[Interview] Frank Binder on issues with EU FMD compliance and the digitalization of supply

With the Falsified Medicines Directive (FMD) and the Drug Supply Chain Security Act (DSCSA) deadlines now passed, the industry is looking to understand how these regulations will have a lasting imapct.

In advance of the FutureLink Barecelona 2019 conference, Frank Binder, global head of supply chain management at Santen Pharmaceuticals, shares his perspective on serialization compliance and the digital future of the industry.

Read More: How to go from serialization to intelligent supply 

Now that we are past the EU FMD February deadline, are you seeing any unanticipated issues arise (either within your organisation or the industry)?

Frank: "In the run up to the implementation, we saw an uneven level of readiness among CMOs. In the end however, all of our supply chain partners were ready in time and I think that, overall, the industry has mastered serialization compliance.

As for unanticipated issues, it’s too early to tell. Most dispensers are still distributing products that were manufactured and released before the FMD deadline, so there hasn’t been much verification performed just yet.

We are expecting to see some false positives and some challenges when products are scanned

We are expecting to see some false positives and some challenges when products are scanned due to small process issues. It’s likely that there will be some kinks in the end to end process, as with all new systems, which will lead to investigations of packs that are actually safe. I expect quality assurance teams to be very busy in a few months’ time as they begin to review these incidents."

How do you see serialization impacting the industry from a business/trade partner perspective?

Frank: "For the manufacturing part, serialization is well under control – the process for handling serial numbers is in place. This has been tested and is pretty straight forward if implemented correctly at the manufacturing line. Where it is more impactful is everything that happens after the production line - logistics processes are perhaps the most affected as they need to be much tighter and more controlled. Logistics managers need to know what packs they’re putting on a pallet; pallet building, retrieval and dismounting needs to be much better controlled and this imposes quite some of changes in the warehouse and shipping areas.

Third party logistics providers need to be much more involved in the process than ever before

There will be lots of exceptions if damage happens at a warehouse and products need to be identified and decommissioned. This means that third party logistics providers (3PLs) need to be much more involved in the process than ever before.

It will be interesting to see what wholesalers will ask their suppliers, in terms of palletization, or aggregation. We’ve seen wholesalers requesting this in the U.S. and South Korea and I expect it to come up here in Europe."

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Moving to digitalization – what digital initiatives most interest you?

Frank: "I see a big area of benefit in improving the links we have with our partners (CMOs and 3PLs). We plan to use these new digital connections with our trade partners to exchange planning data, manufacturing status, demand data, and work on scenario planning with the aim of streamlining our supply chain.

We are considering moving into collaborative planning with our supply chain planners, in the mid term. By providing our CMOs directly with demand data, we could jointly establish optimized supply plans.

There is potential in collaborative planniong, streamlining the supply chain and gaining transparency

We also need to see how we can use serial numbers to gain more transparency on where our products are. In the past when we sold products to wholesalers, we lost visibility from that point on, and there could be value in getting more visibility downstream.

Eventually, I expect artificial intelligence (AI) to play a bigger role in the planning and execution area. If shipping and execution processes are well defined, we could let AI take care of booking of transportation in many cases, for example.  

If we establish the links between all pharmaceutical manufacturers and their different partners, we can enable all processes, digitally, which could lead to significant efficiency gains."

What are some of the challenges that exist when considering digital processes in organisations or their supply chains?

Frank: "Standardization is a big topic at the moment as everybody has their own systems. It’s imperative that respective systems communicate with each other, but standardisation could deliver additional efficiencies. The digital network created by serialization could be leveraged to foster this.

The digital network created by serialization can be leveraged to standarize and create efficiencies

Even where there is a vested interest from all parties in a supply chain, there remains some key challenges and questions to be answered such as: do they want to build interfaces with all their partners? Who is going to pay for this? Which standards will be adopted?"

Thinking digital, where do you see the industry in five years?

Frank: "In five years I think we’ll see much more collaboration between pharma, CMOs and logistics partners when it comes to planning. I also think it will become routine to exchange planning and transactional data via digital means –emails and excel sheets will be a thing of the past. We’ll also see AI being used and the advent of event driven supply chains where pre-defined business rules are being applied to some events."

Did you enjoy this article? Why not read our whitepaper on the risks to avoid in the race to serialization compliance