Logistics & Supply Chain

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Chemical and Pharmaceutical Logistics Providers Define their Role in an Increasingly Complex World

30.04.2018 -

Stocking chemicals and pharmaceuticals and moving them from A to B is a complex task. Handling dangerous goods and sensitive active ingredients is highly regulated with regard to storage and transport. How flow of material is controlled within the plant is the responsibility of the company, but inbound and outbound transport is often taken care of by service providers. These are becoming increasingly system partner with higher-level solutions – the digitization of the logistics chain opens new doors in supply chain management and distribution. To get a closer look on the opinion of specialists in the logistics sector of the chemical and pharmaceutical industry, CHEManager Distribution & Logistics asked corporate executives and industry experts to share their views and strategies with our readers including principals and customers. Among the questions we put up for discussion were:

  • Looking at the coming five years, which are the major trends in your opinion shaping the logistics market in global acting industries like chemistry or Life Sciences?
  • Which impact has the digitalization on the pharmaceutical respectively chemical logistics sector?
  • Is by example standardization of logistics processes a way to reduce the complexity in the chemical respectively the pharmaceutical industry? What else is needed to be done?

Read here what the opinion leaders have told us:

A Chance to Ease Processes

Looking at the coming five years there are several major trends that shape the logistics market in global acting industries like chemistry or life sciences.

First of all, new infrastructure and transport concepts will emerge. Vehicles with electromotor and the required battery charging infrastructure are finding their way into logistics. But due to an overload of road and rail infrastructure as well as urbanization also new delivery concepts will come up such as drones or tube logistics that brings logistics into the earth.

Looking at the market environment it can be stated that logistics has to prepare to fluctuating demand and an increasing cost pressure. But also homogeneous safety standards along the whole supply chain are becoming essential.

When regarding the competitive situation we will observe an unbundling of the logistic industry: Companies and their business models will focus on certain and more granular logistic services, which concentrate on separate value creation stages.

Another big trend is the increasing integration among the various parties involved in the supply chain. If all players use the same platform, the flow of goods can be digitally mapped along the whole supply chain. This is a chance to ease processes, save time and increase reliability. The digitalization of data therefore gives lots of new possibilities such as paperless trade, digital document management and big data analytics useful in forecasts or to create new products and services.

To sum up, logistics will undergo many changes in the future, but especially new technologies are offering big chances to stay competitive.

Carsten Suntrop, CMC²

Highest Level of Transparency

Digitization, sustained pressure on costs, regulatory demands that continue to increase and a shift towards an increasing number of temperature-sensitive pharmaceuticals will be the relevant drivers of change.

The optimization of distribution networks will remain a priority in this regard. The concern here, among others, will be how to define the optimum set-up within the scope of strategic partnerships, the highest possible level of transparency and process-related analyses based on process mining.

By 2020, 27 of the top 50 best-selling global drug products will require 2-8°C. The appropriate packaging and transport systems must be able to prevent interruptions to the cold chain.

The trend towards ever-smaller batches that will end in the individualization of drugs packaging will result in late-stage customization in almost every country across the globe. Products will be manufactured at the latest possible time and protected against forgery with the help of serialization. Many contract manufacturers and logistics service providers who are not now keeping up with the technology will disappear from the market.

The development of individualized drugs and the increasing focus on patients will open up other fields of development.

Digitization will have a strong impact on the restructuring and automation of processes, particularly in sales and order planning but also in tracking and tracing of pharmaceutical products along the whole supply chain. Added value will also be generated for customers by new ways of accessing services and products through digital channels. But it will only be possible to generate this added value if the opportunities that digitization presents are incorporated into a business process management that integrates all the relevant supply chain partners.

Martin Egger, vice president, Pharmaserv Logistics


Think Beyond the Obvious Improvement

Standardization only works beyond company borders, close cooperation is necessary. The supply chains of the chemical industry involve a large number of actors like shipper and producer, different logistics, service providers as well as site and hub manager. Permanent coordination efforts, continuous joint improvements and permanently establishing these improvements through standardization at all management levels are as complex as they are essential. For optimization it is necessary to think beyond the (obvious) improvement of operational processes through standardization.

At the tactical level, standardized, coordinated planning and forecasting procedures help to avoid planning errors as well as over- and under-utilization. At a strategic level, these standardization efforts must be prepared and established. Strategic questions are on one hand “for which products and customer groups standardized, lean logistics processes are needed?”, on the other “how can agile logistics services make up competitive advantages beyond standard logistics?”

Digitalization is closely linked to standardization – again addressing not only the operational level, enabling standardized and paperless information flows, smooth data interfaces and supply chain transparency. On a tactical management level, joint planning efforts can be supported highly effective by internal and external ‘big data’ analysis.

On the strategic level digitalization is not only seen as a means of operational process optimization, tactical improvement of planning and thus in the end as a means of differentiation through cost advantages. It is a means to generate new sources of income by developing new digital business models based on service differentiation. The focus is shifting from merely selling products, to offering tailor-made information based solutions e.g. by selling availability and so generating competitive advantages.

Thomas Krupp, TH Köln