Keeping it Cool

Temperature-Sensitive Shipping Needn’t Be Risky Business

HCSClogoThere’s a tricky balancing act to shipping temperature-sensitive healthcare products. Executives at manufacturing and distribution companies want their products delivered on time and at the lowest possible cost but also want to improve customer satisfaction while minimizing losses due to spoilage.

To achieve these goals, healthcare companies should conduct a failure analysis, review the logistics partner’s proactive shipment monitoring capabilities, launch a pilot program, and lower financial exposure to “near zero.”

Getting started should begin with forming a working group of experts representing quality assurance, supply chain management and operations, marketing, procurement and customer experience management. An experienced third-party logistics provider can help facilitate the session.

Step 1: Begin a failure analysis exercise

  • Determine the total cost of each spoiled unit, not just the product itself.

Start by identifying the cost of each “touch point” between the warehouse and the product’s final recipient, ranging from outbound shipping to all spoiled product returns. Next, quantify the percentage of products spoiled in transit. Then, apply that percentage to the total cost to help determine the overall value of product loss. It will also help determine how to best spend funds to fix any problems.

  • Determine when, where and how patients, as well as their clinic and retailers, interact with the product.

The team needs to identify the causes of any spoiled products. This starts by establishing patterns and identifying the nature of spoilage. It should determine the percentage of shipments routed directly to homes vs. retailers, pharmacies and clinics and determine the extent of spoilage along each route.

  • Assess how changes in temperature, time-in-transit and product packaging potentially affect and protect the product.

This helps the group evaluate product packaging and acceptable temperature ranges during shipment. For example, a flu vaccine may have a 2-8° C storage requirement and its packaging may require that it can be in transit no longer than 36 hours.

Step 2: Review the proactive monitoring capabilities of the logistics company

Multiple options should be available that will mitigate risk during transit. These options can range from setting up the manufacturer or distributor to monitor a shipment’s progress from a logistics provider’s website to sophisticated systems that analyzes shipments while in transit .

The review process should include the following:

  • Understand the nature of exceptions causing a missed delivery. A provider’s technology should anticipate the point where a package is expected to move and determine if a shipment is at risk.
  • Consider monitoring capabilities. Does the logistics company have the technology to monitor — and even predict — conditions that can delay a shipment while in transit?
  • Conduct a cost-benefit analysis. The team can explore the cost-benefit ratio of multiple models based on the percentage of spoiled shipments, current cost of shipping, temperature requirements, and the strategy aligned with the critical nature of the shipment.

Step 3: Launch a pilot program

The aim of the pilot is to lower the percentage of product spoiled in transit, improve customer satisfaction and achieve the lowest total cost. Once the pilot has been successful, it can be implemented across the network

Step 4: Lower financial exposure to ‘near zero’

Once a shipping process is in place, a highly experienced logistics provider should offer insurance to provide financial protection while products are in transit. Choices should include basic liability coverage for the cost of the shipment, as well as coverage for the cost of the product’s commercial value

This four-step approach will help achieve efficiencies and establish end-to-end visibility and control of shipments – even during transit. Once experts from all of the parties involved in the shipping process accurately map the supply chain, identify pain points and develop solutions that can be explored and tested, product manufacturers and distributors will deliver their products on time at the lowest cost while minimizing product spoilage and damage. goldbrown2

Robin Hooker, Director of Healthcare Marketing at UPS, recently joined HealthCare Consumerism Radio to discuss how the shift toward patient-centric care is affecting all participants in the health care system. Today, patients are choosing more direct-to-home deliveries; walk-in clinics, such as CVS Minute Clinic and MedPost Urgent Care, are on the rise; the middle class and aging populations in emerging markets are growing. Learn more by listening above.


Vincent Pusateri is Product Manager, UPS Global Healthcare Logistics

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