Route Optimization for the Pharmaceutical Industry: Countering last-mile delivery problems

Pharmaceutical organizations spend on average 6% of their revenue on logistics- World Health Organization and Parenteral Drug Association statistics (WHO and PDA). 

The pharmaceutical industry has been successful in creating life-saving drugs through advanced research and clinical trials.

Transportation and storage determine the major success of pharma products globally. A small mistake in logistics can cost your attempts in delivering the products to the right customers.

Last mile delivery services are the most important step in transportation of pharma products. A company handling such last-mile pharma deliveries has a multitude of complexities to counter like:

• Cold-chain pharma products- Pharma supplies that require refrigeration
• Non-refrigerated pharma supplies 
• Driver shortage
• Geographically varying distribution safety guidelines
• Truck capacity constraints
• Special Storage requirements 
• Emergency security measures 
• Lack of visibility in logistics
• Temperature variations 
• Difficulty to cater to sudden on-demand deliveries
• Traffic constraints, and so on.

Delivering pharma supplies to the right customer at the right time requires a route optimization software. Route optimization solutions can enhance the productivity of your pharma supply chain. Find out how route optimization solutions benefit the pharmaceutical industry in last-mile delivery. 

Adapting to flexible delivery schedules 

Customers appreciate flexibility if you honor their top-preference time window. They order pharma supplies for future use or emergency use. The approach to setting routes determines on-time deliveries. The main reason for the lack of flexibility is the traditional approach in planning routes.

Imagine that you are delivering medicines and equipment to a nursing home. The nursing home may require critical medicines or equipment urgently. 

It is essential that you deliver pharma supplies to such nursing homes on different and flexible time windows, whether it is negotiable or emergency. Even a small delay in delivery creates a lack of trust. Hence, it is crucial to be prepared with routes for on-demand and unpredictable delivery schedules.

How route optimization helps with flexible delivery schedules?

Manage safety & security threats with higher visibility 

“Logistics issues solely contribute to 30% of the discarded pharmaceuticals.”- Cargosense, Cold chain loss in pharmaceuticals. 

Visibility is essential whether it is a pharmaceutical 3PL operator or a pharma company. There is a huge cost involved in pharma logistics like refrigerated trucks, driver awareness, storage, temperature control measures, etc. Technology is the only option for pharma companies to get end-to-end visibility and reduce last-mile delivery costs. 

End-to-end technology-powered visibility is the need of the hour for the pharmaceutical industry. In pharmaceutical logistics,  last-mile delivery agents deal with the temperature-sensitive medicines. Even small issues like delivery delays can lead to discarding of the pharma supplies. 

How route optimization improves visibility in pharma logistics?

Dynamic Route optimization provides pharma companies a real-time visibility into the location of their vehicles. Also, it offers insights on trucks that are idling. It provides greater control over fleet operations and management.

Reduce wasteful transportation costs eaten up by last-mile storage

Nearly 80% of drugs require temperature-controlled transportation.- Berlinger, Temperature monitoring company.

90% of all vaccines demand a temperature-controlled supply chain- World Health Organization.

When it comes to pharma transportation, the last-mile delivery agents have a huge responsibility. They should follow the Good Distribution Practice (GDP) guidelines for delivering the pharma products.

The costs involved in transportation are huge in the pharmaceutical industry. The storage settings for refrigerated products differ from non-refrigerated products. Compared to normal goods like books, electronics, fashion, etc, pharma products require additional care in managing temperature till they reach the customer’s doorstep.

To transport pharma products, one requires trucks with Controlled Room Temperature (CRT), insulated containers, refrigerants, thermal blanketing, and temperature monitoring electronics.

Even after all the attention and care, there may be some damage to pharma goods. You need to analyze that damage. In such a case too, there is a labor cost to analyze the root cause of damage in pharma transportation. 

The average labor cost to analyze the root cause of damaged goods is between $3000 to $10000. – WTO and PDA statistics. 

With storage safety regulations and sudden on-demand requests, you have to travel quickly. A small delay in delivery can affect the storage settings and quality of pharma supplies. You can travel quickly only by driving the shortest and cost-efficient route. 

Route optimization software provides the shortest and the most cost-efficient route to reach your customers on time. Even if there are sudden on-demand deliveries, it auto-adjusts the delivery routes quickly and lets you deliver the supplies safely. Its increased visibility options reduce transportation cost without delaying the delivery of pharma supplies. 

Check Out: The Definitive Guide to Route Optimization

Even Workload distribution

The pharmaceutical industry faces workload issues in logistics. Drivers in the pharma delivery process should understand specific storage and transport requirements to deliver pharma products securely. 

There is a shortage of experienced delivery staff in the pharma industry. Pharmaceutical industry requires a specialized delivery skill in driving and managing the medicine supplies. Only drivers who are experienced in pharmaceutical last-mile delivery, can deal with the implications arising during the delivery process.

Mostly, a limited number of drivers have to fulfil unlimited delivery requests. Apart from this driver shortage, even the capacity constraints of a truck determines the workload distribution.

When there are multiple complexities like varying GDP guidelines, driver shortage, truck capacity, on-demand deliveries, one cannot manage the fleet manually. Hiring more planning staff makes logistic operations costlier. Only technology can make the last-mile process economical and effortless in the pharmaceutical industry. 

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How route optimization ensures even workload distribution?

Route optimization comes in handy as it automatically assigns work. It takes into consideration driver shortage, truck capacity, traffic, temperature, risk zones and provides an optimized route. With available resources, it allocates the pharma delivery schedules that do not involve any unnecessary costs and manual interference. 

Conclusion 

The pharmaceutical industry is honing its strengths in transportation and distribution. Technology like route optimization helps in balancing their usual and urgent demand for deliveries. Also, it saves their labor costs, fuel costs, visibility costs, thereby maintaining the quality of pharma products scheduled for the last-mile delivery. 

Locus’ Route planning software (Dispatcher) is effective for delivery agents in the pharma industry. It helps logistics managers to effortlessly assign the routes and delivery schedules for the pharma products. It makes your pharma last-mile operations economical. 

Locus also provides FieldIQ, a solution for pharma field sales professionals, who undertake sales transactions with retail outlets. It helps travelling pharma field sales professionals to chart their sales beats or Permanent Journey plan (PJP), and engage maximum clients in a shorter travel time. 

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