I recently reviewed a white paper written by several authors from RX-360, an international pharmaceutical supply chain consortium. The paper is entitled “Cargo Theft in the Pharmaceutical Industry: What Does it Really Cost?
The basic thesis of the paper is that supply chains in the drug industry are very global, complex, outsourced and decentralized. Because of this, it’s very difficult to ascertain the true cost of supply chain security failures. As a downstream result of this complexity, the true costs of inadequate pharmaceutical supply chain security are not fully appreciated and thus the true return on security investments is grossly underestimated.
The paper details the complete list of costs which are often not fully considered when examining security failures in the pharmaceutical supply chain as well as their effect on the return on security investments. A list of those costs – some obvious and easily quantifiable – and some not:
Failed Pharmaceutical Supply Chain Security Cost Impacts
- Replacement Costs
- Regulatory Obligations
- Investigatory Costs
- Insurance Costs impact
- Post-incident costs such as patient impact, legal costs, limitations on supplier liability and costs for managing recovered product
- Other costs factors such as reputation/bad media attention and the effect on investors and the company’s stock price
This paper does a great job of pointing out the various costs — again, many of them not obvious — that need to be considered to compute the true cost of cargo theft, as well as the return on security investment associated with preventing it. The paper also mentions a simple tool the authors have available to assist in computing all of the disparate costs into a sum total.
What’s important from OpticalLock’s perspective is how critical preventing cargo theft is to the pharmaceutical industry and more generally the importance of optimizing pharmaceutical supply chain security. Pharmaceuticals are very high value goods and it therefore makes sense to invest heavily in security measures to prevent supply chain losses. This makes the pharmaceutical supply chain an ideal market fit for OpticalLock products. The OpticalLock iLock provides the highest level of supply chain security available in a single device. Our products are notable for:
- Patented Fiber Optic tamper-evidence technology (far exceeding the capability of a common security seal)
- Versatile padlock form factor for use in many different pharmaceutical supply chain security applications
- On-board GPS tracking technology for precise location data on your precious cargo at all times
- Multiple on-board sensor types to uncover any tampering attempts as they occur
- Flexible communications options (GSM/GPRS Cell, WiFi and Bluetooth) for real-time alerting and data transfer
You can read the complete white paper on the overall costs of cargo theft in the pharmaceutical supply chain at Pharmaceutical Cargo Theft Costs White Paper.
Contact us to to discuss how OpticalLock products greatly enhance your pharmaceutical supply chain security today!