The Role of Robust Logistics in Pharmaceutical Supply Chains

As older adults become the fastest-growing demographic in Europe, the increasing demand for healthcare is reshaping the pharmaceutical landscape, emphasizing the need for robust and agile logistics to keep pace. This rising demand is causing the European pharmaceutical market’s expansion, projected to grow at an annual growth rate (CAGR) of 5% till 2030, driven by innovative treatments, including biologics and personalized medicine, which require even more stringent transport conditions . But as timing becomes crucial, can road transport meet the growing demand for timely availability in today’s volatile and constantly being disrupted logistics sector? And what about decarbonizing those supply chains?

The importance of compliance

With rising pharmaceutical demand in Europe, efficient medicine transport is critical. Road freight handles 61% of total goods moved within the EU , making it vital to enhance road logistics for the pharmaceutical sector specifically. As pharmaceuticals increasingly include highly sensitive products such as vaccines, biologics and gene therapies, strict temperature control is essential. Implemented in 2003, updated in 2017 Good Distribution Practices (GDP) defines the standards of transporting the pharmaceutical products, which is crucial and required to comply with by logistics companies.

Ensuring Integrity Under Extreme Pressure

Pharmaceutical companies face significant challenges when transporting their sensitive products, particularly given the stringent requirements for temperature control, regulatory compliance, and visibility across the entire supply chain. Also worth mentioning are the efforts to decarbonize Europe. As pharmaceutical companies are focusing heavily on decarbonizing their operations, they are looking for transport solutions that are net-zero. Intermodal solutions, Battery-Electric Vehicles (BEV), and alternative fuels such as HVO are the first solutions and transport modes that are already operating within pharma supply chains. A combination of those three solutions and future innovations can bring tangible results in reducing emissions. For example, combining HVO fuel and/or BEV with intermodal solutions gives the opportunity to significantly reduce emissions E2E. And with digital tools the results can be easily reported and provided to the company, to present them as scope 3 emissions reduction.

The need and opportunity of digital support

Yet sustainable solutions are not the only need of pharmaceutical supply chains. Modern digital tools and new logistics equipment combined with 24 hours dedicated monitoring make it easier to track shipments in real time, control temperature, and prevent delays. Using advanced tracking and monitoring systems gives pharmaceutical companies the visibility and control they require to comply and manage their supply chains effectively, with detailed information on:

• Temperature stability: Ensuring that medicaments, including highly sensitive biologics, are kept within their required temperature ranges at all times to maintain efficacy and safety.
• Real-time visibility: Tracking shipments throughout the journey, ensuring that no delays or disruptions jeopardize the products. Immediate alerts can help address potential issues such as temperature deviations or route delays.
• Route optimization: Automatically rerouting trucks to avoid delays caused by unpredicted events like blockages, regional law implementations, or sudden weather changes.
For example, when a critical shipment of vaccines faces potential delays due to border restrictions between France and Germany, the carriers are automatically alerted, and digital tools – often utilizing robotics process automation or artificial intelligence – quickly define a new route, updating the estimated time of arrival and providing relevant and necessary information to all stakeholders.

“In an industry where timing, compliance, and product integrity can save lives, choosing the right logistics partner is no longer just about operational efficiency – it’s about trust, reliability, and safeguarding global health. The experiences we gained throughout years reminded us that every link and element in the supply chain matters, and pharmaceutical companies are looking for logistics partners who understand the high stakes. The future of healthcare depends on it,” summarized Mark Mulder, Chief Commercial Office at Girteka.

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Warehouse Automation Quadruples Output

Third party logistics operator DSV has implemented a warehouse automation solution at its distribution centre in the Netherlands that has increased output by 300 per cent without needing additional personnel.

The omnichannel fulfilment solution from KNAPP has transformed the company’s existing 60,000 m² warehouse in Venlo, enabling DSV to process fashion and sports orders rapidly and efficiently for a well-known sports goods manufacturer.

Same-day and next-day delivery

On an average day, around 10,000 orders and 100,000 items are shipped to retail, wholesale and online customers across Europe from the facility with same-day and next-day service levels. The solution provides a high degree of flexibility to handle the peaks typical of the fashion sector, while also ensuring sustainability through an automated carton-closing system to optimise shipping volumes.

Goods entering the warehouse are repacked in containers or cartons at the 14 decanting stations, with some being stored on pallets in high-bay racking. The heart of the system at Venlo is KNAPP’s Evo Shuttle, a small parts warehouse with over 257,000 locations for plastic containers and cartons, which are stored triple deep in the 19-level store. A total of 361 shuttles operate within the system, retrieving items on demand and conveying them to the picking stations.

Volume-optimised shipping

Fulfilment is carried out at one of 16 goods-to-person workstations from KNAPP’s Pick-it-Easy series, where orders are assembled directly into shipping cartons supplied by an automatic carton erector. There are a further 28 workstations for value-added services and manual packing. After order assembly and before being conveyed to the 14 shipping ramps, the height of each shipping carton is adjusted to suit its contents and a shipping label is applied in a process that is completely automated.

Warehouse Automation

In addition to storage, retrieval and picking, the Evo Shuttle store takes care of order buffering and sequencing of completed orders. The whole solution is controlled by KNAPP’s KiSoft software, which interfaces with DSV’s inventory control system to ensure that all processes run smoothly and without errors. This software combination takes care of the entire flow of goods in real time, inventory management, all the product master data, order release, quality checking and document insertion. DSV also chose to have a resident service contract with KNAPP, so that engineers are permanently on site to ensure maximum system uptime. See the solution in action here.

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Digital Twin Logistics Market Projected to Boom

The digital twin in logistics market is set to grow from its current market value of more than $1.2 Billion to over $9.4 Billion by 2032′ as reported in the latest study by Global Market Insights, Inc.
By creating a virtual replica of their physical logistics network, companies can monitor and analyze every facet of their operations, from warehouse management to route optimization, significantly boosting operational efficiency through real-time insights.

End-users are increasingly integrating digital twins with artificial intelligence (AI) and machine learning (ML) technologies. This fusion amplifies the predictive prowess of digital twins, leading to sharper forecasting and optimization. AI and ML algorithms sift through vast data from digital twins, discerning patterns and making instantaneous decisions. For example, in route optimization, AI-enhanced digital twins can modify delivery routes in real-time, factoring in traffic, weather, and historical data.

The market is segmented by component into software and services. In 2023, the software segment accounted for roughly $893 million. The capabilities of digital twin software have been significantly bolstered by the integration of Internet of Things (IoT) devices and sensors. These enhancements facilitate real-time data gathering from assets, vehicles, and infrastructure within the logistics network. Such detailed data is vital for crafting precise digital replicas of tangible systems. For instance, in March 2024, DHL harnessed digital twin technology to craft virtual models of its warehouses.

The market categorizes the digital twin in logistics by deployment model into cloud-based and on-premises. The cloud-based segment is projected to surpass $7.5 billion by 2032. These cloud solutions offer unparalleled scalability, allowing logistics firms to modulate computing resources in response to demand shifts. During peak times or unforeseen surges, businesses can swiftly upscale their infrastructure without hefty capital outlays. This adaptability not only ensures peak performance but also bolsters efficiency and customer satisfaction.

In 2023, North America led the digital twin in logistics market, capturing about 31% of the revenue share. Spearheaded by the U.S., this region stands at the vanguard of technological advancements. The swift evolution and adoption of IoT, AI, and big data analytics are pivotal in driving the uptake of digital twins in logistics. Companies in this region harness these technologies to boost operational efficiency, refine decision-making, and secure a competitive edge.

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