Global trade has opened up the world in new and exciting ways. Technological advancements have shortened the distance between countries, allowing companies to grow and develop their operations in new markets. However, these opportunities for expansion come at a caveat.
Management of a supply chain at a global level brings new challenges for companies. Likewise, as technology develops, so do the rules and regulations meant to keep the global marketplace safe for all consumers. This is especially true for the pharmaceutical industry, where proper handling of products is exceptionally important.
What is product serialization?
Product serialization is an effective way of keeping track of products along the supply chain by assigning them a unique code of identification. In the pharmaceutical industry, serialization has become indispensable due to the sensitive nature of prescription drugs and other healthcare products.
10 benefits of pharma serialization
1. Track individual products along the supply chain
Supply chain visibility is one of the major challenges faced by businesses today. Some methods of tracking products involve handling identification in batches. Lot tracking allows companies to monitor their products in bulk but doesn’t allow for the accurate detection of individual products.
By serializing their products, pharmaceutical companies can take their identification and tracking efforts one step further. Since every product has a unique serialization code, companies have a clear understanding of where a product is located from the moment it leaves manufacturing until it reaches the hands of customers.
2. Avoid diversions
As the primary vendor of pharma products, a pharmaceutical company has the right to know and decide who is selling its stock. Nonetheless, supply chain security can be compromised by product diversions. A product diversion occurs when unauthorized vendors take hold of shipments and start selling products illicitly.
Some methods of product diversion see malefactors try to get products from a manufacturer wholesaler and into store shelves through unauthorized means. Other methods are based on selling the merchandise online, using websites such as Amazon and eBay as a medium.
Pharmaceutical manufacturers can curb attempts at product diversion if they implement pharma serialization. By serializing their products, companies can see where they are being transported to at all times, preventing third parties from taking hold of stock through illicit means.
3. Promote brand image and consumer loyalty
Product serialization can improve brand loyalty and marketing efforts for pharmaceutical companies. For instance, implementing unique identification codes allows customers to participate in loyalty programs by scanning or sharing their products’ codes with the company. Improving customer loyalty has the potential to increase customer engagement and retention.
Not only do pharmaceutical companies benefit from knowing their products arrived safely at their intended locations, but it also gives them the chance to acquire data from their customer base, such as their contact information. Brands can provide consumers who scan a serialization code with valuable information regarding the benefits of their products and other important marketing messages.
4. Efficient product recalls
Sometimes a product recall is necessary. If that were the case, then it is extremely important for a business to handle the recall process as swiftly as possible. Mishandling of product recalls can have devastating effects on a company’s image and reputation, and therefore severely harm sales.
Serialization benefits product recall efforts by letting pharmaceutical companies know where all their merchandise is located. If a brand knows where every single item is along the distribution lines, then it can rapidly halt transportation and avoid any further damage.
5. Easily remove expired products
Just as product recalls are improved with serialization, so is the process of removing expired products from the pharmaceutical supply chain. Since every product is tracked, companies can know exactly where stock is located when expiration dates are due. Moreover, adopting pharma serialization guarantees every expired product is properly tracked and disposed of.
6. Fend off against counterfeit products
Drug counterfeiting should be a major concern for every pharmaceutical company. Globalization has the potential to make business processes more effective for all people, and unfortunately, that includes third parties who wish to profit through malicious methods.
A report published by the OECD on the state of counterfeit pharmaceutical products shines a light on very serious issues. It is estimated that more than 70,000 children die every year of pneumonia due to taking counterfeit medicines, and fake anti-malaria medication might be costing the lives of more than 160,000 people yearly. Revenues lost to counterfeit medicines are estimated to cost governments more than €1.5 billion in the EU alone (source).
Serialization in pharma is a crucial step towards creating strong anti-counterfeiting methods. Through the use of anti-counterfeiting technology, serialization codes can be used to guarantee a product legitimately comes from an official drug manufacturer. Since every code is unique and attached to the product, miscreant third parties can’t create fake codes to try to circumvent identification.
7. Assess market performance
If you know where a product is on the supply chain, then you can also know what is selling and what isn’t. A business benefits from data collection in many ways, including being able to access detailed assessments of consumer-brand interaction.
Product performance assessment empowers brands to make strategic choices regarding the future of their operations. Using hard facts gathered through data helps businesses support their decisions without having to worry about individual biases. Together with supply chain visibility, performance assessment allows a pharmaceutical company to gauge the success of its business.
8. Accurately estimate product demand
Another advantage of supply chain data is the ability to precisely forecast product demand. Using serialization codes, companies can have accurate information of how much product becomes available to consumers and how much is left unsold. This way, companies can devise how much stock to manufacture and ship, making strides towards a more efficient prescription drug supply chain.
For example, pharma companies working alongside contract manufacturers can ask for more cost-effective orders since they have access to data and know how much product is going to end up being sold. This data also helps companies know what amounts of raw materials need to be acquired, further improving the efficiency of the manufacturing process.
9. Automation and Data Management
Pharmaceutical product serialization is a digital process. This means that if a company implements pharma serialization, it can take advantage of the automated processes that come with digital technology. Not only will data on every single product be readily available, but the information will also be updated automatically by the system whenever a serialization code is scanned.
Furthermore, product serialization is a fundamental asset to improve a company’s data management and exchange systems. Pharmaceutical companies looking forward to implementing data management systems can integrate product serialization into the system’s workflow. This allows a company to have a constantly up-to-date database of all supply chain operations.
10. Adhere better to import/export compliance
Regulatory compliance with the rules and regulations of the countries a company is doing business in is essential to operate safely and legally. Companies that do not adhere to the law are at risk of facing legal or administrative sanctions, as well as losing the trust of their customer base.
It is important to know who will handle the shipments at the country of arrival. Failure to properly screen partners can accrue very heavy penalties, even for the smallest of exporters. Violators can face fines of millions of dollars, or end up with 20-year prison sentences.
Some markets, such as the US, prevent businesses from dealing with providers who have been restricted. Reasons an individual or organization is restricted include being involved in terrorism, drug trafficking, performing activities related to the proliferation of weapons of mass destruction, or aiding the military efforts of China, Russia, or Venezuela (source).
In order to do business in a new country, a company must make sure to properly classify its products. While some exporters use the Harmonized System (HS) or Schedule B codes for this purpose, the serialization of pharmaceutical products is a much more efficient method of handling this process.
How to implement pharma serialization
Pharmaceutical industry serialization is quickly becoming the norm. Companies looking to implement pharma serialization into their operations can trust Nubinno to provide the best services.
With extensive experience in the field of drug serialization, Nubinno’s team of experts is ready to deploy a wide range of services to satisfy any company’s serialization and compliance needs. Nubinno can provide serialization and tracking solutions regardless of business model and geographic factors. Request a consultation call and begin modernizing your supply chain operations!