Supply Chain Management

Sanofi-aventis touts its dedication to a streamlined supply chain process on their website with mention of reduced cycle times, optimized supply chains and the establishment of global sourcing. In fact, in 2007, three high-level representatives, including the Director of Long Term Demand Planning and Head of Forecasting, were featured as speakers at a conference for demand planning and supply chain excellence for pharmaceutical companies held in London. Sanofi-aventis consistentlys review the efficiency of its supply chain management as well as delivery of final goods to patients.

One example is a decision made in November of 2007 to reduce the number of wholesalers distributing their medicines in the UK. Wholesalers were reduced to three, AAH, Phoenix, and UniChem who would be offering national coverage across the UK and Northern Ireland. These wholesalers were chosen since they already distribute nearly 90% of all medicines in the UK and have many arrangements in place with one or more of the other wholesalers, which ensures a continuity of supply. Mike Isles, the supply chain director at sanofi-aventis UK said: "Pharmacists, hospitals, and dispensing doctors are important customers for sanofi-aventis and are the vital link in ensuring that we can get our medicines to patients who need them. Under this new arrangement we can maintain the service levels that our customers experience today whilst improving supply chain efficiency in the delivery of our medicines to patients."

Another example of delivery quality at sanofi-aventis was found when Sanofi Pasteur, the vaccines division of the sanofi-aventis group, presented a special award in July of this year to their delivery partner Envirotainer for going 48 consecutive months without losing a single dose. Envirotainer makes temperature controlled air cargo containers which are used by Sanofi-Pasteur to transport vaccines. Air France was also recognized as a Sanofi-Pasteur partner in this success.

Unfortunately delivery mishap occurred in July of this year when thieves in the USA stole a truck loaded with a shipment of pharmaceuticals from sanofi-aventis. Blood thinners, antihistamines, nasal sprays, and acne treatments were among the products stolen. According to figures from Freightwatch International, thefts of pharmaceuticals have rose in 2008 by a third with criminals actively targeting drug shipments. Goods that are stolen in this way tend to re-enter supply chains legitimately through parallel markets, leading detectives to say they are “stolen to order.”

According to a job profile interview conducted with sanofi-aventis’ Director of Supplies in the R&D Clinical Supply Chain, supply chain managers are divided into two groups: the project managers and the clinical studies managers. Project managers determine need among active principles, finished products, as well as packaged products for all on-going projects. Supply plans are also checked based on development plans and production activities.

Clinical studies managers are responsible for defining treatment forms that will be provided to patients through clinical tests. Quantities of treatments needed are determined as well as coordination of logistics and supply activities. There is a lot of interaction with other R&D departments in this supply-chain example. Communication is extremely important regarding the results of supply plan feasibility and ensuring project and clinical teams are both on the same page. Solutions also need to be proposed when difficulties arise, and skill sets need to be in place to choose the best option. Also, a thorough understanding of projects, studies and development, and supply plan analysis is also required.

Since we could not locate much more specific information regarding sanofi-aventis’ supply chain, information was found regarding the five key links in the pharmaceutical supply chain which we can assume sanofi-aventis follows. These five links are: internal staffing, storage and security, packaging requirements, distribution considerations, and returns and destruction.

Internal staffing refers to the people at the site of production, R&D, and more. As seen from the profile provided by sanofi-aventis above, communication by departments is a necessity showing their demand for accountability. This helps reduce internal theft, loss of quality, and more. Organizations are obligated to maintain current lists of individuals with access to where products are stored

Storage and security are huge concerns for all pharmaceutical companies. Drugs are classified based on abuse potential with the highest being in C-I and C-II. Tylenol, anti-anxiety medications, and non-narcotics are classified in C-III, C-IV, and C-V categories. Security methods are determined based on these classifications with the highest requiring storage in vaults with 24 hour alarm systems. C-III, C-IV, and C-V are stored in bolted cages, typically located in warehouses. A minimum of two observers need to be present for all handling activities and all records are subject to audit by the DEA who makes unscheduled visits and inspections. Since sanofi-aventis manufactures many kinds of drugs, it is likely that they follow these security procedures for their products. However, in the example of theft given above, sanofi-aventis may need to up their security in delivery procedures if they are losing shipments to truck thieves.

Packaging requirements state that drugs are packaged in ways preventing tampering and theft. Packaging is defined as a full-service pharmaceutical contract packager. They are an FDA registered facility, licensed with the DEA to package C-III, C-IV, and C-V drugs. Packaging is done at this facility in the form of bottling, blister packaging, promotional packaging, and many more services.

Distribution considerations are also subject to federal laws. Distributors are responsible for ensuring that scheduled drugs are shipped only to individuals and sites that bear valid license to receive these materials. The DEA maintains a central database of these licensees.

Returns and destruction are a very critical point in drug handling. In the case of a clinical trial ending, all unused supplies of drugs must be returned for reconciliation. The reconciliation process requires that there be an accounting for every tablet for DEA investigations will be started.

Some new ideas we recommend is for sanofi-aventis to introduce more logistics security into their downstream flow of products especially since medication theft presents a serious risk to sanofi-aventis (among other pharmaceutical companies). This can be done by enforcing their distributors to be equipped with GPS tracking devices on each trailer giving them the ability to track the delivery in real time. In the event a truck falls outside its destination route, it would trigger an alert and contact with the driver would be made to see if the truck has been stolen and the reason why it deviated from its route. Having the right technology in place would allow for sanofi-aventis to better track their shipments and quickly identify and recover lost/stolen shipments.