70.8% of Cold Chain Professionals to Increase Investment over the Next 10 Years



Pharma IQ
10/25/2011

The pharmaceutical industry's 'cold chain', the controlled route along which temperature-sensitive products are distributed, plays a critical role in ensuring the shelf life and integrity of medicines and biologics. Most supply chains of this kind are optimised somewhere between 2 and 8 degrees C, but the actual tolerances depend on the specific goods being transported.

An efficient, unbroken cold chain really comes into its own when shipments of vaccines need to travel long distances in hot climates which may be served by poorly developed transport infrastructure. The cold chain distribution process is an extension of the good manufacturing practice (GMP) environment that all pharma and biological products must adhere to.

Pharma IQ recently surveyed key members of the pharma, biotech and logistics communities, ahead of the 11th annual Cool Chain Logistics Europe event being held in Switzerland in January.

Strategy and Risk

Respondents to the Pharma IQ survey were first of all asked whether they believe cold chain or temperature control should be a core competency of their forwarder or third-party logistics (3PL) provider.

More than two-thirds said they "strongly" agreed that cold chain should be a key core competency. Just over a quarter of participants said they agreed, but not strongly, with the statement, while just 3.8 per cent disagreed entirely.

The study involved cold chain professionals ranking a number of key factors impacting distribution in terms of how challenging they perceive them to be.

Loading limitations were identified as the biggest challenge, with an average rating of 4.69 out of 7. Next, with an overall score of 4.35, was quality of data tracking, while quality of service level received a mean figure of 3.95.

Poor cold storage infrastructure was highlighted as another major challenge affecting cold chains, with an average rating of 4.14, followed somewhat closely by local regulations positioned fourth in the rankings at 3.72.

The quality of actual transport means available emerged as another notable challenge for some cold chain professionals, with an overall figure of 3.7. And finally, the reliability of local logistics providers scored 3.95 out of 7.

Researchers then asked what steps were being taken to improve current service levels in each respondent's supply chain.

Almost half of the cold chain professionals surveyed said they were currently studying alternative distribution methods while 42.3 per cent claimed to be investing in infrastructure and equipment.

Investment in technology was among the main steps being taken by 19.2 per cent of participants and 15.4 per cent were seeking ways of using fewer vendors and/or service providers.

Interestingly, no one said they were looking to use more vendors and/or service providers and, when asked whether steps to increase partnerships were part of their cold chain strategy, respondents were divided 50/50.

Investment in Solutions

Pharma IQ went on to ask participants in its Cool Chain Europe survey to list the three main solutions in which their organisation is investing.

Tracking or supply chain visibility solutions were found to be an important focus area for 38.5 per cent of cold chain professionals, closely followed by the second-most common response, data monitoring technology or software, which 34.6 per cent named a key priority for investment.

Interestingly, both road and air temperature-controlled transport was identified by 30.8 per cent of participants, suggesting interest in trucks and aviation as a means of distribution is divided between the two modes exactly.
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Meanwhile, thermal blankets and green or sustainable packaging systems were each named key areas of investment by 23.1 per cent. Active packaging systems were pinpointed by just less than a fifth of participants.

Researchers also enquired as to the amount of investment each respondent's company was expecting to make within the next ten years to improve its cold supply chain strategy.

While 19.2 per cent of delegates said their organisation would maintain a steady flow of investment in cold chain solutions, exactly half said they would increase investment by at least a fifth and 30.8 per cent anticipated a more "significant" boost in expenditure.

Partnerships – Decision Making

The Pharma IQ study also examined what cold chain professionals consider the most important criteria when choosing logistics providers.

Reputation, local expertise and the size of the company, as well as their global reach, were all found to be key considerations, each cited by 23.1 per cent of respondents as decision-making factors when selecting a partner.

The remainder noted their existing relationship with the logistics provider and the cost of a prospective partner's services as the main things to think about when forging links.

When it comes to choosing a cool chain technology or packaging provider, the decision-making criteria are slightly different.

Price and service level were each cited as a main consideration by 15.4 per cent of participants, while product range was the main factor for 19.2 per cent and 11.5 per cent said local market experience.


Interestingly, 30.8 per cent of cold chain professionals surveyed said the ability to roll out a global solution with product availability worldwide was the first thing they look for in a technology partner.

Partnerships – Risks and Challenges

Finally, the Pharma IQ survey asked cold chain professionals to reveal what they find to be the biggest challenge or risk when establishing a logistics partnership.

Defining responsibilities was found to be the main concern for 23.1 per cent of companies, while issues arising from suppliers subcontracting to other firms was a worry for 19.2 per cent.

Devising quality agreements was cited as being a major challenge for 7.7 per cent of cold chain professionals when establishing a new partnership, while 3.8 per cent were uncertain about how company cultures would merge.

But the most common risk or challenge experienced by drug companies looking to work with a logistics provider was simply not having enough control or visibility, the response given by 38.5 per cent of those surveyed.

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