Minimizing Costs while maintaining Optimal Security in Pharmaceutical Logistics

products-servicesSofrigam S.A

May 13th 2020

Sofrigam has developed solutions to meet the challenges of cost optimization, risk management and compliance with regulations faced by pharma companies and their logistics partners in pharmaceutical cold chain shipping.

These solutions include methodologies to calculate and minimize overall logistics costs, recognizing the added complexities of the technical and operational constraints specific to each organisation, maintaining cool chains and ensuring the safety and security of temperature-sensitive pharmaceutical products during transport.

Role of cold chain in logistical costs

Around a quarter of pharmaceutical companies’ total costs are expended in logistics, with the expenses of supporting the logistics of the cold chain for drugs accounting for a majority of the costs. Any improvement in this part of the logistics chain, to make it safer and more efficient can therefore yield significant overall savings.

Never breaking the cold chain is the foremost constraint when transporting thermal sensitive drugs. This involves keeping the product at a constant temperature throughout the transport, including during storage periods and during transfer to different modes of transport.

This means choice of the insulated packaging solution is decisive.

With so many competing solutions for cold chain transport available, it is essential to understand the techno-economic issues related to the performance and use of each thermal packaging system.

Uncovering ‘hidden’ costs

Total Cost of Ownership (TCO) determines the direct and indirect costs of owning and using a cold chain packaging solution. Using TCO as the main metric makes it possible to evaluate the overall financial impact of a purchase decision in order to move towards the best choice of temperature-controlled packaging solution.

Analysis of the life cycle of insulated packaging reveals that other ancillary costs can have a significant impact on the overall cost of the packaging solution.

While the purchase price is an important and easily identifiable criterion, it represents only the most visible tip of the overall costs ‘iceberg.

Below this are other readily quantifiable metrics such as overall costs of transport, storage, preparation, packaging, loss or retrieval of packaging (if reusable), and the service provider’s after-sales service.

Below this, companies start to enter the realm of ‘hidden costs’ such as those related to security risks (loss, theft, temperature deviations, etc.) and even more indirect factors such as storage of packaging materials, ease of handling and preparation, preparation and loading times, ‘opportunity costs’ in mode of transport, ratio of overall weight and volume to payload capacity, etc.

Finding the ideal balance

These are among the costs to consider in a TCO analysis of reusable insulated shipping packaging to identify the ideal best compromise between overall cost, safety, security and quality.

Contact Sofrigam for consultation on choice of most cost-effective insulated shipping solution for streamlining temperature controlled pharmaceutical transportation (see Resources).