Cold Chain Challenges in Emerging Markets Jan 2012

7/31/2019 Cold Chain Challenges in Emerging Markets Jan 2012

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Unique Challenges in Maintaining Cold Chain in Emerging Markets Across the Globe

1. Security

Africa, Asia and Latin America signify key emerging markets for the pharmaceutical industry, butare also hotbeds of activity for counterfeiters.

According to data from the United Nations, as many as three in 10 pharmaceuticals in theseregions are fakes and in Asia and Africa between 50 and 60 percent have been found to have

APIs above acceptable levels.

Securing the cold chain plays an essential role in combating this, but infrastructure and regulationis less well developed than in the established United States and European markets, presenting agreater challenge to manufacturers and distributors.

2. Maintenance of cold chain conditions in the air and on the ground

The same underdeveloped infrastructure which presents security concerns for the industry alsochallenges the maintenance of cold chain conditions, as does the unstable power supply which isnot a factor in developed markets.

India, viewed as one of the key growth markets, recognized its weak link by improving itsprovision at major airports including Mumbai and Hyderabad but cold chain facilities stillpresent a barrier to the development of the market in the country.

Authorities are now looking at the creation of pharma hubs with stronger position, a model whichwould suit locations like Singapore, which can act as a gateway to the rest of the Asian market.

3. Planning, adaptability and contingency plans

Supply continuity is vital for the pharmaceutical industry, but the potential politically instability inemerging markets as highlighted by the unrest in the Middle East over recent months adds anew dimension to the creation of continuity plans.

Such issues should be accounted for when conducting a critical risk assessment, identifying thecontrols in place and testing critical responses. Problems which may be relatively simple to

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address in regions with established cold chains take on a new significance in countries whereprovision is sporadic and expertise is thin on the ground.

4. Required documentation and deciding on the value of the material

Documentation is becoming an increasingly pertinent part of regulatory compliance, even inemerging markets. Pharmaceutical Commerce's Bio/Pharma Cold Chain Sourcebook notedCanada, Saudi Arabia, Singapore, Malaysia and Argentina all now demand documentation of

individual shipments as a requirement of entry.

Under World Health Organization Guidelines, time and temperature controlled shipments musthave monitoring systems providing documentation which can be both stored and accessed.

However, standardization of even the labeling of cold chain shipments is something which hasbeen lacking until recently and required documentation varies between markets.

5. Regulatory compliance

With eight of the top 10 pharmaceutical products expected to need cold chain storage in 2016,regulators are stepping up their requirements. Yet, ensuring regulatory compliance across aglobal network of facilities, particularly in emerging markets, remains a challenge.

Better information is being seen as the key to ensuring regulatory compliance, using data loggingtechnology to ensure they meet the tightened shipping requirements being introduced by not justthe EU and the United States, but also emerging markets.

6. Improvements in kit design

Cold chain packing is advancing with combined aims of cutting environmental impact, meetingregulatory requirements and ensuring the security of the supply chain.

Packing firms ...the growing outsourcing of clinical trials as the need for reliable forms of packing,which offer longer-term protection from temperature excursions and do not use dry ice, removingthe need for repackaging.

Smaller and lighter packing will also cut the volume of shipment needed, reducing the cost and

further adding to the economic benefits which initially attract pharmaceutical companies toemerging markets. Improvements in kit design are being aided by the expansion of distributioncenters, which will remove the need for packaging to be returned to its point of origin.

7. Technology enabling tracking of temperature and location

To provide complete assurance throughout the cold chain and meet regulatory requirements inemerging markets, pharma companies are increasingly turning to track and trace technology.

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DHL is among the companies which recently debuted its track and trace technology, claiming todo so in response to the international demand for cold chain facilities.

Sentry is capable of transmitting and recording distribution data on temperature, humidity lightand sudden movement, as well as generating heat maps which detail environmental conditionsand data on high-crime areas, SearchDataManagement reported.

RFID technology is being touted as having a lot of potential in this area, either through passivetags which can be read at certain points or active tags which submit a periodical signal.

Dealing with Cool Chain Challenges

As organizations across the planet increasingly turn to cool chain solutions, managers are facedwith a growing number of challenges.

From tightening air capacities, controlling logistics costs, fixing leaks with air freight transport tomaintaining security in the cool chain and ensuring regulatory compliance, the issues which mustbe addressed are all vital in ensuring operations run smoothly.

For many companies, however, the problem has not been with the cool chain itself, but a failureto turn to the technology soon enough.

This was recently highlighted by Rajshekjar Kolkur, regional manager of L&CO South at CadburyIndia Ltd, who pointed out that Cadbury only "woke up" to the benefits of a cool chain after havingreceived around 221 complaints about its products.

"It was observed that 69 per cent of these were related to heat damages and that around 7.5 percent of sales value was the damaged stock. The maximum complaints were received in summer.We realized that end-to-end cold chain is required to drive consumer satisfaction through reducedheat damaged complaints," he explained.

Aside from Cadbury Silk Route and Cadbury Bournville, which each demonstrated 100 per centcool chain compliance, 68 per cent compliance has also been observed for other products thisyear, which Mr Rajshekhar says has been a "big leap" in cold chain for the company.

"The plan is now to add another 40 to 50 trucks to cool chain next year in a bid to move to 100per cent compliance," he added.

Currently Cadbury India has around 135,000 square feet of cold storage in the country, so clearlysecurity is a major concern.

In temperature-controlled factories, warehouses and depots, the company has installed atemperature data logger with an SMS/email function in case of a violation.



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This is intended to advance compressed monitoring and alert in case of breakdown and also hasa 'door open alarm', while for primary transportation the company has a temperature data loggersent at periodic intervals with a print-out facility at the end of the journey, and is exploringadvancing to a temperature data logger with SMS/email in case of violation.

The process of accepting cool chain as a "major ingredient" of business in fruits and vegetablesdistribution and storage is gaining ground across the developing world.

Governments are helping by educating interested parties and also making provisions for grantsand incentives, but stressed the need for investors to be given a "sound business model" whichcan deliver a return on cool chain investment to boost interest in executing projects.

Retail chains which have stakes in agri-business are the correct entities to "flow investment" intothe farm-end cool chain infrastructure so that the quality of the agri-product from the farms toretail will be enhanced and waste significantly reduced.

With strong presence of retail chain in the farm area, the farmer is expected to get quicker andbetter returns for his farm produce.

Pharmaceuticals, dairy, fish, meat and poultry are all segments requiring a robust coldchain for supply and distribution - something facing organizations across the planet.

For the fish industry in particular, ice trolleys at the supply side and reefer containers at thedistribution end are needed, and it is this area where technological advancements willenable the formulation of new strategies to reduce cost and increase performance.

The work being done by authorities to extend incentives for the cold chain industry and bringabout investor-friendly policies. Technical standards for cold chains have already come into force,affecting ripening rooms and transport refrigeration, and ensuring regulatory compliance isanother hurdle facing companies in the months and years ahead.

A new scheme for integrated cool chain and the modernization of abattoirs has already begun,and as the rate of food processing improves, the need for technology to build a robust cold chainwill be "felt and fulfilled. It is these technological advancements, along with ensuring operationalsecurity and compliance with sector regulations, which will remain at the forefront of industryleaders' minds in the near future.

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Cold Chain Challenges in Emerging Markets Jan 2012

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