Date: Friday, April 23rd, 2021
The trend: In response to the coronavirus pandemic, many companies in the health care industry sought out technology to increase visibility in their supply chains.
Market forces were already pushing companies toward visibility long before the pandemic started.
After getting a taste of supply chain visibility, health care logistics companies aren’t likely to go back.
What is it? Visibility technologies track the location of products as they move through the supply chain, similar to the way Uber shows passengers their driver’s car approaching.
In the pharmaceutical industry, companies are also required to measure environmental factors like temperature or humidity for sensitive drugs.
Leaders of supply chain visibility companies say this technology can also automate time-consuming tasks and gather data that helps customers improve the efficiency of their supply chains.
Light bulb moment: Last spring, health care providers struggled to get personal protective equipment because of spiking demand and production delays caused by shutdowns.
Matt Elenjickal, CEO of the supply chain analytics company FourKites, said that made visibility invaluable.
- “The demand for visibility is through the roof because people finally realized how messed up supply chains are and how a single disruption can cause massive upstream and downstream impacts,” he told FreightWaves. “People started scrambling for visibility. They wanted to know exactly where products were at any given time.”
Last year, FourKites started tracking shipments of PPE for the medical distributor Cardinal Health. In March, Cardinal expanded its partnership with FourKites to include medical equipment, pharmaceutical products and first-aid supplies.
- Cardinal, which says it serves nearly 90% of U.S. hospitals, is now one of FourKites’ biggest customers, with tens of millions of shipments.
The rollout: The vaccine rollout also increased the need for real-time tracking because vaccines require careful temperature monitoring.
The Icelandic supply chain analytics company Controlant took on the massive task of monitoring the temperature of Pfizer’s COVID-19 vaccine during transportation and storage.
- During a normal year, Controlant might track hundreds of thousands of shipments for a major drugmaker. This year, the company estimates it could track 1 million shipments of Pfizer’s COVID-19 vaccine.
But Chief Marketing Officer Jessie VanderVeen said the company has seen its business outside of the vaccine rollout grow as well.
- “One of the things companies are thinking about going forward is how to build greater resilience,” she told FreightWaves. “How can they respond to unforeseen issues and challenges in the supply chain? I think that’s where there’s a greater interest and a greater awareness of what’s possible.”
Some hospitals are also tracking individual doses once they arrive, according to Sandy Murti, VP of global development at Impinj, a company that helps hospitals track inventory using RFID tags.
- “There’s a very high level of security associated with the vaccine supply,” he told FreightWaves. “[Monitoring] which users have access to the refrigerators where these vaccines are being stored and how many vaccines are removed. … All of that is happening.”
Backstory: The pandemic supercharged demand for supply chain visibility, but Elenjickal said health care logistics providers were already moving in that direction.
- “What really propelled us was a few things. One is Amazon changing the customer expectation. You order something on Amazon, you know exactly what is happening,” he said.
VanderVeen said the health care industry has been fairly slow to adopt supply chain visibility. However, she said many companies have switched to cloud-based tracking technologies over the past several years because capabilities are improving.
What’s next? VanderVeen said the speed and scale of Pfizer’s vaccine rollout has made her company’s technology better. Controlant has developed new capabilities for Pfizer that can be used for other customers.
- “We did probably two years of development in about five months,” she said.
The distribution process for Pfizer’s COVID-19 vaccine has also been atypical for the pharmaceutical industry. Vaccines go directly from the manufacturer to the point of care, rather than a wholesaler or distributor. VanderVeen said that could have have long-term impacts.
- “We may see more … shipments going directly from manufacturers through last mile because it’s possible now. More of an Amazon-style delivery approach,” she said.
Going forward, Elenjickal said it won’t be enough to simply show customers where their products are. They need to have visibility throughout their supply chain, which means working with vendors and customers.
- “It’s a team sport, if you will. And people have to play nice. They have to collaborate by sharing data,” he said.
He says FourKites is bringing companies from various parts of the supply chain on to the same data platform, which makes it easier for them to share data with each other.
Murti said that Impinj is working with pharmaceutical manufacturers to track drugs at the very start of the supply chain. If companies are willing to share that information, he said it could help hospitals manage inventory.
- “The more upstream in the supply chain that this technology can be applied to medications and supplies, the more value that multiple stakeholders can get,” he said. “We’re starting to see that happen in the pharmaceutical manufacturing space.”
Both Elenjickal and VanderVeen said they expect the momentum for supply chain visibility in health care to continue. They say the number of use cases for this data will only expand.
- “I don’t think it’s a trend that post-COVID will go away. I think it’s something that will completely … turn the industry on its head,” VanderVeen said. “I don’t think that there’s any going back after this.”
The inspection: Following an inspection, the Food and Drug Administration has issued a report criticizing the Maryland manufacturing plant that was producing drug substance for Johnson & Johnson’s COVID-19 vaccine, according to Endpoints News.
The plant has not yet received FDA approval, so none of the product manufactured at the facility has made it into finished vaccines.
The inspection follows a mishap in which workers accidentally mixed up ingredients for the Johnson & Johnson and AstraZeneca vaccines, which were made at the same facility.
Earlier this month, FDA asked contract manufacturer Emergent BioSolutions to pause production until the inspection was complete.
The problems: The report identified nine issues.
The company failed to conduct proper investigations into the cross contamination.
The facility was dirty.
The size, design and location of the facility weren’t suitable.
The company didn’t follow procedures to avoid contamination and didn’t document the production process.
Workers didn’t handle product containers in a way that would prevent contamination.
Written procedures to ensure quality weren’t adequate.
Employees weren’t trained properly.
The equipment in the facility wasn’t big enough.
Equipment wasn’t cleaned frequently enough.
Next steps: The plant won’t be manufacturing any new drug substance while Emergent and FDA work to address the issues identified in the inspection.
“We will not allow the release of any product until we feel confident that it meets our expectations for quality,” acting FDA Commissioner Janet Woodcock said, according to a statement.
A statement from Emergent noted that the FDA’s feedback will help “strengthen the supply chain for Johnson & Johnson’s COVID-19 vaccine.”
“While we are never satisfied to see shortcomings in our manufacturing facilities or process, they are correctable and we will take swift action to remedy them,” the statement reads.
The impact: In a statement, Johnson & Johnson noted that it’s still working to secure authorization from FDA to produce drug substance at the facility as quickly as possible.
The company also noted that it is establishing a “global vaccine supply network.” The company says 11 different sites will be involved in manufacturing the vaccine.
“We are working around the clock to develop and broadly activate our manufacturing capabilities to supply our COVID-19 vaccine worldwide,” a company statement reads.
The goal of establishing 10 sites appears to be an expansion. In February, the company told lawmakers it hoped to have seven active manufacturing sites by midyear.
The Emergent plant was one of only three sites where the company was planning to produce drug substance.
On a conference call with investors on Tuesday — before the inspection’s results were published — Johnson & Johnson executives said they were still confident that they could provide 100 million doses to the U.S. but were reluctant to provide a timeline.