Eric Newman VP for Loss Prevention on Effective Risk Management of Cold Chain Issues

Ahead of the 12th Annual Cold Chain GDP & Temperature Management Logistics Summit – Canada, workshop leader Eric Newman, Vice-President for Loss Prevention at ProTecht Risk Solutions, joined Andrea Charles from Cold Chain IQ to discuss effective risk management of cold chain issues.

Cold Chain IQ: Could you briefly outline your role?

E Newman: I work for ProTecht Risk Solutions. They are a wholly-owned division of Falvey Cargo Underwriting, a managing general agent for Lloyds of London that provides marine cargo insurance for companies responsible for shipping life science products and materials throughout the world. What makes us unique is that we specialise in the life-science industry.

As the global life science practice leader for ProTecht Risk Solutions, I am responsible for working directly with clients by serving them in a consultative role to effectively manage their global supply chains. I work with clients directly to review and assess their global supply chains, identify risk and implement appropriate and effective shipping and handling procedures that will both minimize the potential of loss or damage to their products and ensure that they comply with global cGDP protocols and industry best practices.
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Cold Chain IQ: What are some of the key challenges that companies face with regards to preventing loss within their supply chain?

E Newman:Historically, the big challenge has been maintaining temperature during distribution of products requiring refrigerated conditions (2-8C). However, with the recent increase in the number of products requiring CRT and frozen temperature conditions, the industry has been faced with adopting specific protocols to ensure these products are protected throughout distribution. The temperature requirements of the various products that are now being introduced to the market have posed unique challenges which have forced manufacturers to conduct the necessary risk assessment required to identify and understand all of the exposures that exist (not just temperature related) along a given shipping lane. Only after conducting a proper and thorough risk assessment of a shipping lane, can a manufacturer implement appropriate measures to ensure that the quality and integrity of their products are adequately protected throughout distribution.

In addition, the risk of theft during transit continues to be a growing threat to the pharma industry. As a result, there has been a lot of attention recently given to the development of security guidelines and industry best practices that manufacturers can adopt within their own supply chain programs that will safeguard their products during transit against the risk of theft.

Cold Chain IQ: Do you think that risk management is becoming a real issue for the boardroom as they seek to implement the most cost-effective supply chain and ensure return on investment?

E Newman: Cost is always a factor in any business. I think that goes without saying. But in the pharma industry, there is a responsibility and obligation on the part of the manufacturer to ensure that the quality and integrity of the product is protected as it moves through the various stages of distribution and ultimately delivered to the patient. A diligent and thorough risk management program will not only allow companies to identify the various exposures and risks to their products during the distribution process but also will provide them with valuable data with which they can use to ship their products in a cost effective manner.

Cold Chain IQ: What would be your top tip for effective contingency planning for the supply chain of a cold chain or temperature-sensitive product?

E Newman: Contingency plans are very much in focus from a regulatory point of view. That goes hand-in-hand with the overall risk assessment. Understanding and identifying the specifics risks along a given shipping lane is absolutely critical in order for a company to establish appropriate and effective contingency plans that their logistics and transportation service providers are responsible for carrying out. This then requires that the manufacturer work in a close and collaborative manner with their logistics and transportation service providers so that they understand their overall capabilities and can establish specific actions to be taken in the event of any unforeseen or unscheduled circumstance or condition that occurs during transit that could adversely affect the quality or condition of the product

Cold Chain IQ: Balancing all of these risks sounds like a bit of a juggling act. How do you really help your clients create an effective risk-management strategy?

E Newman: Several years ago when you talked about good distribution practices and regulatory compliance, it is my opinion that the industry took a more scientific approach as the primary focus was on maintaining the temperature and environmental conditions of the product. However, as the pharma industry continues to grow globally and more diverse products are developed and introduced to the market, manufacturers are being forced to take a more comprehensive risk-based approach to managing their supply chains.

With my background in transportation, shipping and logistics, I have gained considerable experience working in the field and thus I am able to assist my clients understand what actually occurs in the truck depots, warehouses, airport terminals, seaports and rail yards. This experience allows me to offer my clients unique insight when performing shipping lane risk assessments and evaluations of logistics and transportation service providers in order to develop shipping and handling procedures that can be tailored based on the specific sensitivities of the products being shipped.

Taking a scientific approach to controlling product temperature and maintaining specific environmental conditions throughout the distribution of a product is critically important and absolutely necessary in order to comply with cGDP. However, it is just as important to understand who is actually handling the product and what the product will be exposed to throughout the distribution process in order to ensure there are proper shipping and handling procedure in place. Once these shipping and handling procedures have been identified, it is then necessary to incorporate them into a written SOP that can be utilized to manage the performance of the logistics and transportation service providers on a shipment to shipment basis which is in accordance with cGDP.

Cold Chain IQ: In a global, more complex supply chain, what lessons have you learnt with regards to transportation vetting? How do you go about the process of defining the right transportation partners?

E Newman: That's a great question. The vetting and selection process that a manufacturer goes through to determine who will be handling their products as they move through the distribution chain is critical. It used to be that many manufacturers looked at negotiation of favourable freight rates as the primary concern when selecting a logistics or transportation service provider and then simply turn their product over to them for delivery. The thought process was to let the transportation company do what they know how to do.

That type of thinking has significantly decreased in the pharma industry, primarily due to the broadening of cGDP and the responsibility manufacturers have to qualify their shipping lanes, which includes working with reputable and qualified transportation service providers.

Under GDP, it is the responsibility of the manufacturer or license holder to properly qualify their service providers they contract with to transport and handle their product. This includes ensuring that the service provider has demonstrated the required level of experience to handle the type of products being shipped, their employees and sub-contractors have received proper training, the company possesses the required equipment and systems required to safely handle and transport the product, the equipment and systems have been properly qualified, and they are capable of providing services aligned with cGDP. The concept of qualifying logistics and transportation service providers through the use of a formal vetting and selection process has been one of the most obvious changes I have seen recently within the pharma industry as manufacturers are recognizing their overall responsibility as part of cGDP compliance.

Cold Chain IQ: You are going to be delivering Workshop A: Cold Chain Risk Management – Strategies for Effective Logistical Risk Assessment and Shipping Lane Qualification in Accordance with cGDP Loss Prevention And Distribution Risk Management, for anyone who's interested in finding out more, what are the top takeaways of attending this workshop?

E Newman:Number one would be to really try to outline through many case studies real-life examples of companies that have both succeeded and failed to provide the adequate protection for their products as they are moved through the distribution chain. These case studies will highlight examples of what I have identified as the critical elements for a temperature-controlled distribution program that is developed from a risk-managed approach.

The other takeaway I hope this workshop will provide is looking at alternative methods to conduct a risk assessment and to examine the various exposures that companies should consider as part of an effective shipping lane risk assessment process. This includes providing various available resources that will assist companies conduct comprehensive risk assessmentsand gap analysis for their own supply chain programs.

We will also discuss some of the industry guideline documents that have recently been published and are available to companies that will help them continue to develop and manage their supply chains in accordance with cGDP.

Cold Chain IQ: What are your future predictions in terms of the temperature-controlled logistics supply chain for life sciences? What do you expect to see in the coming years?

E Newman: What I see coming down the line is continued focus on the part of the regulators to hold logistics and transportation service providers more accountable to move drug products through the distribution chain in a safe and regulatory compliant manner. This is not meant to say that the manufacturers will have less responsibility for compliance with cGDP, rather I see things moving towards developing a much-more harmonized approach within the industry between the manufacturer and their contracted service providers to ensure that the quality and integrity of the product is protected and maintained throughout the distribution process through to delivery to the patient. And that’s a good thing.

Cold Chain IQ: Thank you so much for your time today. We look forward to hearing much more from you at the event.

E Newman: I’m looking forward to it.

Cold Chain IQ:If you would like to find out more about the 12th Annual Cold Chain GDP & Temperature Management Logistics Summit go to www.coldchainpharma.com.

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Interview conducted by Andrea Charles