Biotech: Saving Shipments

How a Top Biotechnology Company Saved $1 Million in an Hour with Real-Time Visibility

A top biotechnology firm manufactures medications for neurological disorders, such as muscular dystrophy or dementia. The company must carefully monitor shipments of finished medicines to maintain patient safety, comply with regulations and ensure brand integrity.

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Challenge:

Damage, theft, diversion, fraud and counterfeiting of high-value medicines are all significant issues for the pharmaceutical industry today. To protect patients and revenue, this biotech firm needed visibility to in-transit inventory from their plant to the customer distribution center. The firm also wanted to identify any areas that posed a potential risk for supply chain disruptions.

Solution:

To comply with the need to understand exactly where the biotech company’s finished goods were in transit, in real time, Savi provided sensors that tracked the location of the truck using GPS satellite pings and an electronic tamper detection that sent a signal if the sensor cable was cut.

A sensor was placed on every truck. The route the driver was to follow and the Points of Interest (PoI) for origination, stops and destinations were defined and geofenced in the Savi Visibility™  platform. Alerts were configured to notify the company’s Global Security Operations Center (GSOC) to out-of-band conditions such as defined early or late pick up, early or late arrival, and excessive dwell time.

Result:

One shipment of cold-packed finished goods raised an alert due to excessive dwell time greater than 30 minutes for an unplanned stop. The GSOC checked Savi Visibility and saw that the truck was stopped in a church parking lot along the planned route.

GSOC operators called their carrier to ask if the truck had broken down. The carrier was unaware that there was any problem, but once they contacted the driver, found that the truck had in fact broken down. Without consulting the company, the carrier dispatched another truck to pick up the load.

Once the new truck was dispatched, the carrier called the biotech company to let them know the truck was on its way and would arrive in a few hours to pick up the load and take it to the destination.

However, the goods were cold-packed and the packaging would only hold the medicines at the required temperature for a limited time. The GSOC operators used the Savi Visibility ETA from the original truck’s current location to determine that the new truck could not get the goods to the destination before the cold pack would expire.

Expiration meant that the goods could spoil if the temperature was out of compliance. Worse, it was Friday and the distribution center closed early and would not reopen until Monday. Missing the operational time for the distribution center meant the temperature-controlled goods would have to sit over the weekend and would definitely spoil.

The GSOC operator realized that the new truck could return the goods to the origination where there was refrigerated storage before the cold-packing expired. The GSOC instructed the carrier to route the new truck back to the origination point which saved the shipment.

From the time the excessive dwell time alert was sent to the time the new truck was rerouted back to the origination was less than one hour, keeping the cold packaging well within the mandated expiration window. This decision saved the company $500,000 in profits.

ROI Calculation:

Cost of solution/shipment = $25

Cost of testing cargo safety = $1,000,000

Cost of cargo = $15,000,000

Profit on cargo = $1,500,000

In this case, one shipment more than recouped the entire annual cost of the visibility solution, much less the cost at a per shipment level.

If the cold pack time window had expired, the company would have been required to test the medications to see if they were out of the temperature range and therefore spoiled. The cost of the testing is $1 million.

If the temperature was out of range and the shipment spoiled, the profit and the cost of the goods would be lost as well as the $1 million spent on testing. Instead, the new truck arrived at the destination before the cold package expired—saving $1 million testing cost, as well as the cost and profit on the shipment itself.

The shipment was safely stored over the weekend and the shipment went out the following Monday without incident to the destination.