pharmaceutical reshoring strategy will take time and considerable resources. Haig Armaghanian, founder and chief executive officer for Haig Barrett, writes that restructuring the supply chain will be a complex process and require different approaches depending on the value chain. 

“Ultimately, it is unrealistic for any country to manufacture all of its own medicines,” writes Armaghanian. “Yet, all countries should be able to make the most essential medicines, have the ability to rapidly scale the manufacturing of vital drugs, and have more ample national stockpiles of drugs, medical devices, and personal protective equipment for times of crisis.”

Track and Trace with a Modernized Supply Chain

As pharmaceutical manufacturers examine whether to reshore part or all of their overseas operations, an immediate issue is ensuring compliance within warehouse fulfillment and pharmaceutical distribution processes — primarily the track and trace of pharmaceutical supply.

Patient safety should always be the top priority for warehouse and distribution center operators. With a modernized value chain built around digitization and partner collaboration, track and trace of prescription and over-the-counter drugs at the pallet, case, and unit level can occur with end-to-end transparency.

The modernization of the pharmaceutical supply chain can also help in compliance efforts with the U.S. Food and Drug Administration’s Drug Supply Chain Security Act (DSCSA). By the end of 2023, the entire pharmaceutical supply chain must be DSCSA compliant, meaning complete unit-level traceability, including aggregation, will be mandatory.

Former FDA Commissioner Scott Gottlieb, M.D., had this to say in a speech about the DSCSA and digitizing the pharmaceutical supply chain. “Full implementation of the DSCSA will create a safe; secure pharmaceutical supply chain that will pay dividends for decades to come, including enhanced patient confidence. But it can also do far more than that. A fully digitized supply chain can also help develop predictive analytics to reduce health care fraud, waste, and abuse,” said Gottlieb.

“It can allow regulated industry and regulators to more easily manage or avoid costly or dangerous supply disruptions. It can help support innovative manufacturing and distribution technologies at a time when the drugs being developed are becoming increasingly tailored to specific patient populations,” he added.

Since the onset of the pandemic, pharmaceutical warehouse operators quickly realized the need for agility and resiliency in their operations and supply chains to ensure life-saving drug supply and adherence to track and trace regulations. According to MarketsandMarkets, the global track and trace solutions market is projected to reach USD 7.3 billion by 2026 from 4.1 billion in 2021.

What does a modernized pharmaceutical supply chain look like? First and foremost, it’s removing manual processes that can cause data errors and bottlenecks. There are several technologies and applications that warehouses and distribution centers can integrate and utilize to support track and trace processes.

In an executive brief from Aspen Technology, Inc., with research insights from life-sciences analyst firm Axendia, titled “Optimizing Outcomes Across the Pharma Value Chain Network: The Path Forward in an Ever-Changing World,” several enabling technologies are highlighted.

Internet of Things (IoT). With IoT, warehouses can integrate, connect, and analyze data from their equipment sensors and warehouse management systems for more strategic decision-making around their fulfillment processes.

Predictive maintenance. Equipment downtime means fulfillment bottlenecks, customer dissatisfaction, and revenue loss. With sensors and artificial intelligence (AI), warehouses can track their equipment performance and plan their maintenance to avoid breakdowns and downtime.

Digital twins. A digital twin is a virtual model of the physical warehouse operating environment. Simulate various scenarios to determine the responsiveness of your physical operations prior to real-world events.

Barcode technology. Barcodes are essential to serialization and track and trace of pharmaceuticals in the supply chain, with the FDA-required 10-digit NDC number used as a single identifier of pharma products. In the pharmaceutical industry, Grand View Research says linear barcodes, 2D barcodes, and radio frequency identification (RFID) are the cornerstone of track and trace solutions. Due to larger data storage capacities, the pharma industry is increasing its use of 2D barcodes over linear barcodes. RFID continues to be the dominate barcode technology in warehouses and distribution centers for visibility and fulfillment requirements.

Artificial intelligence (AI) and machine learning (ML). These Industry 4.0 technologies are becoming mainstream in pharmaceutical warehouses and distribution centers. The smart warehouse can transform fulfillment processes. ML algorithms can improve productivity in the warehouse by suggesting more efficient SKU strategies, according to Supply Chain Junction. AI can also enhance pallet and case movement by integrating RFID with an AI processing unit for greater track and trace capabilities and control over speed and volume of order processing.

These technologies are just a sample of the technology solutions available to warehouse operators to modernize their operations for safer and more secure and efficient pharmaceutical fulfillment. Daniel R. Matlis, president of Axendia, says, “The path forward to ensure sustainability in an ever-changing world calls for pharma manufacturers to fuel their digital transformation journeys with a holistic approach that optimizes outcomes across the pharma value network,” says Matlis.

“In fact, the FDA supports and encourages the use of automation, information technology, and data solutions throughout the product lifecycle,” he adds.

Warehouse Automation for Pharmaceuticals

When it comes to warehouse automation equipment and systems, operators need solutions that adhere to security regulations but with speed of delivery in mind. Pharmaceuticals demand systems that can accommodate packaging sizes and track and trace requirements. Specifically, A-frame, order verification, and piece-picking systems are well-suited to those parameters.

Here is a look at all three, which SSI SCHAEFER offers as part of its automated solutions.

A-frame. With pharmaceutical fulfillment, operators want a fast-moving system capable of processing complex orders that are smaller in size and packaging. Even under peak loads, the A-frame picking system delivers the greatest possible productivity and material flow. As Aspen Technology highlighted in its brief, warehouse should have their eye on modernization, which means eliminating manual processes. The A-frame meets that criterion by removing time-consuming manual picking and reallocating labor for more strategic fulfillment initiatives.

The highly configurable system allows quick adjustment of its product channels for both cylindrical- and rectangular-shaped pharmaceutical products. The picking capacity is up to 40,000 products per hour, with refilling and picking as separate processes. Utilize personnel during low-peak periods for refilling and rely on automation for picking during peak periods.

Need a product scanner to complement the A-frame? The A-frame product scanner operates by transferring single products from the chute machine to the collection conveyor — aligning and scanning the product on all six sides by a highly sensitive camera. Any products with read errors are marked and guided to an inspection station. Up to 10,000 pieces can be scanned per hour, with fully automated documentation of batch numbers, expiration dates, and serial numbers.

Order verification. It is absolutely essential that picked pharmaceutical orders are verified to fulfill track and trace regulatory requirements. An automated order verifier provides the quality control warehouse operators need to always remain compliant.

How does the process work? Picked orders are delivered in containers and deposited on a conveyor belt before being automatically separated and transported to the reader station. A scanner records and documents the individual products using either 1D barcodes, 2D matrix codes, or RFID transponders (depending on the product and barcode), at a throughput speed of 2.5 milliseconds. Products are finally compiled again in containers and moved to processing for shipping. The maximum throughout is 6,000 products per hour, corresponding to 300 containers per hour.

Ultimately, the order verifier provides savings by reducing the number of errors and associated returns, while providing an automated checking process.

Piece picking. E-commerce has changed the game for warehouse fulfillment. The move to omnichannel distribution means next-day or same-day delivery. This translates to a greater focus on single-order product variety and the need for piece picking. Lower-unit volumes can mean higher handling costs.

Warehouse operators can now achieve standardized piece picking applications by combining robotics with varying conveyor systems. Robots pick individual pharmaceutical articles from storage bins and cartons for placement on a conveyor system for order verification. The solutions combine together for a dynamic intralogistics system focused on safety, security, and order verification. The SSI SCHAEFER WAMAS® Vision software module enables reliable and error-free identification of individual pieces picked.

Pharmaceutical fulfillment requires modernization built upon automation and technology solutions to ensure stringent regulatory requirements are met for each and every order. SSI SCHAEFER provides the warehouse solutions to meet pharmaceutical regulations today and tomorrow.