As promised in an earlier blog I want to shed some light on how SAP is approaching the existing and emerging requirements around track & trace in the pharmaceutical supply chain and share our view on how these projects should be approached.
When companies approach this subject they first and foremost do so to be compliant with certain regulations that already exist or are emerging worldwide. This is not a question of whether to react or not! Pharmaceutical Market Authorization Holders (MAHs) have to do so just to stay in business. So the key questions are: How can I become compliant and what does this cost me? And how can I stay on top of emerging regulations so that I stay compliant? But also, thinking beyond compliance: Shouldn’t there be some benefits that I can harvest to at least create some return on investment? And to achieve all this, how should I shape my track & trace strategy overall to be successful?
Today, I will focus on the strategic view and will address the compliance details as well as potential benefits in separate blogs.
Establishing track & trace (aka. serialization) within a pharma company requires executive sponsorship. The efforts spread too far and are too expensive to look at this as a tactical effort. Just the costs for implementing serialization printing and inspection on the packaging line range from €250k for pure serialization to €500k if aggregation is in scope (with similar numerical values in US$ for North America). Therefore companies should involve all business areas like:
Package Engineering for changes to the package artwork,
Procurement for any changes that might impact the supply of e.g. packaging materials, equipment and services like outsourced manufacturing,
Engineering for implementing printers and scanners in the packaging line, as well as aggregation stations and enhancements to palletizers,
Logistics to implement the changes in warehouse operations, pick and pack operations and shipping,
and of course IT as all this needs to be supported by an integrated and global track & trace solution.
Here are some thoughts on how to approach such a project:
Make yourself knowledgeable
This should be a given, and there is plenty of good content out there in the internet free of charge. However, most of this is rather high level and the famous GS1 “flag” slide has probably been copied a million times by now. But to understand this topic you have to go deeper, so talk to your peers in the industry. There are some good conferences out there with my favorite being the one hosted by Movilitas (like the last one in Frankfurt… and this is not just because of some cool videos from the explosives industry that also has dedicated requirements for track & trace).
In general it is my impression that people dealing with this topic are willing to share their knowledge, as everybody gains from collaboration. SAP has for example established a serialization round table for our customers where traceability experts of more than 40 companies meet regularly to exchange news on upcoming legislation, share successes as well as challenges within the projects and with the software being used. This round table was the driving force to shape SAPs track & trace strategy. In that context we have also established a collaboration group on SAP JAM where all participants can document and exchange world-wide legislation news and information.
Even if current legislation doesn’t affect you, new legislation is just around the corner. My urgent recommendation is that pharma companies start their projects now to comply with e.g. EU Falsified Medicine Directive (FMD) to be ready when it becomes effective by late 2018. Even though this seems to be far away, do not underestimate the effort to equip your packaging lines, adjust your processes, train people and establish the central IT infrastructure. Most companies are going after the same resources, both on the hardware equipment as well as the consulting side, and if you want the best, you should secure these resources now. There are already signs of skill shortages in the market.
Select you vendors wisely
To successfully implement your track & trace strategy you must engage with hardware providers to equip the packaging lines, software vendors to provide the central IT infrastructure (like the repository and serial number management capabilities), as well as consultants.
Serialization projects are a little different from classic SAP projects. Very often the setup for one plant or one packaging line cannot be copied easily to another location 1:1, so only parts of the project can be “rolled out”. Other aspects may need to be looked at for every country, every plant or even every packaging line. So you should make sure you engage with a consulting company with dedicated know-how in the area of serialization that understands the vertical integration requirements from the line all the way to a global repository.
Different strategies exist for connecting the packaging lines to the central track & trace infrastructure. While some hardware vendors propose an end-to-end solution including the full plant site-server capabilities others go for a best of breed. While the first eases the integration it locks you in to a specific hardware vendor. The second option provides more flexibility and allows introducing latest scan and printing technology but of course adds the burden of integration. However with the creation of the new “Track and Trace Working Group”, the industry is trying to standardize the connectivity between packaging lines and IT systems.
And last but not least, think about how you want to setup you central repository. Make sure that this repository is truly global, capable to handle the future volumes and allowing to be extended for whatever serial number requirements may emerge. Make sure to get the deployment flexibility you need so it’s you to decide whether to deploy the solution in the cloud, on premise or in a hybrid approach. And remember that track and trace solutions must be validated so a vendor audit may be necessary. Ensure that your vendor has a roadmap for upcoming legislation and is actually able to execute this.
Now what’s next? SAP engaged with 13 leading companies, including 9 of the top 20 pharmaceutical companies to co-innovate a next generation track & trace solution capable to handle the upcoming volumes at a reduced TCO. During this co-innovation process our customers helped SAP define and review the specification, and even the design of the target solution, to ensure that SAP delivers the right capabilities in time to provide immediate value.
In addition, to address the headaches caused by the need for collaboration between supply chain partners, SAP has started an adjacent initiative to solve this problem as well. I will cover this in a separate blog soon.