Karen Reddington, President of FedEx Express Asia Pacific, talks to Pharma Focus Asia about the profound transformation occurring in the pharma logistics industry in the region. She describes Asia's changing demographics, the regulatory environment, digitalization and new technologies as key disrupters. Reddington also shares how FedEx is responding to these changes to create more connections and greater possibilities for healthcare customers in this region.
Pharma logistics is undergoing profound change throughout Asia as the ageing population drives a growing need for new pharma solutions, together with scientific and technology advances that bring disruptive changes to cold chain logistics. FedEx Express is seeing three clear trends in pharma logistics:
First, connecting this brand new world is the Internet of Medical Things, an innovation-driven market of medical devices and apps estimated to be worth US$158.1 billion by 2022.
The Internet of Things (IoT) has seen a corresponding growth in connected medical devices and sensors, which includes instruments that allow shipments to be monitored.
At FedEx, we offer customers our own pioneering technology, SenseAware, which provides safe and compliant transportation of temperature-sensitive shipments in clinical trials and innovative pharma. Our network of connected sensors has the ability to gather, send and monitor data, enabling a comprehensive array of real-time tracking and tracing data.
As global pharma is shifting portfolios and priorities towards biologics, we are seeing an increasing connection between quality and technology innovation in cold chain transportation.
The expectations are for cold chain logistics players to have the same commitment to speed and quality as companies researching and developing this highly specialised pharma.
To service this strong growth in complex cold chains, it is paramount for companies like ours to ensure adequate capacity and yet at the same time ensure safety and regulatory compliance.
Clinical trials are a strong and growing business for FedEx, one where customers are looking for high-end bespoke transportation services and solutions to ship sensitive Investigational Medicinal Products (IMP) and clinical trial drugs worldwide.
Increasingly, we are transporting sensitive biological samples for clinical studies from Japan, Korea, and China to Singapore or US laboratories.
By providing proper infrastructure and cold chain logistics support, we are able to move clinical samples and laboratory supplies including IMP and clinical trial drugs in an efficient and cost-effective manner.
FedEx has also invested in building regulatory compliance as a part of our business process. Through services such as Priority Alert, we have a contingency process for our transportation network, further enhancing our quality compliance to our healthcare customers.
The sensitivity and value of healthcare products demand top-quality transportation service as the lives of patients, doctors and hospitals depend on it. Pharmaceutical companies are increasingly looking to build partnerships with logistics companies, and not just the engagement of a transportation vendor. They want to have the complete trust and confidence that the time and temperature-sensitive shipments are well taken care of. And even when shipments don’t go as planned, customers want to be assured that their transportation partners are flexible and provide for the security of the shipment with countermeasures in place that can be swiftly implemented.
One of our customers, Japan’s Chugai Pharmaceutical, a member of the Roche Group, exemplifies the importance of elaborate, temperature-controlled environments for transportation. Chugai is undertaking extensive R&D into promising new drugs, and many of the samples they import and export contain sensitive and valuable components. These samples require 24/7 monitoring, and FedEx gives Chugai a sense of confidence and peace of mind that their shipments are not only being closely monitored and protected with specialised solutions, but speedily moving through transportation networks.
Digitisation has significantly transformed pharma supply chain operations from improving processes, boosting productivity to enhancing safety via technologies such as big data, machine learning or automation tools. Digitising the supply chain enables pharma companies to realise:
Great logistics has always been as much about information as it is about shipments and packages themselves. This is even more crucial when it comes to healthcare shipment; it is not just about knowing where the package is, it is also about knowing how it is.
Due to the sensitive nature of many healthcare products that require strict regulated temperatures and conditions, logistics firms like ourselves areupping our game by bringing unprecedented level of visibility and control to the supply chain through innovative means.
The increased visibility in pharma supply chain is essential. Not only is it a critical part of quality assurance, visibility of the shipment is a requirement by many of our customers - 67 per cent of FedEx pharma customers require Good Distribution Practices (GDP), a quality assurance program.
We are also pushing visibility boundaries for cross-border logistics with blockchain. Blockchain uses computer code to record every step of a transaction and delivery in a permanent ledger. This offers a new level of transparency that can mitigate some of the most common disputes between customers sending and receiving goods involving time stamps, payments and damages.
In fact, FedEx is working closely with the Blockchain in Transport Alliance or BiTA to ensure that every player in the logistics ecosystem can gain from this technology.
With billions of dollars of drugs and medical devices moving through the global supply chain each year, manufacturers and their logistics vendors are eager to integrate new technologies from diverse fields into their operations with the goal of improving performance and lowering costs.
Digitisation has allowed vast amounts of data to be captured by a growing number of sensor-enabled devices moving through supply chains. As a result, they have put big data and analytics in the healthcare logistics mainstream.
Logistics services — which used to be considered a more tactical aspect of supply chain operations — are now rapidly evolving due to data analytics integration.
Using big data and analytics, we can now identify where and when deviations in temperature control are most likely to occur. Historical data can allow us to deploy optimal packaging designs and use cold cold facilities and transportation, while real-time data analysis can spot specific shipments where intervention is required immediately to save a product.
Natural resources are finite, but innovation and reuse are theoretically infinite. That’s the thinking behind the idea of the circular economy. By some estimates, a global effort could yield more than US$1 trillion in material savings each year.
At FedEx, we operate responsibly, efficiently, and sustainably. To these ends, we developed our ‘Reduce, Replace, Revolutionise’ approach to FedEx aircraft, vehicles, facilities, and materials. The programme focuses on improving productivity while creating new, more efficient solutions.
Circular supply chain impacts not only our customers in the pharma industry, we have goals to multiply efficiency and reduce waste.
Based on our recent Global Citizenship Report.
If the driving motivation for the pharma industry is to improve health and wellbeing, it makes sense for them to embrace a circular industry, including circular supply chain.
Blockchain uses computer code to record every step of a transaction and delivery in a permanent ledger. The emergence of such technology promises a new level of transparency in the supply chain where information provided are validated and verifiable.
This is especially beneficial to the pharma industry given the complexity of its supply chains which requires the input from multiple stakeholders with a number of important requirements placed on them. Speed, quality, and accuracy of the data are big challenges for the industry.
It is our belief that blockchain will transform the package delivery business, including the pharma logistics business:
One key focus for FedEx has always been the identification of innovative ways to provide the visibility required by customers up and down the supply chain. FedEx is a founding member of the Blockchain in Transport Alliance (BiTA), an industry association, and we chair the BiTA Standards Council, which is establishing industry standards for using blockchain technology throughout the supply chain.
The rise of e-commerce has brought about the inevitability of e-everything, and that includes e-pharma.
The core of e-commerce companies, as the name suggests, lies in providing an online platform for consumers to sell and buy products, and not in delivery. Especially not in pharmaceutical deliveries that require special knowledge and expertise.
That has led us to believe that many online pharmacies will still rely on their delivery partners to safely and securely complete the delivery.
For example, Walgreens has partnered FedEx in the US to launch next-day prescription delivery nationwide.
Everyday, FedEx connects people and possibilities spanning six continents and more than 200 countries, we draw on our vast network of more than 5,000 hubs and facilities, 180,000 motorised vehicles to deliver more than 15 million shipments each day. With this scale of operation, we are looking at vast amounts of data that is captured everyday.
At FedEx, we recognise the potential of leveraging big data and data analytics tools to increase efficiency and lower costs. Big data tools are capable of processing large amounts of data in different formats and from varying sources to enable scientists to identify patterns and gaps, which could suggest efficiencies, revenue opportunities, potential problems or competitive advantages that otherwise may not be evident.
Every year the global pharmaceuticals industry suffers a loss of over US$15 billion worth of product due to temperature variations during transit. More than 60 per cent of this loss comes during transportation of the products. This is especially true for the healthcare supply chain, where even minor variations in temperature can affect the integrity of the product
To alleviate this issue, supply chain providers and their manufacturer customers are using big data and analytics to identify where and when deviations in temperature control are most likely to occur. Historical data can allow them to deploy optimal packaging designs and to use cold chain facilities and transportation, while real-time data analysis can spot specific shipments where intervention is required immediately to save the product.
While data about the shipments themselves is an expected first place to look for supply chain optimization, service providers are also closely evaluating data about the warehousing and transportation assets. Many cargo and storage spaces must maintain constant levels of temperature, pressure, humidity and light exposure.
Complete, real-time visibility of the healthcare supply chain has potential to alleviate the losses that manufacturers suffer due to counterfeit drugs, theft, damage, and spoilage.
Big data solutions of the future will integrate data from multiple channels, such as manufacturers, carriers, suppliers, 3PL partners and provider facilities, in order to describe the journey of the product through its complete lifecycle, enabling the stakeholders to identify and address pain points along the way.
In many developed countries' healthcare systems, about 15 per cent of drug products delivered to healthcare facilities are wasted due to expiration. To a large extent, this is attributed to a shortage of skilled labor to conduct drug inventory management in these facilities. Thankfully, predictive analytics are proving extremely useful at improving inventory stock-keeping, storage planning and overall inventory management.
For example, automated tracking systems can reduce the need for manual inventory management and considerably reduce drug wastage due to expiration and spoilage, since facility personnel can be proactively alerted to the status of products in storage.
With inventory data now digitised, healthcare facilities can produce a variety of reports faster and more accurately, helping them meet accreditation and government regulation requirements.
Karen Reddington is President of Asia Pacific Division of FedEx Express, the world’s largest express transportation company. In this role, which Reddington took up in January 2015, she heads up Asia Pacific from its headquarters in Hong Kong. Reddington is responsible for leading the FedEx Express business across the region, including overall planning and implementation of corporate strategies and operations across more than 30 countries and territories with about 29,000 employees.
Reddington is currently serving as the Board Chair of JA Asia Pacific as well as being on the Board of Governors of JA Worldwide. In addition, she serves as the Secretary of the International Women’s Forum and also sits on the Board of Governors of the America Chamber of Commerce in Hong Kong
