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Pharma Logistics
Logistics Improving In Emerging Markets
By Gail Dutton, contributing editor B
razil, Russia, India, and China (BRIC) are such promising regions for life sciences companies that it's easy to forget their challenges. Developing markets, including BRIC nations, all tend to have inadequate transportation infra- structures, a limited number of knowledge- able distributors, security issues, and unique
bureaucracies and interpretations of regulations.
Whether there for clinical trials,
manufacturing, or market share, life sciences companies entering emerging and developing regions for the first time "tend to overlook the challenges associated with security, regulations, and the unique nature of the supply chain," notes Bill Hook, VP of global strategy for UPS Healthcare Logistics.
The UPS "2011 Pain in the (Supply) Chain Survey" cited limited infrastructure as one of the top four barriers to global expansion. Likewise, the DHL report, "Transforming Life Sciences Logistics in India," recommends strengthening the logistics infrastructure, coordinating ground-handling agencies, streamlining the import/export process at ports, implementing best practices, increasing the use of technology to improve supply chain operations, and developing multiuse warehouses. Those concerns extend to most developing regions. "Often, the infrastructure simply isn't there," Hook reiterates.
The infrastructure is improving, though. For example, Hyderabad, India, opened a dedicated cargo handling zone for pharmaceutical products in 2010, and DHL opened its second Life Sciences and
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Healthcare Competence Center in China in September. FedEx maintains a large Dubai facility as a hub for traffic flowing among nations in the Middle East, Africa, Asia, and Europe.
TRACK-AND-TRACE — THE HOLY GRAIL
Risk management concerns remain high in developing regions. In Brazil and Mexico, for example, DHL takes a comprehensive security approach for its warehouses and during transit. In DHL's Brazilian operations, security includes background checks of all personnel, vehicle safety checks, and GPS tracking. Best practices include transportation escorts and extensive driver training to minimize the risks of hijacking.
"Robust track-and-trace capabilities are the holy grail of global visibility," Hook acknowledges. "As an industry, we're not there yet, but we are making improvements." UPS is evaluating new technology to monitor the condition of products in transit and to note unplanned interventions such as package openings and delays. Such technology is especially beneficial in monitoring temperature- sensitive materials. "The challenge is getting the technology to acceptable costs. The best strategy today is to minimize the number of handoffs in the supply chain," Hook says. He also recommends working
January 2012
with one organization — to the extent possible — to achieve global visibility using the same technology.
THE CHALLENGE OF GOVERNMENT RELATIONS
As an API supplier, LGM Pharma is tapped into Africa, Asia, Eastern Europe, the Philippines, and South America. "The greatest challenge, logistically, is understanding local regulations," according to Robert Hoppes, director of sales. He points to confusion over international c ommercial (INCO) terms (which should be resolved since the release of new definitions), the interpretation of local regulations, and sometimes obscure permitting processes.
"We get calls from clients who aren't familiar with the requirements for importing certain APIs or who need last- minute documents when goods are held up in customs. Usually the issues are minor and can be resolved with updates or clarifications," Hoppes says. At UPS, "We have a public affairs group that meets with government bodies to help them understand our objectives and to help us understand their regulatory stance," Hook says. Access to established, international government affairs teams is one of the advantages in working with large, global logistics providers in developing regions. Working with a