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Serialisation is coming and if businesses ignore it they could be in for a big shock.
Serialisation is starting to make its way to the top of the agenda of many businesses. Why? Because governments are starting to implement deadline requirements for the integration of serialisation solutions into production lines.
What, many of you may ask, is serialisation? It describes the process of the unique identification of primary and secondary packaging. Globally, unique codes are generated and physically assigned to products via two-dimensional bar-codes or RFID tags. Effectively, serialisation works to secure the legitimacy of supply chains by providing authentication platforms, identifying counterfeit products, logistic track and trace from initial production to end-users as well as the automated checking of expiration dates. It has been a topic of particular interest to the pharmaceutical industry.
It was a topic that was discussed at length at CPhI Worldwide 2016 in Fira de Barcelona, where attendees were presented with four ways in which they could make serialisation work for them.
Pharmaceutical companies have a particular ‘ecosystem’ in which they operate with suppliers and contract manufacturers (CMOs). As such, suppliers must ensure that partnered CMO’s have the resources, capacity, and industry expertise necessary to serialise products.
Suppliers must understand the importance of assessing their ecosystem by looking at what CMO’s as well as contract packaging organisations (CPOs) are doing in the preparation stages of implementing serialisation into their supply chains. Many are obtaining this information through questionnaires as this allows suppliers to assess various options available to them.
It’s no secret that serialisation can add costs. How can they be avoided? There are number of initiatives out there that can help. For example, TraceLink has a network of CMO’s and CPOs, and facilitates links with customers.
Serialisation does also require a significant IT infrastructure to support it. Transactions are associated to serial numbers and if you have 10 million serial numbers, the number of transactions will be exponential in terms of the volume of data that will be generate. Therefore, companies have to consider how that information will be stored and managed. In doing so, it is crucial to build a team with the relevant expertise to manage that ever-growing volume of data.
Different countries have different deadlines, and contrasting methods for managing compliance. But, it is estimated that by 2019, at least 75% of global products will be subject to serialisation requirements in terms of submitting, reporting, and receiving files from regulatory authorities. Companies who are successful here will be those who realise first that such requirements are not a one-way-street, but instead are part of a dialogue between companies and regulators to understand current procedures and areas for improvement.
In terms of master data, CPOs must ensure that they can rely on providers to bring, collate and submit all necessary data to the designated authorities when requested.
It is procurement’s job to raise this issue at management and executive stakeholder level and make sure they are aware of what is at stake. One of the reasons why certain industries have been slow to adapt to the changes is because management often ignores such proposals, arguing that processes such as serialisation are a cost. However, when faced with this issue procurement must step up by posing the question ‘what is the cost of today versus the risk of tomorrow if you miss the deadline?’
This article is a piece of independent writing by a member of Procurement Leaders’ content team.