Joel Wayment, Vice President of Operations, Cardinal Health Third Party Logistics
In nearly every industry across the country, trends are shifting quicker than ever before. The COVID-19 pandemic has kicked innovation and disruption into overdrive, while new attitudes toward work, travel and social issues continue to shape our modern world. Meanwhile, the strain of the pandemic has affected our global supply chain, traditional processes and even our interactions with one another.
Third party logistics (3PL) have evolved quickly over the last two years, and the year ahead promises continued change. Perhaps more affected by supply chain issues than most, 3PL service providers need to maintain a high level of customer satisfaction, focusing on responsiveness, accuracy and delivery while juggling innovations and disruptions across the industry.
Over two years of unprecedented supply chain challenges, rapidly shifting expectations and other changes, those in the pharmaceutical logistics space have been on the front lines working to get critical medication to patients. In this area, there is no room for slowdowns or unsatisfied customers. Lives are on the line. Based on my own experience and the lessons we’ve learned in the last two years, here are just a few trends pharma logistics industry leaders should expect in 2022:
Continued Innovation and Disruption
The first and most important logistics trend to identify and accept is the idea that innovation and disruption is coming, and you shouldn’t be caught unprepared. We are in the middle of a seismic shift in not just the world of logistics, but in almost every industry across the country. The resulting changes will continue to send ripples throughout the supply chain as industries change, paradigms shift and traditional methods become outdated. It will be critical for organizations to stay nimble, forward-thinking and willing to change.
We’ve already seen a variety of innovations in the pharmaceutical supply chain over the last two years. For instance, innovation in cold chain shipping containers is providing safeguards as we transport vulnerable medication. Some organizations are beginning to work with drone delivery, which could reshape the way we deliver to pharmacies. This kind of innovation doesn’t just improve our logistics, it comes with life-and-death importance. We’re charged with transporting things that save lives, and the critical nature of the drugs in our charge means that we need to stay at the absolute cutting edge of what’s possible.
We now understand that it is unreasonable to expect existing carriers to be able to handle the entire load of small parcel shipment, especially now that shipping is in an uptick in the world of the pandemic when so many purchases happen online.
Critical medication must get from point A to point B, and we’re finding that the supply chain is not as resilient as it needs to be. For that reason — and others — I expect to see innovation and new entrants to the supply chain to help freight and packages because of the constraints we now see. Our current climate necessitates innovation, which could lead to a major change in how we move product. Whether that change comes from automation in the form of drone delivery or other areas, organizations need to be prepared to jump on board.
For years — sometimes decades — things had been done a certain way in most industries. Now, much of that is being rebuilt from the ground up. So how can your organization adapt to different styles and ways of working? In the same way that we’re all adjusting to remote work and that new lifestyle, we should be adapting to a less predictable world of logistics. This makes preparation even more crucial than ever. Get out of the habit of assuming things will flow smoothly and challenge yourselves with dry runs and practice drills. When an actual problem arises, you’ll be better prepared.
An Increased Reliance on AI
Thanks largely to the pandemic and its fallout, the United States is facing a well-documented labor shortage and an unprecedented shift in the way we hire, recruit and retain talent. While many industries and organizations are understandably and necessarily changing their hiring policies and methods, we are also at a major inflection point for the use of artificial or augmented intelligence in the workplace. In fact, the move toward increased reliance on AI and automation is already clear in many areas.
We’re already seeing AI and automation take off in other areas of our supply chain. Warehouses are implementing the technology faster than ever, which has been key to helping weather the storm of the pandemic. That industry is doing so out of necessity. Our increased reliance on shipping has led to more demand than ever, resulting in nearly 500,000 unfilled warehouse jobs. You can see how those unfilled jobs are leading to the desperate and necessary adoption of automation. Other industries should take heed and get out ahead of their own incoming needs.
Increased use of technology and AI in the supply chain isn’t just about precision and efficiency, it’s about the workforce. Our current labor shortage provides the opportunity to shift portions of our work to automation, which makes us less dependent on human capital that isn’t guaranteed to exist. The last two years have taught us just how fragile our labor force can be, particularly in times of emergency when the supply chain becomes more important than ever.
Organizations need to take a hard look at their labor force and needs to determine whether they can begin chipping away at their dependence on human capital. In the coming months, it will be crucial to identify the challenges of the current labor market, revisit how and where we allocate our recruiting efforts and understand the ways in which the nationwide shift to a work-from-home platform has created opportunity and the necessity for enhanced AI and automation.
Improved Supply Chain Transparency and Efficiency
In a big-picture way, the pandemic has revealed the importance of adopting a flexible mindset across all industries. There was a time when we operated under the assumption that processes would move smoothly when they left our hands — that is no longer the case. Organizations should constantly be prepared for things to happen that you don’t have control over, especially when it comes to supply chain issues.
As an industry, we’ve never been more aware of the weaknesses of the traditional supply chain model, and real-time visibility is key to avoiding unexpected logistical challenges when shipping life-saving pharmaceuticals. To do our best work, we should adjust our own workflow to fit with what makes the most sense for our supply chain downstream.
While that innovation takes hold, we’re also seeing shifts in how we ship critical products to improve efficiency. Some specialty pharmaceuticals are only validated for a particular temperature for 36 or 48 hours, so what happens when supply chain difficulties lead to those products needing 72 hours for transport? If we can continue to improve the containers we use for shipping, we can work to provide greater stability for longer periods of time and mitigate some of the shipping issues that can lead to waste.
As we begin 2022, it’s important for organizations to realize that the supply chain is not as resilient as we once thought. If you’re not in a position to make a quick pivot and adapt, you’re going to suffer.
Telesolutions Aren’t Going Away
One of the clearest and most important trends in our industry has been the rise of telesolutions over the last two years. The pandemic challenged how companies engage with physicians, but there was already a movement among pharmaceutical sales representatives who were struggling to find availability to meet with a physician in person. When COVID hit, it forced conversations about telesolutions, providing an opportunity to educate about these products and how they can benefit all parties, but especially patients.
While COVID continues to make in-person meetings challenging, I expect that digital sampling will continue to grow as a movement to help pharmaceutical reps educate providers about products and how they benefit patients.
And even after COVID begins to subside — whenever that may be — I don’t expect these trends to reverse themselves. The pandemic has now lasted two years, and people have adapted to a new way of life. Carriers will still be dealing with high volumes; companies will still be pursuing online alternatives and full recovery from COVID and its effects will not be as quick and seamless as some expect. From a logistics perspective, companies and providers that were dependent on brick-and-mortar solutions are still in the midst of transitioning to an online platform. They’re not going to immediately halt progress and turn around just because COVID has subsided.
Meanwhile, the workforce is not returning as quickly as many expected. As staffing issues continue to plague the industry, the efficiency and ease of telesolutions will be key. Organizations that can continue to create operational efficiencies through telesolutions will be at an advantage, especially those that adopt the technology earlier and in a more proactive way.
I expect online ordering platforms for both clients and customers to be an important part of the market. Self-service solutions are in more demand than ever before, and many organizations are just finalizing and deploying their own solutions for online inventory and auto-release processes that will lead to greater efficiency and happier customers.
About the Author
Joel Wayment is the Vice President of Operations at Cardinal Health Third Party Logistics. The organization is focused on offering business solutions for those who treat and serve patients who suffer from complex conditions that require specialty treatments, such as cancer, rheumatoid arthritis and kidney failure. In 2018, he was selected as one of the PharmaVOICE 100, recognizing the 100 most inspiring people in the life-sciences industry.
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