Agenda. What is considered as perishable? Food vs. Pharma: similarities and differences. Transportation & Infrastructure Requirements
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1 Mr. Ingo Ocklenburg Mr. Michael Vorwerk Mr. Patrick Güth Agenda What is considered as perishable? Food vs. Pharma: similarities and differences Packaging and Handling Regulatory Requirements Transportation & Infrastructure Requirements Joint Measures, Standards and Expertise 1
2 What is considered as perishable? Regulatory Changes Pharmaceutical products Fruits and vegetables Seafood and fish Meat and meat products Diary products (i.e. inter alia all kinds of milk products) Bakery goods Frozen food Ornamentals (i.e. flowers, foliage plants, seedlings, herbs, Christmas tree, ) Others (i.e. cosmetics, spices, confectionary) Perishables at British Airways World Cargo Source: IATA Perishable Cargo Regulations
3 Food vs. Pharma: Similarities & differences Similarities : Increasing number of worldwide air transport for all kinds of Regulatory perishables due to global sourcing, high customer demand and Changes expectation & vast choice of products always available Temperature sensitivity Temperature below 0 C is often a serious threat for both, pharma and fruits & vegetables Use of cooling agent for packaging include wet ice, dry ice, frozen gel packs PER IATA booking code for all perishables IATA Temperature ranges jointly used (IATA definition: AMBT, COOL, COLD, FROZ) Differences : Food vs. Pharma: Similarities & differences Foods (especially fruits) deteriorate very fast Transportation volume: small pharma shipments and large food shipments Regulatory volumes Changes Different temperature sensitivity: high at pharmaceuticals, lower at food Physical damage to foods and flowers are more visible and easier to detect Value: unit of pharmaceutical > unit of food Stricter temperature rules for pharmaceuticals. Food: the lower the temperature the longer the storage life (not under 0 C!!) Humidity is for fruits, vegetables and flowers as important as temperature. Low relative humidity lead to water loss in products and loss in sellable weight + deformation and shriveling of product Increased moisture loss also caused by lower pressure in aircraft cargo compartment (e.g. 10% lower pressure = 10% higher moisture loss) 3
4 Packaging & Handling Food Fruits and vegetables require packaging in ventilated containers (products produce moisture and water during ripening) Regulatory Changes The packaging of fruits and vegetables also should decrease the level of O 2 and increase the level of CO 2 to slow down the ripening and deterioration process (see MAP Modified Atmosphere Packaging) Most shipments with food products must contain absorbent pads to collect fluids that may escape from products Pharmaceuticals For pharmaceutical products active or passive packaging is used Sophisticated packaging solution used for pharmaceuticals often too expensive for food perishables Some very high value pharmaceutical goods are also prone to theft Regulatory Requirements Food Safety Regulations: EU: EFSA European Food Safety Regulatory Authority Changes Canada: CFIA Canadian Food Inspection Agency USA: USDA U.S. Department of Agriculture FDA Food and Drug Administration U.S. Custom Service IATA Pharmaceutical Industry Regulations: WHO World Health Organization ICH International Conference on Harmonization USA: FDA and USP EU: GDP of Medical Products for Human Use IATA PDA 4
5 Airport Storage : Transportation and Infrastructure Requirements Increasing number of perishable facilities at airport available Regulatory Changes Still lack of infrastructure in providing AMBT, COOL, COLD, FROZ at all perishable facilities Separated storage of pharmaceuticals and food often missing Source: IATA Perishable Cargo Regulations 2007 How the industry is challenging shortcomings Suppliers to develop and create a comprehensive integrated process with all parties Experts to develop standards for transport of perishables Suppliers to develop transfer of accountability Technology to enhance transparency throughout transport, proactively PDA Technical Report 39 / IATA Perishable Cargo Regulations (PCR) World Health Organisation (WHO), European Union (EU), UK s Medicines and Health Care, Products Regulatory Agency (MHRA), Food & Drug Administration (FDA), United States Department of Agriculture (USDA) 5
6 Temperature control is the key for the Pharmaindustry Scale of Significance Source: Bain & Co Quality of temperature control Validation Door-to-door concept Flexibility Track & trace Price/total cost Pick Up Time & Temperature Data are not enough! ETD MAN ETA HKG ETD HKG ETA SUB MAN to HKG CX 256/29 20:22 15:50+1 HKG to SUB CX 781/1 16:10 19:35 Tarmac Storage Condition of MAN Airport Tarmac Storage Condition of HKG Transit Airport Storage Issue Not properly calibrated or Not set to the right temperature GMT Pick Up/Airport Transfer is +15C Temp Logger is one per pallet /in a polystyrene case/outside of pallet 6
7 What to Consider Target: Protect Customer / Shipment / Patient Reduce / Minimize Risk Comply with Regulatory Requirements What to Consider CONCEPT Know your supply chain Supply chain integration End-to-end temperature monitoring Transparent & shared information, ensuring track & trace works in real time Proactive in preventing / fixing problems Harmonize systems & standards Establish immediate exception reporting ASPECT Product / Packaging / Infrastructure / Transit Climates / Stability Studies Forwarders / Airlines / Ground Handlers / Handling Facilities at Origin / Destination / Transit Monitor / Access to Correct Temperature Environments / Temperature Devices Establish Single Entity to Manage Cold Chain Issues & Problems Intervention Capabilities to Remedy Chain breaks, Re-adjust Chain swiftly / Exception Management Quality agreement SOP / Process Management Documentation / Evidence for regulators 7
8 Current Shortcomings Lack of integrated D to D management to all key partners Inconsistent standards & infrastructure across climate zones and packaging validation to accommodate globalization Uncertain transfer of accountability at each key milestone Lack of temperature monitoring and documented temperature excursions Inconsistent documentation of cargo handling through transportation Insufficient tracking & tracing for transport of temperature sensitive cargo Recommendations Develop comprehensive quality agreements Utilize technological advances to further enhance the need for full transparency Develop experts in creating supply chain excellence Overhaul the current standards to address gaps and shortcomings Develop common jurisdiction which regulates global air transport Collaborate with associations & agencies to further challenge industry standards and norms Introduce relevant training in Temperature Controlled Airfreight Handling 8
9 Pharma Specifics to consider Dangerous Goods High Price Value Product characteristics need special treatment during transportation Temperature controlled Date of expiry / Stockout Special conditions (e.g. Narcotics)! Worldwide Distribution (Land, Air, Sea) Advantages of central coordination BBS / BAG Procurement Maximized added value for Bayer Group BCS Procurement BHC Procurement Currenta Procurement Systems / Master Data Processes BMS Procurement BTS Procurement Organization, Strategy, Principles, Community Mgmt. Common principles / guidelines and Community / Synergy Management Harmonized and standardized procurement processes Utilization of common systems / harmonized master data 9
10 Example for Synergy Area collaboration BHC BMS BCS Head of Procurement TK/SG Sourcing Team Synergy Area "Air Freight" Lead Buyer BHC Sourcing Team Head & contact for suppliers Sourcing Team Member (USA) Purchaser BHC Sourcing Team Member Purchaser BMS Sourcing Team Member Purchaser BCS 10
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