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About one-third of the revenues generated by drug companies is spent on transportation

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Snowman Logistics, an integrated temperature-controlled logistics services provided has been increasing its pan-India presence with strategically located temperature controlled warehouses, including key markets of Mumbai, Chennai, Bengaluru and Kolkata. Manoj Pant, Regional Business Manager – West, Snowman Logistics, speaks on the technological transformations in pharma logistics and how his company is poised to serve the pharma sector, in an exclusive interaction with Lakshmipriya Nair

What are the significant changes and improvements that technology has ushered into the logistics industry to meet the demands of an evolving pharma industry?
The biopharma segment is heavily dependent on the cold chain industry, with exports expected to grow by 18 – 20 per cent in terms of value, between 2017 and 2022 (Source- CRISIL report). The cold storage capacity while having grown 1.2 times between 2012 to 2017, has faced several challenges in this time too. Although the cold chain in terms of pharma is maturing fast, there remain several challenges on the development of a very strict cold chain protocol. Broad challenges are evident in the supply and distribution chains of pharma products. While most cold chain players operate in multiple segments to ensure better margins and diversification, a few target only the pharma and biopharma segments where margins are higher as quality has to be maintained. The industry is still undergoing constant technological advancements to ensure smooth operations where the quality of pharma products is unhindered.

Some of the technological advancements include:
Drone scan with RFID technology for inventory and barcode scanning: Usually, logistical items are tracked and traced through the reading of essential codes. Commercially, different type of readers are available for reading such codes such as barcode reader, QR Code reader, RFID reader, etc. With the introduction of DroneScan technology, large warehouses can now opt for a robotic solution to take stock (inventory), providing live feedback and integration with Warehouse Management systems. DroneScan uses a drone to scan the barcode on each pallet and records the location of each item in the warehouse management system, proving to be up to 50 times faster than manual capturing. At present, this technology is being used by large e-commerce companies and we may soon find many pharma organisations using this technology in warehouse inventory management.

Cloud technology for data storage: Cloud-integrated logistics not only provides data in real-time but also makes it accessible to the entire team, regardless of location or time. Universal accessibility makes processes that require round- the-clock monitoring far easier to handle. This provides real-time visibility into logistic processes and data, which helps to keep operations under control.

Cloud-based master data for tracking: With the use of master data, cold chain companies can get real-time insights into the availability of materials and products to reduce supply chain risks and optimise costs.

Temperature tracking using IOT cloud: To avoid breakdowns, cold storages can deploy IoT-enabled monitoring solutions like embedded sensors. When installed throughout a cold chain facility, these sensors collect data on environmental conditions and promptly send alerts. They transmit the gathered data to warehouse management systems fostering a coherent tracking network. When IoT-based solutions come into play, there is no need to check environmental conditions of cold storage manually. Apart from real-time asset tracking, the data obtained through the IoT-powered sensors provide a better understanding of risks involved, helps improve operational output and distribution schedules. This inevitably translates into high customer retention, as cold chain logistics become more streamlined and visible.

How is the cold chain pharma logistics landscape in India changing? What are the driving factors?
The latest in the pharma landscape is the aggressive growth of biologics and biosimilars, both of which need temperature-controlled storage. Fortunately for India, we hold the title of having the largest cold storage capacity in the world. Although previously labelled by experts as insufficient and the leading cause for high annual wastage levels, India’s cold storage facilities have now been improved. India’s cold chain management in general, however, needs some organising with lacking infrastructure and disjointed supply chains hindering the market’s growth. Stakeholders need to obtain and increase their accountability to improve the quality and streamlining of operations in pharma.

What are the technology trends that are revolutionising the processes and operations of a cold chain?  Can you elaborate on their potential?
The cold supply chain segment would showcase supply chain technologies. The key solutions represented include 3PL/4PL companies, logistics service providers (LSPs) specialised in the movement of temperature-sensitive goods, tracking & tracing and cold supply chain experts. A third-party logistics provider provides outsourced logistics services to companies. These services can make up part or sometimes all of their supply chain management functions, including:

  • Inventory storage and management
  • Picking and packing
  • Freight forwarding
  • Shipping/distribution
  • Customs Brokerage
  • Contract management
  • IT solutions
  • Cross-docking

A fourth-party logistics provider essentially takes third-party logistics a step further by managing resources, technology, infrastructure, and even manage external 3PLs to design, build and provide supply chain solutions for businesses.

4PL services typically encompass 3PL services as well as:

  • Logistics strategy
  • Analytics including transportation spend, analysis, capacity utilisation, and carrier performance Freight sourcing strategies
  • Network analysis and design
  • Consultancy
  • Business planning
  • Change management
  • Project management
  • Control tower and network management services, coordinating a wide supplier base across many modes and geographies
  • Inventory planning and management
  • Inbound, outbound and reverse logistics management

What is the kind of training and education required for personnel of cold chain logistics to take advantage of the growth potential in the pharma sector?
As per recent CRISIL research reports, the Indian cold chain industry is expected to log a compound annual growth rate of 13-15 per cent in the five fiscal years, through 2022, as compared to 11-13 per cent in the previous five fiscal years. This will swell the industry to Rs 47,200 crores in the fiscal year 2022, from Rs 24,800 crores in the fiscal year 2017. To achieve this result, reskilling and upskilling are the key requirements. The identification of the right skill sets, and the fulfillment of skill gaps are perennial issues that the industry faces and a lack of formal curriculum at institutions add to the woes of growth. Onboard and off-board diagnostics, analysis of dash boards and understanding the technology are all vital for cold chain logistical organisations, so there should be skilled from the bottom of the pyramid right up to the top.

What are the complexities in the current pharma supply chain that can be tackled with the help of Snowman Logistics’ solutions and services?
Pharma cold chain management is an important aspect of the supply chain in the healthcare industry. The cold chain logistics services help the pharma and healthcare industries maintain a continual stock of drugs from suppliers and distributors across varied locations. For pharma shipments with temperature-controlled products that are handled multiple times from supplier to end user, quality assurance requires a combination of temperature control, monitoring tools and coordinated actions throughout the supply chain. They face several challenges to achieve this, of which the biggest challenge within the cold chain is to maintain the 2°C – 8°C range throughout the delivery cycle, which is the most common range for the phrma industry. As the pharma cold chain industry expands its reach, manufacturers, logistics providers and carriers will need to continue to coordinate actions to address the ongoing challenges of cold chain logistics. The current pharma supply chain scenario in India is extremely complex. The presence of more than 55,000 retail pharmacies which are spread across India is one of the main reasons for this complex supply chain environment. Poor infrastructure and transport facility is a big obstacle for cold chain supply. About one-third of the revenues generated by drug companies is spent on transportation.

The problem of poor supply chain management becomes even more severe when temperature-sensitive drugs, such as polio vaccines, are required to be transported to remote areas. Hence, the presence of a proper supply chain management, which includes temperature-controlled vehicles and warehouses, have become important for the pharma industry of India. Vaccines require the support of temperature-controlled environments right from the point of their initial stage of production, up to their final distribution. Every cold storage of ours adopts the latest available technology without any compromise. Our facilities are well designed to take care of any type of products. We can maintain temperatures ranging from +25°C to -25°C, which is the widest range available in India. The facilities are well designed and operated to meet the best quality standards globally, i.e., BRC and ISO 22000. In addition to building the best in infrastructure, implementing the best processes for efficiency, quality and service are must in this business. A cold storage operator must provide services throughout, from domestic players in an unorganised sector to the top global brands. Snowman Logistics has included certain Information Technology (IT) tools to come up with the best service levels. We have also introduced technology by which we can monitor temperature at the chamber level through our mobile phones. A 24×7 Command Centre has been made functional to monitor and troubleshoot our vehicle and cold storages. An app-based touring and auditing system allows our customers to get almost live visibility of the trucks unloaded and loaded at our facility, right to the SKU level information.

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