Your checklist of hidden risks when comparing vendors

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Posted: 11/29/2017

We continue to look at the hidden costs to consider when sourcing a solution to protect temperature sensitive medicines through transit.  

The financial and non-quantifiable costs of some protective cargo cover systems can be eye-wateringly high when their total-cost-of ownership (TCO) is considered.

When you consider the total cost of ownership of a product or asset,  you should consider its economic impact over a complete period of possession rather than just at the point of its initial purchase. Such an analysis can enable alternative products to be objectively compared on the basis of overall value rather that just initial cost.

Invisible costs

Of course, not all ownership costs and impacts can be quantified financially. As we have noted, for some ramifications of owning a product it can be fiendishly difficult to determine a valid monetary value.

For these factors, such as the risk related examples that follow, it may be possible to allocate 'weighting factors' based around a qualitative judgement as to their impact, positive or negative, on the overall value of the product under consideration.

Damage costs

Some materials used for thermal cargo covers are very easily damaged and the consequential costs of the resulting cover failure or impairment should always be considered.

 For example bubble-wrap materials are easily abraded and penetrated and any such damages will seriously degrade or destroy insulation performance. Other materials such as fibrous insulation, are much more damage-tolerant and some minor damage will, effectively, ‘self-heal’.

Handling damage is never completely avoidable. So when it does occur it is important that it is visible and that the protection afforded, in minor cases, is not materially reduced.

Always ask:

1. How easily is the product damaged?

2. What are the consequences of damage?

3. What are the likely consequential costs in the event of shipment damage or degradation?

Product failure costs

The determination of the quality and serviceability of a thermal cover is part of the overall risk analysis that should be applied to any product designed for pharma protection.

A low-cost thermal cover might perform well in controlled thermal chamber tests and may indeed sail through a limited number of qualification runs, but the cost of failure in the event of malfunction under field conditions must be considered.

Cheap covers, site-fabricated covers and blankets made from easily damaged membranes are prone to random failure.

If there is a failure not only is there a danger of product loss, but also lost time, lost business, investigational costs, significant administrative and reporting hassle and potential regulatory default. It only takes a single failure for a low-cost thermal cover to become a very expensive solution.

Supplier failure costs

The stability and security of a supplier should always be taken into account when appraising a thermal cargo cover solution.

The relatively low cost of market entry in this vertical can result in the emergence of suppliers that have little experience in this field, do not have a global reach, are poorly financed and have little inhouse R&D facilities or technical resources.

Such suppliers can be a high-risk option when selecting products that are designed to protect high-value health and life-significant pharmaceuticals

For best value go TCO

Uncovering the total cost of ownership of a cargo-cover system is a necessity when comparing vendors, selecting products and in order to budget accurately and control costs.

The ‘hidden costs’ of using some products will completely overshadow the initial purchase price and there are a number of risk factors that must also be built into the value analysis.

Looking at the cost over the long-haul is what most people do when they buy a car. The same logic applies to cargo covers. By doing a careful TCO assessment up-front you will save lot of time, money and aggravation further down the road.

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Posted: 11/29/2017

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