Sunday, September 29, 2013

Pharmaceutical Supply Chain with Serialization

With the development of generic drugs, pharmaceutical companies start to have much pressure on their profit margins. They turn to focus on supply chain inefficiency in order to control cost, increase accuracy and improve efficiency in manufacturing and distribution.
Serialization, which is already used in consumer goods, is a new technology that is going to be widely applied to pharmaceutical industry. Item-level serialization is used to track and trace pharmaceutical products in manufacturing and distribution. It has real-time visibility into events in the supply chain.
The benefit of serialization is obvious. First of all, serialization helps protect patients' safety. The technology could monitor and reduce errors in packaging process and labeling process. The reputation of pharmaceutical companies is also protected. Secondly, serialization reduces costs if there is a recall. For example, Golden State Medical Supply went through a recall in 2010. Due to the use of IBM track and trace technology, the company was able to only recall drug with a particular serialized number, which saved a lot of money for the company. Thirdly, serialization can minimize counterfeits because it can make the whole supply chain transparent. The company knows exactly how many drugs are sent to the wholesalers and then retailers. The retailers are able to track all information of a drug and its suppliers. It would be risky and harder to duplicate valid codes for counterfeits. Last but not lease, marketers and sales are able to forecast the demand and supply and do a better job in supply planning, inventory management, and distribution network.  
More and more pharmaceutical companies start to realize the benefits of serialization. However, it's challenging to implant this technology throughout the whole supply chain. Manufacturers, wholesalers, and retailers all need to contribute to the information transaction and management. The investment in serialization could be substantial. But in the long run, serialization could be a helpful and cost-saving technology in supply chain management. Together with some simulation software, managers could simulate changes and compare different options in
supply chain management.

Question:
1. Even though 50% of the pharmaceutical industry has been working on the implementation of serialization, the national-wide serialization is still very slow. What's the reason for that?
2. What impacts will serialization cause to small pharmaceutical companies and co-packers who may not able to or don't want to implement serialization?

Reference:
http://www.kmworld.com/Articles/Editorial/Features/Pharmaceutical-supply-chain-plays-catch-up-75655.aspx
http://www.healthcarepackaging.com/trends-and-issues/traceability-and-authentication/boosting-security-pharmaceutical-supply-chain


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