Ask the expert: Utilizing reusable, real-time technology to reduce supply chain waste

Ask the expert, Pharmaceuticals   February 03, 2020

How Can I Reduce Supply Chain Waste?

Enterprises operating in the pharmaceutical supply chain are increasingly aware of the contributions they can make to reduce their emissions and tackle the consequences of climate change that are being felt now.

Pharmaceutical enterprises are implementing sustainability activities as a positive and visible aspect of their corporate sustainability objectives. Many have plans in place to reduce their carbon emissions, often with specific targets in mind. Some are setting ambitious goals, aiming for sustainable water use, waste reduction and recycling, and even carbon neutrality.

The pharmaceutical supply chain historically has been ripe with waste. This has been in a large part due to a lack of visibility over products during transport, storage, and distribution, siloed data and processes, the many handoff points involved, and a lack of information sharing among stakeholders to identify and mitigate risk.

Reusable real-time monitoring technology is making it possible for businesses to measurably reduce waste and costs and reduce their carbon footprint.

Waste caused by single-use data loggers

Enterprises have historically resorted to temperature monitoring programs that utilize passive, single-use USB data loggers. At the end of their journey, loggers are removed from a palette, data is retrieved from the logger, and the device is subsequently discarded.

For a typical manufacturer, this might add up to tens of thousands of devices that are discarded every year. To visualize the magnitude of the waste involved, a typical data logger measures approximately 11 cm in length. 150,000 loggers would measure 10 miles, or more than 16 km, equivalent to the height of Mount Everest.

Over the course of two years, a large pharmaceutical manufacturer might use up to 450,000 single-use data loggers, which would measure approximately 30 miles, or more than 48 km, equivalent to the height of three Mount Everest’s, in total. When visualized, it is easy to see the potential waste.

At this rate, over the course of five years, the manufacturer might use up to 750,000 single-use loggers.

For a global supply chain utilizing approximately 750,000 single-use, passive loggers over a five-year period this would translate to around 38,250kg in plastics produced—and discarded (assuming approximately 0.051kg of plastic is used in a single logger). It would also translate to approximately 229,500kg CO2 emissions for the plastics production (assuming approximately 6kg CO2 emissions per 1kg of plastic produced). (1)

Waste caused by replacement shipments

Another consideration is the operational waste caused by inefficient processes due to a lack of total supply chain visibility. 

If a temperature deviation has occurred during shipment affecting product quality conditions, it may remain undiscovered until several weeks or months later. Each affected palette requires replacement products to be manufactured, then shipped throughout the supply chain.

There is an environmental cost associated with the manufacture, transport, and distribution of the replacement products, including water consumption, plastics produced (and discarded), CO2 emissions, and fuel.

A reverse logistics program for the return of reusable data loggers would result in CO2 emissions; however, these emissions typically are lower than the emissions resulting from plastics production needed to provide a new logger. (2) Over time, the use of reusable IoT data loggers translates to a substantial reduction in plastics and CO2 consumed.

Utilizing reusable, real-time IoT technology

Today, reusable, real-time IoT technology is providing practical benefits to supply chain stakeholders in addition to sustainability savings.

In addition to the real-time data that a monitoring program can provide, longer-term trends and performance analytics regarding particular lanes, points of interest such as airports and harbors, packaging types, and so on, can be more quickly discoverable. Dashboards can now enable pharmaceutical manufacturers and logistics providers to determine where the most substantial risk occurs within their supply chain, and subsequently, to mitigate against them. 

Benchmarking environmental impact

Today’s Internet of Things (IoT) technology provides shipment information in real-time, enabling businesses and logistics providers to identify issues before they escalate and take proactive, corrective action. Through analytics, enterprises can identify trends throughout their supply chain and implement a tangible plan of action to reduce waste and their carbon footprint.

Through IoT-enabled supply chain data, logistics teams can measure the reduction in excursions and rejected shipments resulting from these actions. With this information, enterprises can tangibly measure their carbon footprint reduction and sustainability savings, including fewer plastics used and less CO2 emissions produced. 

Consider the global pharmaceutical manufacturer referenced above. After shifting from a single-use temperature monitoring data logger program for its supply chain operations, the number of loggers used annually changed from approximately 150,000 disposable loggers to 35,000 reusable data loggers offering a multi-year shelf life. When considered along with the wider opportunities for supply chain sustainability improvements that reusable, real-time IoT technology offers, the savings add up.

Moving forward

External pressures to adopt corporate responsibility programs aside, businesses should not overlook the benefits of adopting innovative solutions as part of their sustainability efforts. Enterprises looking to save money in the long-term by utilizing sustainable solutions and improving supply chain efficiency in the cold chain are realizing resources and cost savings, which, in turn, can be allocated elsewhere. As a result, some businesses now also consider sustainability performance an essential part of the overall supplier performance equation in addition to key requirements of quality, cost, and delivery.

As demonstrated above, the potential business benefits of greener supply chains are considerable. Companies that succeed in making their operations more environmentally friendly can expect operational cost savings resulting from less waste, reduced fuel, energy, and transport costs, and a lack of compliance penalties. 

In 2017, more than 4,800 companies reported (3) supply chain emission reductions amounting to 551 million metric tons of carbon dioxide. This equates to $14 billion in savings and does not factor in the additional cost savings arising out of reduced replacement products and fewer investigative hours spent on reviewing data in the event of an excursion. Moreover, supply chain improvements of this nature invariably enhance an organization’s brand and reputation considerably.

As an industry, we need to recognize the opportunity for key stakeholders to work together to stimulate innovation and technology adoption that can reduce waste, emissions, and the impact of climate change on human health. Although the requirements now needed to make a transformational change may take many years to generate a substantial impact, the journey must start today.

The potential for what can be achieved through technology and collaboration to improve the visibility, efficiency, and sustainability impact on the global food and health supply chain working may literally help shape the future.

How is your organization tangibly measuring and improving its carbon footprint throughout your supply chain? I would love to hear your best practices and lessons learned. 

Have a question? Feel free to send me an email at ada@controlant.com. 

Resources

  1. Time for Change, https://timeforchange.org/plastic-bags-and-plastic-bottles-co2-emissions-during-their-lifetime/. Assumes 6kg CO2 emitted for 1kg of plastics produced.
  2. DHL Carbon Calculator, available at https://www.mydhl.dhl.com/en/about_us/green_solutions/carboncalculator.html. Based on calculations, assumes 0.05kg of CO2 to retrieve one logger from the EU. Assumes 0.1kg of CO2 to retrieve one logger from China. 
  3. United Nations Climate Change Report, 29 January 2018, “Leading Companies Cut Supply Chain Emissions, Save Money,” available at: https://unfccc.int/news/leading-companies-cut-supply-chain-emissions-save-money

This article is taken from Pharmaceutical Manufacturing and Packing Sourcer May 2020, pages 39-41. © Samedan Ltd

About Ada Palmadottir

Ada Palmadottir is Business Development Director at Controlant. With more than 20 years of experience in pharmacy, management, and technology, Ada has extensive international experience in sales, operations, and marketing, specifically in the areas of product, vertical alliance sales, and partnerships related to pharmaceutical products. She is a licensed and experienced pharmacist and earned a Master of Pharmacy from the University of Iceland and a Master of Business Administration from the Norwegian School of Management in Oslo. Ada has been working with Controlant for the last eight years. 

close
close
close
close