Pharmaceutical logistics companies are increasingly using advanced digital technologies such as blockchain and the internet of things (IoT) to enhance operational efficiency. Blockchain is a digitized ledger that maintains, records and authenticates data and transactions. IoT is a network of physical devices that communicate over the internet. IoT technology can potentially help pharmaceutical logistics companies to mitigate lead time, reduce costs and track cargo movement. Blockchain technology can significantly improve the efficiency and reliability of distribution chains. It can also achieve cost savings by powering leaner, more automated and error-free processes, thus adding visibility and predictability to logistics operations. For example, DHL and Accenture have created a blockchain-based serialization prototype with nodes in six geographies to track pharmaceuticals across the distribution chain. Maersk, a Denmark-based container shipping company, is using refrigerated containers integrated with IoT technology to ensure visibility in pharmaceutical logistics. SkyCell, a Swiss technology company, offers blockchain and IoT-enabled refrigerated air freight containers for biopharmaceuticals.
The global pharmaceutical drugs and biologics logistics market is expected to grow from $87.4 billion in 2019 to $95.9 billion in 2021 at an annual growth rate of around 4.7%. Advances in digital technologies such as blockchain are expected to drive the biopharmaceutical logistics market. Blockchain technology can significantly improve the efficiency and reliability of distribution chains, thus making their service more attractive to clients.
According to a survey conducted by Logistics Trends & Insights LLC and MD Logistics in September 2016, 79% of respondents indicated the importance of technology in cold chain logistics. Respondents indicated the use of technologies for general tracking, product security, product ingredients, transparency of the product, and atmosphere and temperature monitoring including GPS and time alarms for refrigerants.
Robotics, automation, and augmented reality (AR) are other technologies that have significant potential in pharmaceutical warehousing. For instance, DHL is investing in robotics for packing shipments and managing warehouse inventories. The company is also experimenting with using augmented reality to improve pick-and-pack operations. Pharmaceutical logistics companies are using automated storage and retrieval systems for efficient management of pharmaceuticals in warehouses. Automated storage and retrieval system (AS/RS) is an integrated structure of racks and cranes that enables automatic vertical and horizontal storage and retrieval of items in a warehouse. AS/RS gives greater visibility and zero error picking, thus increasing the speed and accuracy of movement of pharmaceuticals in and out of the warehouse. It also helps in effective utilization of space and reduces energy consumption and labor costs by more than 50%. AS/RS are especially required by temperature-controlled warehouses, where temperatures decrease up to -0.5o F. Companies such as Daifuku, Dematic and Muratec provide AS/RS for pharmaceutical warehousing.