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Solutions for pharmaceutical logistics

14 July 2015

The pharmaceutical industry is facing enormous changes. New regulations, increasingly more complex products, steadily expanding product portfolios and ever smaller batches increase costs and risks in logistical processes. Michiel Veenman, Director Solution Management Pharmaceutical Industry at Swisslog, explains the ways in which the industry can overcome the challenges of the future.

What do you view as the primary tasks of your new position?
Michiel Veenman: One of my primary tasks is to build bridges between what our customers want and the new technologies and solutions we are developing. In my view, it is important to understand the needs of the pharmaceutical industry before we start thinking about how to turn these needs into optimised solutions. Other aspects that are important to me are to minimise implementation risks and efforts for our customers. We want to achieve this by continuing to standardise our solutions and by offering expanded training programs.

Could you briefly describe your professional background?
Early in my carrier, I have worked for one of our competitors. During this time, I worked primarily in the areas of system simulation, analysis and evaluation. This gave me the experience that only the combination of smart software with good layout planning can give leading edge performance in intralogistic systems. In the last five years before I joined Swisslog, I handled logistics and IT optimisation for a small pharmaceutical wholesaler that markets veterinary products.

What makes your work at Swisslog interesting?
At Swisslog, I have the opportunity to work in an international environment and to deal with a wide range of topics. I also find it extremely fascinating to see how the industry is constantly changing and how responds to that. This dynamic approach, combined with Swisslog’s attractive range of solutions, are what drive me to push things further.

What would you say are the biggest challenges currently facing pharmaceutical logistics?
The logistics processes in the pharmaceutical industry are facing growing pressure from many different directions. At present, companies are investing heavily in researching improved drugs. This inevitably leads to greater complexity in production and handling processes. Another challenge facing industry logistics providers is that product batches are decreasing in size while drug variety continues to increase. With a view toward the future, pharmaceutical logistics providers will have to deal with a growing demand for temperature-controlled storage and transportation. In addition, legal provisions and regulations will become increasingly important for pharmaceutical logistics. Just a few years from now, it will likely be necessary to trace each pharmaceutical product in a batch across the pharmaceutical industry’s entire logistics chain. This presents major challenges to IT and warehouse management systems while also requiring us to rethink the selection of suitable picking systems.

Multichannel distribution is a dominant issue, not only among e-commerce companies but increasingly also in the pharmaceutical industry. Can you explain why this is?
Because pharmaceutical companies are actively working on building new and more lean sales channels. In the traditional pharmaceutical supply chain, products move from the manufacturers to pre-wholesalers and pharmaceutical wholesalers until they reach the pharmacies. This reduces visibility on the product and it’s end users. It also increases stock value in the chain. Therefore, parallel to this classic sales approach, some companies have already come up with specific plans to build new sales channels, such as direct-to-pharmacy and direct-to-patient delivery.

Among the general benefits of automated logistics systems is the fact that they save space and require far less personnel. How important are these aspects to the pharmaceutical industry?
These are two very important issues for pharmaceutical companies. Those familiar with the industry know that many companies must contend with extremely limited space in production. Some companies therefore come to us with the explicit request to come up with a space-saving solution for storage and picking. Increased cost pressure from generics and healthcare reforms is, of course, another important issue in the industry. Against this background, more and more companies are looking for automation solutions because they have a great potential to lower labor costs and eliminate cost-intensive picking errors.

What kinds of technical innovations is Swisslog working on for the pharmaceutical industry?
To make our software portfolio even more attractive, we are currently working on tailoring our WM6 warehouse management software to the specific needs of the pharmaceutical industry. Elsewhere, we see that our pharmaceutical customers are interested in robot solutions for production lines. In addition, we are paying a great deal of attention to the desire and pioneering spirit of some pharmaceutical companies to introduce multi-channel solutions. With AutoStore as well as our shuttle solutions, we have expertise in this area. I am certain that it is just a matter of time before we will implement the first pharmaceutical-specific customer solution with one of these systems.

Swisslog pursues a holistic solution approach and offers its customers integrated solutions from a single source. What benefits does this have?
Integrated solutions are required in order to ensure seamless logistics processes. Swisslog offers such solutions from a single source, eliminating the need for audits and interface checks with many different subsystem suppliers. Standardised user interfaces help make logistics systems more efficient. Noticeably fewer employee training sessions are needed. Input errors can be eliminated almost entirely.

What changes will the field of pharmaceutical logistics experience in the future?
I think the changes in pharmaceutical logistics are likely to be evolutionary rather than revolutionary. I expect that the trend toward smaller drug batches and delivery volumes will continue to intensify. The next generation of automated guided vehicles will lead to greater flexibility in production planning and the design of factory layouts. Where the multichannel trend is concerned, it will be necessary to tailor solutions even more closely to the requirements of the pharmaceutical industry.