In response to the COVID-19 pandemic and the nationwide lockdown, DB Schenker had to deploy charters for both imports and exports from April 2020 to support customers who are into manufacturing of vaccine, personal protective equipment and health care equipment apart from continuous manufacturing and mission-critical devices/equipment. Security escort services are also being engaged for the safe movement of cargo to mitigate any challenges due to the lockdown situation. Vishal Sharma, CEO – Cluster India and Indian Sub-Continent, DB Schenker tells Viveka Roychowdhury that the COVID-19 pandemic has made it essential for the pharma logistics sector to increase focus on new-age technologies like Artificial Intelligence (AI) which will be critical to next-generation supply chains due to higher turnaround times for responding to emergencies
How was DB Schenker‘s pharma supply chain impacted by the global COVID-19 lockdown?
With the current lockdown situation due to the COVID-19 outbreak in the country, there have been major issues faced in the supply chain of pharmaceuticals along with other essential goods. While the government is taking all necessary steps to ease the movement of essentials, the supply chain has been impacted due to the cancellation of international flights resulting in capacity reduction for air freight, shortage of drivers, congestion at airports, seaports and availability of adequate labour across the country.
How is the situation today?
DB Schenker in India covers all stages of the supply chain – from supplier to customer delivery, from reverse logistics to aftermarket support, in different verticals like healthcare, automotive, industrial, electronics, retail and consumer and aerospace.
In the current situation, we ensure that the movement of essential commodities especially the health care supply chain remains stable at this critical time despite a hump in demand. The movement of goods by land transport is closely monitored with advisories and restrictions imposed on transportation by the Ministry of Home Affairs (MHA). The company is taking all necessary permissions from authorities for operating the warehouse and to secure the timely movement of goods, workforce, trucks and staff.
What are the initiatives that have been implemented to ensure supply chain services during the restrictions that will continue as the COVID-19 situation is evolving?
On the operational front, we ensure that there is a minimum interruption in transportation and movement of essential commodities.
Considering the current situation, we have come up with various alternatives around passenger flights and freighter cancellations. With passenger capacity reduced to zero and schedule cancellations of many cargo freighters, we had to deploy charters for both imports and exports between India and US, EU and Asian countries from April 2020 to support customers who are into manufacturing of vaccine, personal protective equipment and healthcare equipment apart from continuous manufacturing and mission-critical devices/equipment. Along with charter facilities, security escort services are also being engaged for the safe movement of cargo to mitigate any challenges due to the lockdown situation.
Our warehouses which are supporting essentials and healthcare services are operational following the requisite guidelines for social distancing and sanitising stations, along with other health and safety parameters, thereby ensuring safe operations with minimal disruptions.
For the long term, what are the systems and processes that have been put in place to make the pharma supply chain more resilient to such incidents, given that the loads in the pharma sector are time and temperature-sensitive?
Along with providing temperature-controlled vehicles, we work with partners to track these vehicles through a common track and trace platform. We are also working on long term attached vehicle model where partners feel more comfortable to deal with us in a hybrid model where we hire transactional vehicles which are dedicated to our needs. At the same time partners can get guaranteed revenue which will support their investment needs and cover resource costs. This allows us to add fleets on a need basis and create additional capacity in advance to ensure we can scale up to customer requirements.
We also ensure that the reefer trucks used at the destination for delivery have remote temperature log sheet to monitor temperatures, cool dollies at the tarmac for the transfer of cargo within our charters and long term capacity and charter planning for the customers so that they are assured of high-quality systems and processes in the supply chain.
What kind of logistics solutions does DB Schenker offer for biological drugs?
Companies in the healthcare sector are confronted with a constantly changing environment. With our innovative and integrated solutions, we can react flexibly to all requirements from pharma and biotech companies, as well as medical device manufacturers.
The DB Schenker supply chain solution ensures that time and temperature-sensitive products reach their destination safely and securely. We safeguard the integrity of products with special handling and monitoring, including complete traceability of shipments, closed cold chain solutions for biological drugs and compliance with all legal regulations.
Who are the major clients in this sector? Globally and in India?
We service customers primarily in diagnostics and pharma segments providing them with storage (ambient and temperature controlled) and delivery of the respective products to the hospitals/stockists/distributors etc. This, in turn, helps products reach the end consumers whenever they are in need. Apart from these, we offer value-added services like Order 2 Cash, Labelling, etc.
What are the long term learnings from the COVID-19 pandemic for the pharma logistics sector?
Productivity and efficiency will be an important topic when the economy revives. While the pharma logistics sector has undergone several challenges due to COVID-19 outbreak, it is imperative for the industry to come up with innovations to mitigate the supply chain management risk in such scenarios. We believe that it’s essential to increase focus on new-age technologies like Artificial Intelligence (AI) which will be critical to next-generation supply chains due to higher turnaround times for responding to emergencies.
What are the latest quality management systems and industry standards for pharma logistics?
DB Schenker India is a GDP compliant organisation and working on the certifications along with adhering to various other policies, procedures and standards. We are delivering end to end solutions to our customers through various digital tracking initiatives like electronic tracking of shipments on-road/air till the last mile delivery and remote tracking of temperature in reefer trucks while transporting the pharma shipments. We are also investing in the complete supply chain including the usage of cool dollies for tarmac transfer of cargo and active and passive solutions for safe movement of temperature-sensitive shipments.
Our healthcare facilities are set up in line with quality compliance guidelines with standard operating procedures (SOP) and process control charts in place. The ground operations are strengthened by deploying a quality expert to oversee and guide the team on various quality aspects. The warehouse management system (WMS) enables us to manage the inventory with batch control and following First Expiry First Out (FEFO) norms.
The pharma sector is plagued by counterfeits and disruptions due to the COVID-19 might see an increased incidence of such cases. What are the solutions in the DB Schenker portfolio to protect the integrity of consignments?
Protecting the integrity of consignments is one of the important factors in the supply chain industry and there are various means by which it can be prevented i.e. process controls (SOP) at the pickup location/warehouse inbound, internal and external audit, live tracking, CCTV monitoring, security personal deployment and blockchain (to be explored) etc. Apart from this DB Schenker in India is providing insurance as a product also which in turn gives our customers peace of mind regarding their movement.
How important is the India market in DB Schenker’s global strategy? What is the revenue which comes from India?
India is one of the priority markets for DB Schenker globally and with the growth triggered by the implementation of GST, the company is aggressively focusing on developing local logistics capabilities to capitalise on the growing Indian market. Trends such as advanced automation, IoT, last-mile delivery services by companies, growth of start-ups, and process digitisation were some of the major developments in the industry. A few of these trends were initiated and practised by logistics leaders globally and are planned underway in India.
Our warehousing strategy has also evolved in the post GST scenario and our multi-client logistics centres are strategically planned at key consumption locations to support customer requirements by providing scalability and sustainability options to their supply chains. There is a huge opportunity for us to expand our domestic logistics offerings through contract logistics and land transport. The whole concept of moving goods from one place to another is changing with the improvement of road infrastructure. With more companies starting to realise the importance of a specialist who understands the changing landscape, it allows us an opportunity to lead the space. Therefore, we are constantly following this trend and helping customers to design supply chain solutions that are adaptive and resilient. One such initiative is the reduction of lead time in long-haul movements by efficient track/trace/ongoing run time of the vehicle.
DB Schenker’s customer base in India had a lot of European multinationals, however, since last year, 50 per cent of the organisation’s business has come from the Indian companies who are redesigning their supply chains. With these kinds of regular initiatives, our airfreight and contract logistics revenue has been growing in double-digit CAGR over the last few years.
Globally, what is the revenue share from the healthcare and pharma logistics solutions portfolio?
Healthcare and pharma logistics are one of the important products for our contract logistics business especially in these times and we are planning to expand this aggressively to double-digit growth.