Why the cold chain is moving to the cloud

Technology   01 Jul 2019

Today’s supply chain leaders are moving millions of tons of perishable food and beverage products, medicines, vaccines, and medical technology and materials that require strict temperature control and monitoring to ensure product quality and integrity.

Supply chains provide the critical infrastructure and backbones for the production, distribution, and consumption of goods, and today, may span thousands of miles across the globe, involve numerous parties.

An effective supply chain strategy is essential to your operational efficiency, compliance, customer centricity, and carbon footprint. New regulations, fluctuations in demand, new products and technologies entering the market, the need for ethical supplier management, and poor visibility of global supply chains are all pushing the limits of the traditionally siloed, global supply chain model.   

Today’s supply chains need agility, integration, visibility, and predictability beyond what traditional systems and technologies have been able to deliver. A traditional temperature-controlled supply chain can add unnecessary expense to innovation and may lack the flexibility needed to adequately respond to changing market demand. Supply chain rigidity may not only hinder growth; it can jeopardize an organization’s survival. 

On-premise supply chain management technology can often add unnecessary expenses to innovation and growth, and often lack the visibility and flexibility needed to respond to changes. Often, too much money is spent on supporting maintenance and upgrades, rather than supporting and driving innovation. 

On the business side, the large upfront costs involved in building an effective supply chain can be daunting. When dealing with the highly regulated pharmaceuticals, life sciences, and food & beverage markets, end-to-end visibility into the many different activities that make up your supply chain is paramount. This visibility is essential in order to sufficiently manage risk, reduce costs, and ensure profitability and customer satisfaction. Without it, their supply chains may hold growth back.

An end-to-end approach

Due to the many shortcomings of rigid legacy on-premises applications, supply chain innovators are moving toward building a modern, flexible, end-to-end supply chain that is more suited for dealing with the dynamic challenges of today’s business environment. In a 2019 survey of more than 100 heads of operations and logistics, 66 percent of respondents indicated that they already using cloud computing and big data or were in the process of implementing it for their supply chain, and another 29% were actively discussing it (see Increasing Visibility With Real-Time Data,A LogiPharma Report, 2019). In the pharmaceuticals and life sciences sector, where temperature-controlled shipments account for approximately 85% of the supply chain, progress towards integrated, end-to-end visibility through the adoption of cloud computing and data analytics is gaining momentum.

Cloud-based supply chain monitoring provides a number of benefits, including lower upfront access, secure access—an important point for the pharmaceutical supply chain, simplified integration, automated, continuous upgrades, and easily scalable. Through the addition of Internet of Things (IoT) technology, which can include sensors for tracking temperature, humidity, light, pressure, and so on, real-time data regarding product quality and integrity is now immediately available.

What do today’s cloud-based cold chain management software solutions have that on-premise applications do not? 

1. Completeness and accuracy

One of the greatest challenges with a traditional temperature monitoring solution for the supply chain is the difficulty in integrating systems to ensure that information is consistent and easily accessible throughout. In the life sciences supply chain, valuable pharmaceutical products, medicines, and vaccines may move through various handoff points until they reach the patient. Traditionally, critical supply chain data that might impact product integrity and safety, including temperature conditions and security-related information, would only be visible post-shipment, if at all.

Supply chain monitoring in the cloud provides the possibility for an open and seamless flow of information to various stakeholders as it happens, as well as the ability to integrate with a variety of IT solutions, such as financial systems, enterprise resource management software (ERP), quality management systems, and so on. 

It enables real-time collaboration and comprehensive visibility through a single source of truth, that can have a tangible impact on supply chain operations and efficiency. Information that traditionally has been siloed can be connected, providing the ability to gain high-level and granular supply chain data.

2. Collaboration

Enterprises need to have close collaboration and alignment with many different stakeholders in order to execute a successful supply chain strategy. It’s natural that businesses would extend this collaboration beyond the four walls of their organization. Connections to manufacturers, shippers, carriers, wholesalers, and distributors are needed to improve the accuracy and velocity of information shared. 

Information shared among stakeholders can help everyone improve. This is especially important in supply chains where patient and consumer safety is at stake. 

Traditionally, pharmaceutical enterprises and major food and beverage brands would need to rely on third-party data, which might not provide an accurate and complete picture of the environmental conditions that products were exposed to en route.

Through cloud-enabled software, these enterprises can now gain real-time supply chain information regarding product temperature conditions and risk points, as they happen. They own and control the data, so no longer need to rely on logistics partners, shippers, and carriers to provide it.  

3. Speed

Innovation is a key priority for most organizations. However, misalignment between strategy and execution can hinder the ability to commercialize products and profit. End-to-end supply chain visibility means you can bring products to market faster while controlling risk. With the added ability to monitor and improve decision-making through a single source of supply chain truth, businesses gain the ability to quickly identify risk and drive continuous improvements. 

4. Agility and flexibility

There are a number of key drivers that are placing increasing demands on supply chains. For the life sciences supply chain, new medicines and technologies, aging populations, and supply chain consolidation needed after pharmaceutical merger & acquisition activity are just a few that require an increasing ability to adapt to an ever-changing landscape. 

In the food and beverage sector, consumer demands for fresh ingredients, an increasingly stringent regulatory landscape, and foods increasingly sourced from afar are posing increasing challenges for supply chains. Many food brands aren’t able to rely on data furnished from their suppliers and lack the resources to audit and verify the accuracy of information provided to them.

Cloud-enabled, digitalized supply chains are nimble and efficient, providing on-demand stakeholder access to critical real-time and predictive information to make informed business decisions.  

5. Cost and efficiency

Cloud-based supply chain management solutions offer a number of financial advantages to enterprises. Low upfront investments and subscription-based pricing are significant because they negate the CAPEX costs needed for a large initial outlay. 

Cloud-enabled supply chain software can provide real-time or near real-time data, providing enterprises with the ability to proactively respond to quality issues in the supply chain and take immediate corrective action to prevent product waste. Over time, this can add up to significant, exponential cost savings and a reduced carbon footprint.

6. Ease of use

Cloud-enabled supply chain technology helps speed up deployments. This translates to time and cost savings, which can instead be directed towards innovation.

For the end-user, cloud-based software can provide an intuitive user experience and quick access to data and insights, including shipment statuses and deviations, from a desktop or mobile device. 

7. Security

The traditional approach of IT has been: if I don’t control it, it isn’t secure. This mentality has permeated industries that are highly regulated. ERP is an example where the cloud was frowned down on. Pharmaceutical manufacturers are another example. Now, leading ERP providers are storing crucial financial information in the cloud. Likewise, pharmaceutical enterprises are moving towards real-time temperature and product movement monitoring software solutions, where data is stored in the cloud.

For data to be compliant for pharmaceutical use, regulatory bodies in the U.S. and Europe, high security and redundancy standards exist. Data integrity must be ensured from a device to the end-user. Detailed traceability of user actions and electronic signature actions must be obtained securely and accurately. 

Traditionally, it was believed that these requirements could not be achieved through a cloud-based supply chain solution. Today, however, IoT and cloud-based solutions can be validated and compliant for pharmaceutical use cases. 

8. Data and predictive analytics

Moving forward, the capabilities of real-time data and analytics will help transform global supply chains. Cloud-based dashboards are already enabling businesses to use data to drive their planning activities. Insights regarding lanes, risks points tied to factors such as weather and time of year, suppliers, logistics partners, packaging, and so on are driving crucial decision making today. 

Cloud software solutions are here to stay, even within the most highly regulated industries. The trend has been consecutive and gaining momentum. The fear of data not being housed within the four walls of an organization is no longer reasonable. Moving forward, more supply chains will be digitalized, efficient, and able to withstand future demands.

Interested in learning how pharmaceutical cold chain data can be securely transferred to the cloud? Contact us and we would be happy to show you.

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