The Indianapolis Airport Authority in league with the Indiana Health Industry Forum must be exhausted after concluding their inaugural Midwest Healthcare Supply Chain Conference on May 13th. The well orchestrated event was by any and all measures, a huge success among the 136 delegates in attendance - not bad in this economy.

The purpose of the conference was to unite the Midwest’s experts in healthcare logistics, distribution and manufacturing and to examine industry trends, challenges and best practices five to ten years down the supply chain road.

The targeted audience were executives throughout the healthcare value chain with the goal to showcase the advantages of the Indianapolis area and more specifically, the "New and Improved" Indianapolis International Airport (IND), as a viable alternative for centralizing Midwest distribution of time- and temperature-sensitive healthcare products, and to nurture an understanding throughout the distribution chain of Indiana’s long range plan for providing the infrastructure necessary to accommodate the growing healthcare industry.

 The New $1.1 Billion Indianapolis International Airport

Terminal and 8th largest Cargo Facility in the US

The proceedings were well organized, well attended, and well received in what has been by-and-large an underserved market for cold-chain conferences. The unique aspect of this cold-chain event was that it focused on long range planning (LRP) and the presentations were themed on what the landscape of the healthcare supply chain might look like in 2015-2020.

The event was low cost (about $350), one day, and within driving distance for most Midwest attendees. About 60% of the delegates were not drug manufacturers or innovators, but 3PL and other service providers. Since the conference was held on the beautiful, spacious, and ridiculously accessible Indianapolis campus of Indiana University & Purdue University (IUPUI), there were a number of members from academia as well, both students and professors.

Presenters were not those typically associated with other cold-chain events. The keynote address was delivered by Dr. Yossi Sheffi, Director, MIT Engineering Systems Center for Transportation and Logistics, who highlighted potential supply chain vulnerabilities resulting from acts of God, terrorism, and political upheaval, and how and what companies must do to prepare for such eventualities, as well as site several case studies where supply chain interruption have caused companies (such as Erickson phones) to fail.

A compelling argument was made by Dr. Mahender Singh, Research Director for the MIT Supply Chain 2020 Research Project & Efficient Healthcare Delivery Project, that emphasized the future evolution of healthcare in America – moving from an acute care to largely a chronic care process as the population ages and personalized medicine and technology advance. The impact this evolution will have on the current methodologies for supply chain were surprising and clearly demonstrated. 

The following session was attended by my colleague, Susan Li, who offered these take-aways from the forward-thinking presentation, Demand Driven Supply Networks in Healthcare, by Hussain Mooraj, VP of Healthcare & Life Science, AMR Research -

·        In healthcare industry, traditional supply chains were designed and operated with inside-out thinking. All supply chain and operations processes—from planning, sourcing, manufacturing, and distribution—were designed without considering the needs of upstream and downstream trading partners, let alone the patient. Manufacturers have long planned their operations based on factory capacity and asset utilization.

·        Some leading companies are taking a new view: allowing customer demand to drive supply chain planning and execution. This approach – demand driven supply network, uses a system of technologies and processes to sense demand and react to it in real time, across a network of linked customers, suppliers, and employees. The financial results can be dramatic. In a recent study by AMR research, companies that excel at demand forecasting have 15% less inventory, 17% stronger order fulfillment, and 35% shorter case-to-cash cycle time than typical companies.

·        The first step in making a successful transition to demand-driven supply chain practices is to develop corporate supply-chain strategies at executive level. Establishing a sales and operational planning (S&OP) team that meets frequently to share this information can help a company integrate the planning of production, procurement, logistics and sales information. The challenge in this step is gathering accurate customer demand information in healthcare industry is very difficult.

·        The second step is to understand or create cross functional best practices that frequently review and assess production against demand. Companies must design operational and supply chain processes from the inside-out to ensure quality and compliance, and minimize the time and resources required to deliver products “right first time”.

The most interesting and entertaining presentation was the keynote luncheon address by Dr. Adam Fein, founder and president of Pembroke Consulting. 

"Dr. Howard, Dr. Fein, Dr. Howard!"

His thirty minute, no-nonsense statistics and opinions on healthcare distribution security and patient safety, poignantly illustrated the breadth, and scope of secondary channel drug distribution which often results in diversion and counterfeit. Also, how State’s Boards of Pharmacy are doing little to change the many serious flaws in the drug distribution system. Dr. Fein also blogs at Drug Channels, with views on pharmacy economics and pharmaceutical supply chain.

I participated as a panel member among experts who discussed the critical elements and practices involved in designing and operating in U.S. and global distribution channels related to meeting expected regulatory compliance within the framework of service supplier capabilities and adapting to in-country infrastructure inequities without compromising drug product quality.

Overall, it was a very satisfying and educational day. The Indianapolis Airport Authority and the Indiana Health Industry Forum are already planning on an encore conference, tentatively set for next May. Stay tuned.

At the Finish Line,

Indianapolis Motor Speedway

The International Air Transport Association (IATA) will release the 9th Edition of the Perishable Cargo Regulations in June, with the content effective July 1st, 2009.

Commonly referred to as Chapter 17, (Air Transport Logistics for Time- and Temperature-Sensitve Healthcare Products), it has undergone considerable revision and represents the airline's pro-active effort to improve handling processes for high-value, high-volume healthcare cargo, including requirements for implementation of a new handling label. More details are available in the Advanced Degree Column in the May edition of Contract Pharma.