By Stephen McIndoe -VP of Be4ward and Grant Courtney – Principle Consultant at Be4ward
When launching a new brand or product range the development of a Product Packaging and Portfolio Strategy has always been important, however serialisation presents further considerations, which must be taken into account when defining a robust strategy.
One such example where portfolio design is impacted by serialisation, relates to the EU FMD. We know that currently under Article 22 of the Delegated Regulation, products which are intended to be distributed outside of the European Union (EU) need to be verified and decommissioned, therefore the sharing of product between EU and non-EU countries introduces additional processes into the supply chain.
The need to understand the relative value of reduced SKU complexity verses the need to operate additional decommissioning steps within your supply chain is just one of the factors which must be considered in this context. A leaner portfolio with less SKUs will improve production line OEE (Overall Equipment Effectiveness), however in this example it will decrease the efficiencies in the supply chain processes further downstream. Without operating aggregation of unit packs to logistic items, decommissioning relies on the unpacking, scanning, decommissioning and repacking of each individual pack. This is a labour-intensive process and can also be error-prone depending on the volumes and decommissioning solutions in place. It calls into question whether the OEE gains are outweighed by the additional cost and lead-times added into the supply chain.
In addition to this issue of supply chain complexity, many companies are now seriously considering reducing the amount of product which is shared between the EU and international markets due to the potential risks posed by this sharing. Illegal parallel trade and falsification of products can be made easier where the pack is already common across regions. Currently, ever-increasing numbers of countries are introducing serialisation requirements, therefore moving product which is serialised for one country or region into another, presents further challenges and risks.
However, whilst serialisation can present these issues which need to be factored into portfolio design, it can also offer benefits which have the potential to reduce complexity. Where regulators and legislation have allowed the use of Global Standards, some of the labelling and product coding requirements have been harmonised, removing the barriers to sharing packs and therefore reducing portfolio complexity. Countries which previously needed country-specific barcodes are now allowing the use of product codes and barcode formats which comply with global interoperable standards. This opens the opportunity to share packs between countries which could not previously do so. This is good news for manufacturers, especially where product volumes are low and consolidation of demand into fewer SKUs will increase flexibility of supply and ultimately make products available to more patients, thereby increasing sales.
The rules around Global Standards can be complex and the transition from legacy coding is not without its challenges, consideration must always be given to the users of the pack and the barcodes contained on them. It may be necessary to maintain existing coding on the packaging whilst stakeholders transition their systems and processes.
The principles which have traditionally been used to develop a Product Packaging and Portfolio Strategy clearly need to change to factor in the benefits and risks associated with the disruption serialisation brings.
If you require help, advice or assistance with developing a Product Packaging and Portfolio Strategy, understanding the impacts serialisation has on these processes, or any other aspect of your company’s serialisation, packaging or labelling strategy, please don’t hesitate to contact us at Stephen.McIndoe@be4ward.com or Grant.Courtney@be4ward.com
If you would simply like to request a copy of any of our booklets, please get in touch.
Be4ward provides specialist consulting services to the pharmaceutical and other highly regulated industries. We deliver value to our clients through a combination of deep subject matter expertise and excellent consulting skills. Whilst we have a thorough understanding of the supply base in our areas of focus, we pride ourselves on providing entirely independent advice to our clients.
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