Supply Chain Brain - March 2010

Sustainability: Why
Attention Must Be Paid

There are three basic reasons why supply chain managers should pay attention to sustainability initiatives, says Kevin Smith, president and CEO of Sustainable Supply Chain Consulting.

The first reason is because customers want it, the second is because stakeholders demand it and the third is because the government requires it. The most important reason, however, is that all these con-stituencies can be satisfied while reducing business costs and increasing profits.

Moreover, sustainability initiatives often require little additional effort, Smith says. “Most companies already have some kind of continuous improvement program in place to make their business more profitable and less costly and many of these efforts include sustainability practices,” he says.

For example, say a company has a program to reduce the
number of shipments by improving trailer utilization, he says.
By doing this they are able to ship nine trailers where before
they shipped 10. “That is a 10-percent reduction in the amount
of carbon going into the air and it also is a 10-percent reduction
in total costs, on ton-mile basis, to move product. So if you look
for things like that or for simple changes like changing to fluo-
rescent lighting for all of your DCs and warehouses, there are
significant cost savings to be had. At a time when top lines are
shrinking, being able to deliver bottom line savings is a very
compelling argument for sustainability.”
Nor do these efforts require a lot of outside consulting help,
he says. “It just requires taking a look at what you are doing.
You always can find things to do that are sustainable and that
will help your bottom line. Look at your overall business and
find things that you can do to save money and to increase prof-
its but that also have a positive effect on the environment.”

To view this video interview in its entirety, visit www.SupplyChainBrain.com.

New Trends in the
Bio-Pharma Cold Chain

Rod Derifield, chief executive officer of Envirocooler LLC, outlines some of the new ideas and technology that providers are deploying to boost efficiencies in the movement of tem-perature-controlled pharmaceuticals.

Biopharmaceutical
drugs can be extremely
temperature sensitive
and require a great
deal of care during
transportation. In addi-
tion, shippers must
comply with an ever-
increasing number of
regulations for cross-
border moves. Of all
the areas that need to
be addressed, says
Derifield, the most important is the standardization of regulatory
activity. Such a development, he says, “will help dramatically to
ensure that all products are tested and evaluated on an even keel.”
Another item on the industry’s agenda is the need for better
communications between the pharmaceutical industry and its
supply base. Consolidation of manufacturers will help, Derifield
says, adding that “many groups are trying to fill this void.”
Finally, there’s the changing nature of the supply base itself.
Many biopharmaceuticals are coming off patent, setting the stage
for a wave of innovation by suppliers. Producers must devise fresh
strategies for managing product lifecycles.

Derifield praises the industry for its efforts to reduce costs, through tighter partnerships with suppliers. At the same time, producers are working hard to meet new “green” requirements, partly through the use of less packaging materials. The challenge, he says, lies in achieving this goal while retaining enough insulation to protect sensitive products.

Derifield reviews some of the new methods for monitoring and preserving the condition of drugs in transit. Active solutions, such as those requiring batteries or plug-ins, are beginning to lose popularity because of concerns over battery life and broken connections. Materials made out of passive technology, by contrast, “seems to be the trend.” Examples include the greater use of mixed materials and vacuum panels. “There are not that many true new products or material offerings,” he says, noting instead “a fine-tuning of existing products to be more efficient.”