Introduction
Today, we see challenges not seen in a peacetime environment. COVID-19 slowed down the supply chain and extended overseas supply lead times from days to weeks to months. However, among the many lessons learned was how to make existing products last longer and become more productive.
The best methods described in this article will reveal innovative ideas about quality, cost savings, cost avoidance, productivity, right-sizing shippers to fit the order packs, and/or increased distribution capacity and agility. An added benefit is improved Environmental Sustainability (ES), reducing solid waste, disposal costs, and greenhouse gases (GHGs).
To start, it is important to understand what shipping means:
Shipping is a dynamic sequence of events with varied environments that involve several different parties with many touchpoints. The shipping solution, as it journeys from origin to destination, must deliver, as a minimum, physical protection and temperature controls for the product/payload.
The Operating Levels of Each Method
The methods presented in this article work on one level and may build in size to cover several levels. The term “method” is used in this article to identify the approach and concept for each group of improvements that support shipping.
The first level is the shipping solution. It focuses on the characteristics of the shipper container alone and its inherent capabilities and opportunities. This level involves a single facility that performs:
- Warehousing and storage
- Conditioning of refrigerant and products
- Assembly
- Packing
- Shipping operations
The second level, which includes the first level, is the fleet of shippers at one or two sites. This may be a family of different-sized shippers that carry a similar thermal design. Refurbishment services are provided by the sponsor (product manufacturer), or by an outsourced service provider.
The third level involves the first and second levels at a multi-site or large network level (regional or global). This is a much larger scale of activity for reusable (RU) shippers offering more services, such as warehousing, product and refrigerant temperature conditioning, packing and shipping, recovery, and refurbishment services. Depending on the business model - it is almost an outsourced activity.
The Best Methods are listed below with a brief description, as well as typical quality, cost savings, and ES benefits. Each of these methods has been successfully implemented in the pharmaceutical/ biotech industry.
Six Best Methods for the Next Decade
1. Move from a passive single-use (SU) shipper to a passive reusable (RU) shipper or active RU shipper.
Benefits: Cost savings - RU shippers lower container costs over time and produce a significant reduction in the number of shippers purchased per year as opposed to the SU shipper. Part of the decision analysis for the RU shippers is the cost of recovery. Today, with the wide range of improvements, the RU shippers generate adequate savings and improvements to offset the cost of recovery. For example, using an annual shipping forecast of 12,000 shipments, 12,000 SU shippers would be purchased, conditioned, and disposed of per year. For an RU shipper with a 5-year lifespan, only 4,000 RU shippers would be purchased, used, and disposed of over five years versus 60,000 SU shippers over five years.
Quality: RU shippers are more robust, have longer qualified shipping duration times, and operate with very low-temperature excursion (TE) rates as compared to the same payload size SU shippers.
ES: Utilizing the RU shipper will reduce solid waste by 80-90% per year and lower waste disposal costs. GHG emissions are reduced by 10 to 20% per year.
2. Extend the expiration date of existing components and/ or the existing shipper through studies and supplier testing. (no change to configuration or shipper design).
Many shippers have met qualification testing but may have component expiration dates that require purchasing the replacement at an earlier date. For example, a RU shipper vacuum insulated panel (VIP) may have a seven-year expiration assembled with a phase change material (PCM) that has a three-year expiration. By working with the vendor to perform tests and studies, a new seven-year expiration date for the PCM is approved. This means the use of a single PCM has more than doubled from three to seven years, reducing shipper costs and waste over the seven years. The PCM would no longer be disposed at the third and sixth-year points.
Benefits: Cost savings by reducing per-use costs of shipper or component, and avoiding the planned purchase due to expiration. Lower annual replacement costs.
Quality: Increasing the expiration date will allow the component and/or shipper to remain in the system longer until end-of-life (EOL) is reached.
ES: Significant solid waste reduction, a decrease in GHG emissions, and lower waste disposal costs.
3. Purchase or create a new shipper with upgraded RU shipper technology for design, materials, and/or process model. This method starts with the intent to build a new shipper with new technology features.
Benefits: Cost savings (reduce per use costs of shipper or component), Depending on the type of improvements: possible increase in shipping duration, broader, more robust temperature profile that maintains the product temperature range, a lighter shipper with smaller external dimensions, possible lower freight costs and more product units per pallet.
Quality: RU shippers are more robust, have longer qualified shipping duration times, and operate with very low TE rates as compared to same-size SU shippers.
ES: Significant solid waste reduction, a decrease in GHG emissions, and lower waste disposal costs.
4. Create a service center network and drop-off locations for RU shippers or fleets of shippers.
Benefits: Cost savings through reduced per-use costs of shipper, using drop-off points, and reduced fees and return freight costs. Basic services are refurbishment and EOL (waste management) related. The network and drop-off locations shorten the recovery cycle. This allows more turns that increase the utilization, which reduces the number of shippers required in the inventory. This also reduces overall freight costs.
Quality: The service center concept promotes quality standards and conformance.
ES: Significant solid waste reduction, a decrease in GHG emissions, and lower waste disposal costs.
5. Enhance the service center network by adding third-party warehousing, conditioning, assembly services, packing, shipping, and recovery to the basic service center operations. This includes expansion from regional to global coverage. Envision a large umbrella of service coverage.
Benefits: Cost savings (reduce the per-use cost of shipper, which includes reduced warehouse, conditioning, and assembly service costs), increase overall capacity and agility to respond to peak demands, reduce return freight cost, reduce warehouse and conditioning space and utility costs from previously used sponsor site costs. This will reduce warehousing and operating costs formerly experienced by the sponsor. The results over time should be lower operating costs year over year.
Quality: RU shippers are more robust. RU shipper inspection under manufacturer specifications and uniform QA controls across all service centers will improve performance and conformance.
ES: Moderate solid waste reduction, a decrease in GHG emissions, and lower waste disposal costs.
6. Design new RU shippers to optimize shipper dimensions with historical order pack sizes. Also referred to as product fitment. The outcome would be an entire fleet of shippers that optimizes the shipper dimensions to the order pack (payload/ product) sizes. This would utilize other superior features for quality, performance, and ES by utilizing RU shippers. This may or may not utilize service centers.
Benefits: Cost savings - reduce per-use costs of shipper or component and reduce freight costs. Increase the number of product units per pallet and reduce the average shipper size.
Quality: RU shippers are more robust, have longer qualified shipping duration times, and operate with very low TE rates as compared to same-size SU shippers.
ES: Significant solid waste reduction, a decrease in GHG emissions, and lower waste disposal costs.
How to Get Started on Implementing These Methods?
First, find out what your company's business requirements are for this shipping system.
This initial task is to identify the basic shipper characteristics for your business requirements. As you read this, it will become obvious that it is information unique to your business. The characteristics listed below are what an expert/ SME would ask to lay the foundation of work.
The basic shipper characteristics are:
- Payload Size and Weight (Minimum and maximum fill with your products. Maximum capacity of shipper filled with 1L bottles of water). Is it a parcel or pallet size? Is there an unusual dimension (height, width, length) that has to be packaged? Is this product container a unique shape?
- The Product Temperature Range is required for shipping, storage, and the product label statement. It is important to have a firm product temperature range for shipping before starting any design work.
- Shipping Duration is required to identify the longest anticipated route times and distances, based on history or anticipated extreme shipping time.
- Lane Environment Conditions: This is the environmental temperature profile of the lane and any unusual profiles- air mode, sea mode, ground high or low vibration profile.
- Physical requirements of the product (photosensitivity, humidity, shock, and vibration).
- Special Requirements. For example, monitoring the tilt for liquid nitrogen (LN). Knowledge of maximum exposure time limit, etc.
After the first step is completed there are several other steps. These may be covered in future articles- stay tuned!
Successful distribution takes basic shipping characteristics of the shipping solution and optimizes key factors to produce improved and innovative methods.
Conclusion
There are several methods that can stimulate progress under many business challenges. Six have been introduced that have already delivered results for others. Each company has its specific requirements. Hopefully, these methods will spark ideas for solutions to your unique challenges.
What is helpful in the development of solutions is reviewing history, learning best practices, and building plans for the future. This grounds us to where we are in relation to where we want to go.
Glancing Back at the Last Decade
Sponsors are looking for more value, lower cost, higher performance, and above-standard quality. Many new medical products are being launched at cold and ultra-low temperatures, and distribution wants a choice of shipping solutions.
Temperature excursions and deviations continue to be a problem in the shipping environment.
The use of thermal modeling has become more accurate and a common tool that avoids expensive lab testing and/or delays due to lab chamber schedules.
Decision-making has expanded the meaning of total cost of operations (sometimes called total cost of ownership). This includes: the shipping container, freight, utilities, storage (space) costs, warehousing, indirect labor, reduction of temperature excursions, scrap, returns, and environmental sustainability.
RU shipping system programs are growing in size, type of services, and levels of quality. Only a few players are mature, and many players are learning the difficulties within the GMP/GDP business model. Currently, the passive reusable (RU) shipper industry has no testing standard.
Artificial intelligence (AI) applications are beginning to simplify tasks, greatly expanding the AI user population to less technical users. This will open new areas of opportunity.
Looking Into the Next Decade
The industry is trending towards outsourcing all distribution-related activities (including product packing) into the shipping solution. It is important to note that under GMP/GDP guidelines, the responsibility for product quality and security still resides with the product manufacturer. If a service provider is used, the sponsor should demand greater visibility and transparency of operations, especially in the area of environmental sustainability practices for Scope 1, 2 & 3 activities. Other recommended features should include pay-per-use, built-in quality, and temperature monitoring of shipments with reports and data management support.
Artificial Intelligence (AI) will emerge as a key player in assisting or performing many mainstream tasks formerly performed with human intervention. This will deliver added value to the operation. The addition of new materials developed from deep space research will greatly increase performance capabilities. Note that AI has been in use by some R&D groups and government agencies for almost twenty years. AI can play a key role in data management, data analysis, and directed decision-making.
Overall, the expectations are changing to leverage a more stable and reliable supply chain in a dynamic environment. The emerging challenges will be in learning how to manage and adapt knowledge using these new tools.
Author Details
C. Ray Goff, Jr., PMP, Principal Engineer- Amgen
C. Ray Goff, Jr., PMP has over 35 years of proven achievements in leading and innovating shipping systems and distribution projects for global pharmaceutical firms.
Ray retired as Director, Vaccine Development managing global clinical supply & distribution for Pfizer and Wyeth Vaccines. Additionally, Ray was in technical or management roles for: Abbott Labs, Bayer, Glaxo, Nortel Networks, and US Army/ NATO.
Currently, as a Principal Engineer at Amgen, he enjoys solving challenges to shipping systems, logistics, distribution, and related emerging technologies.
Ray has authored many articles on: Cold Chain, Distribution, Shipping Systems, and Reusable Shipping Programs.
Publication Details
This article appeared in Pharmaceutical Outsourcing: Vol. 25, No. 2Apr/May/Jun 2024Pages: 8-11