Superior

Insurance Solutions

for the Medical Technology
and Life Sciences Industry.


Request a Quote

Publications: Articles

Publications
Outsourcing

 

Effective Supply Chain Management for Medical Device Shipments
by Eric Newman, VP of Loss Prevention, ProTecht Risk Solutions a division of Falvey Cargo Underwriting

Eric Newman Medical device manufacturers face a daunting challenge in today's market.  In addition to understanding stringent government regulatory requirements and FDA-mandated current Good Manufacturing Practices(cGMP) designed to ensure products are safe, pure and effective, manufacturers must also bear the burden of understanding the complexities and rigors involved in moving their sensitive products through the supply chain.

With the rapid growth of the medical technology and life sciences market, the concept of supply chain management continues to change to meet the unique challenges presented when moving sensitive medical device products.  There are a number of variable conditions that must be accounted for to ensure on-time delivery and protection of product condition and integrity from origin to destination.

While government regulations and cGMP protocols dealing with product manufacturing and packaging are cumbersome, a manufacturer can maintain complete control of the processes and protocols involved.  However, once the product is shipped from the manufacturer's facility, it may be exposed to circumstances and conditions that increase the risk of loss or damage and that are, to some extent, beyond the control of the manufacturer.

Under FDA regulations and cGMP protocols, the manufacturer not only is responsible for validating the quality of the manufacturing and packaging process, but also for ensuring and documenting that the proper level of care, custody and control is provided when moving product through the supply chain.  It is imperative that the manufacturer have a firm understanding of the complexities involved within the supply chain and be able to identify potential gaps that could adversely affect the quality or integrity of the product.

Third Party Logistics (3PL) Service Providers:

A vital element of an effective supply chain management program is the choice of 3PL transportation service providers experienced in and dedicated to the handling, tracking, storage and transportation of sensitive healthcare technology products.

Given the sensitivity of healthcare products to handling damage and delays in transit, it is important to consider the use of a "closed loop" or single-source supply chain service provider that will maintain custody of the product and minimize handling throughout the transit.  Furthermore, the use of a single-source supply chain service provider allows for tighter controls and monitoring of shipments throughout transit and to ensure adherence to required shipment handling and safety Standard Operating Procedures (SOP).

Standard Operating Procedures (SOP):

Manufacturers should develop a written supply chain management SOP that outlines the specific product handling and safety procedures required to be followed by 3PL service providers.  This SOP should be distributed to all service providers responsible for handling and transporting the product to ensure that they are not only familiar with the handling and safety requirements, but also the sensitivities and tolerances of the particular products being shipped.

The SOP should state the required carriage instructions, such as handling and stowage requirements, transportation service levels, sub-contracting limitations, routing, length of transit time, product temperature/humidity requirements, temperature/humidity excursion threshold limits, maximum amount of time product can be exposed to non-controlled environments during transit, etc.

Based on cost, need and feasibility, security requirements for specified shipping lanes or highly valuable/sensitive products should also be considered for inclusion in the SOP.

In many instances, carriers or logistics agents provide shippers with boilerplate or standardized SOP that are meant to be tailored to the particular products being shipped.  Although the carrier or logistic agent's SOP may address some of the issues noted above, a more detailed manufacturer's SOP should take precedence and hold the carrier accountable for the strict adherence to its requirements.  In addition, the manufacturer/shipper's SOP can be tied to service provider contracts to strengthen the carrier's commitment to safe and on-time delivery of the shipment from origin to destination.  This could be enforced further by adding language to a service provider contract holding them financially responsible in the event of loss/damage to product during transit, where it could be demonstrated that the shipping and handling SOP was not followed.

The manufacturer's supply chain management SOP should be reviewed with the 3PL service providers on a frequent basis and updated as necessary.

Periodic service reviews of all 3PL service providers should be conducted to ensure adherence to the established supply chain management SOP.  As part of the service provider review program, consideration should be given to establishing a report card system that measures performance against key metrics allowing the company to effectively track and manage compliance with required SOP.

Pre-Shipment Planning:

So that all in-transit risk factors are identified and properly assessed, diligent front-end mitigation efforts should be undertaken.  Those efforts include pre-shipment route planning to identify exact shipping lanes to be used, security and handling capabilities at all interchange points, road transport to and from airport of departure/arrival, anticipated climatic conditions throughout the entire transit and controlled transport and storage conditions.

Proper pre-shipment planning should also include contingency planning for maintenance of product quality and integrity in the event of unscheduled stoppages and/or delays due to government inspection and implementation of Customs Trade Partnership Against Terrorism (C-TPAT) supply chain security programs.

Shipment Tracking:

Given the varying global regulatory requirements, there is an increased likelihood that product will be delayed in transit for government inspection and/or to settle import licensing/documentation issues.  Therefore, an important element of an effective supply chain management program is tracking shipments throughout transit on a real-time basis.  Real-time shipment tracking allows for early detection of any stoppages and/or delays that occur, prompt investigation of the circumstances involved and immediate implementation of necessary corrective action to locate the product, confirm that product condition and integrity has not been compromised and arrange for through delivery to destination in a timely manner.

It is not sufficient for a manufacturer simply to track shipments from origin to destination to confirm delivery.  Rather, they should document and record the tracking process on a shipment-to-shipment basis, to be able to confirm to regulators and inspection agencies that the integrity of the product was not compromised during transit.

Packaging:

Product packaging plays a critical role in ensuring that the condition and integrity of the product is maintained.  The method of packing should be designed based on qualification studies that take the following factors into consideration:

  • Climatic conditions throughout the transit
  • Modes of conveyance
  • Transport routes (locations, contingency lanes, etc.)
  • Duration of transit
  • Duration and location of interchange points throughout the transit (including customs-clearance)
  • Product handling
  • In addition to protecting the actual device, the condition of the primary packaging should be adequately protected to avoid suspicion that the product integrity has been compromised.  Any appearance of damage, wetting and/or mishandling, even if only cosmetic in nature, could be cause for quarantine or rejection.

    Approved packaging methods should be monitored, periodically reviewed and revised as necessary in response to changes in any or all of the factors outlined above.

    Consideration should be given to consulting with independent third party vendors and experts capable of performing packaging qualification studies to ensure suitability of the packing method given the product being shipped, mode of conveyance and shipping lanes to be utilized.

    Conclusion:

    In the growing medical technology and life sciences market, it is important to take a risk-based approach in developing a sound and comprehensive supply chain management program that will ensure that product quality, integrity and identity is protected and preserved throughout the supply chain.

    Eric A. Newman is a veteran of the Marine Cargo Surveying industry, specializing in Technology and Life Sciences, for over 20 years.