Risk Management in Cool Chain: A Catch 22

Shipping drugs can be a risky and expensive business - how do companies ensure that their product is transported safely within a functioning cool chain, while still maintaining cost control? In this exclusive interview, Cold Chain IQ talked to Jacques Dysli, Partner at Supply Chain Operations SA, to explore his views on the risky business of transporting drugs.

Joanna Scheffel: Today I´m talking to Mr. Jacques Dysli of Supply Chain Operations SA about the different processes of cool chain in the pharmaceutical industry. Thank you for joining me, Jacques!

Jacques Dysli: Thank you very much.

J.S.: Could you just introduce yourself and tell us a little bit about what you do? J.D.: My career in supply chain covers 12 years. Actually I’ve been trained in supply chain and in marketing & sales, so I have a dual background which is very good to understand the customers’ point of view and to see how the supply chain relates to other functions in the company. I have a good understanding of the processes around the customer. I’ve been heading the biotech supply chain for Serono (Merck-Serono has since been acquired by Merck); in that context dealing with cool chain was absolutely essential to our activities and has always been at the center of our thoughts, especially around risk management. You are always taking a chance when you give up your product to a third party and then you wait until the product arrives at one of your premises in the world.

J.S.: What is your opinion of the major challenges in running a successful cool chain and how will the new GDP guidelines affect this?

J.D.: This is all about risks and the challenge is even broader than the cool chain. Over the last 10 to 12 years, we have seen a lot of progress and the awareness of cool chain among 3PL is much, much higher than in the past but there are still some challenges because you are not just dealing with one person, you are dealing with many intermediaries. That is a big challenge because you have to be sure that everybody on the cool chain is ‘holding their hands together’, and if somebody in the chain is not holding the hand of the person next to him or her then it won’t work. This is the risk.

J.S.: How exactly do you make sure that all these different little pieces and partners come together? How do you connect them all?

J.D.: I think there are several things. First you have to do thorough work in having your own processes done well and clarify exactly what the conditions are in which your products can be shipped. Then you have to do your "due diligence", you really have to understand who you are working with, and you should never underestimate the qualification work you have to do before launching a new route. So it’s really important to work closely with your partners and understand what it means, what can happen and how we are going to react when this happens. I think these are things that everybody knows but that the devil is in the detail. [inlinead] J.S.: In regards to risk management, what would you say pharmaceutical companies would have to do to re-examine their SCM strategy in particular concerning air freight versus sea freight? Are there any advantages or challenges that you see with these transport methods, especially concerning risk management?

J.D.: The more routes you have the less risk you have. So this isn’t an "either-or" choice to be made. I think they are complementary and it depends very much on what your product is, what your constraints in your cool chain are, and last but not least there are also some financial aspects that would normally guide your decision. Basically, sea freight is probably much cheaper, especially if you have large volume. This said, we once tried for one of our biological blockbusters with a significant volume between Europe and the US, and in the end this was not successful. The qualification never gave us the confidence to go ahead with sea freight. But that was seven years ago and I know things have changed. There was a quality problem caused by the lack of awareness by some people in the chain.

Another problem with sea freight of biological is the value of your product and how much your finance people are ready to cope with having this inventory for a longer time.

J.S.: When you say that things have changed and things may be better now, what do you think could have changed in regards to technological advances? How do you think will the cool chain be affected especially with regards to costs?

J.D.: Once again, this is a Catch 22 situation. The more people ship drugs by sea the less costly and the less risky it will be because more awareness along the chain. There is some progress with the technology. There are better containers, especially regarding cooling and heating. It’s now coming to a certain maturity. The most impressive technological advance is not so much about the container it’s about the monitoring. You can have devices where you can trace the temperature and humidity very precisely. These can be connected to a GPS and you can know in real time where your product is, what is its temperature and so on.

J.S.: I can imagine that this is quite costly, isn’t it?

J.D.: Yes, it is. But this always has to be balanced with the price of your products. Especially considering some biological drugs which can be extremely costly. Once the product is shipped by sea, this normally means that this is already a finished product, so the insurance premium for those finished products is extremely high. So yes, these are costly devices but if these devices are giving you enough information in the end to avoid deviation and if they happen to have the right information to be able to release the product, then the cost is certainly worthwhile. You would not do that for all your shipping lane and all your products, there must be differentiation. You really have to look at your portfolio and plan accordingly. There is an important fact almost always forgotten in the development of drug, and this is that you have to do whatever you can to have a finished product as less as possible sensible to temperature in that sense the development stage is the right time to think about this, afterwards it is too late. If it still requires cool chain, you need to be sure that you ensure right from the start that you have the right stability studies in order to be able to release these products in most of the deviation cases. This, coupled with the right devices to give you really precise information, is what will give the qualitypeople confidence that the product is certainly something that will lower the risk of your supply chain.

J.S.: Clinical trials are increasingly conducted on a global basis and need specific clinical materials - how does that affect the transportation of temperature-controlled products on a global scale without costs exploding?

J.D.: I think at the moment, the tolerance towards deviation concerning clinical trials is very low. First you should understand your product. Second, I believe in pulling resources and working with specialized companies giving you a better service. They are not cheap but offer probably less risk than using a "normal" Supply Chain organization.

J.S.: What made you agree to come to 6th Annual Conference Cool Chain D-A-C-H conference and act as a speaker and present your findings, what do you expect from the conference?

J.D.: First, I would like to understand more and I would like to be connected to more colleagues regarding cool chain. Attending conferences is good, while speaking at them is even better. When you are a speaker and have an opinion that you share with people you get a much better exchange of information. I really like the interaction the dialogue that you start when you speak about certain (controversial) topics. My topic will be about lowering the risk within the Supply Chain and I hope this will generate thoughts and discussions.