Future proofing the pharmaceutical industry through automation

Jon Brewin, business development manager for AutoStore, discusses increasing demands on pharmaceutical supply chains and how automation can improve lead times.

One of the largest growing areas for the supply chain industry is pharmaceutical logistics. With consumers taking a hands-on approach to their healthcare and medication being more personally prescribed, the demand for pharma products has rapidly increased since 2019. Pharmaceutical companies are now taking more of a consumer approach, for example GSK recently split the business into two distinctive sides through the launch of its consumer arm, Haleon. Once an industry driven by B2B trading, now faces the challenge of staying ahead of the curve by jumping on the pandemic induced e-commerce boom, quickly and effectively to maximise business outputs. 

Online pharmacies are scaling up stock from recognised brands in order to meet customer demand, but currently there is a lag due to this being a developing service for UK consumers. Whilst the pharmaceutical industry remains largely profitable, there is more opportunity to be had with the implementation of smart automation into its supply chains to significantly improve lead times. 

Fortunately, there are many technical applications that can support future proofing a business. Warehouse automation is one of the main drivers. A current challenge is space, with commercial property being in high demand and limited options, businesses need to think strategically how they can store and export their products without reducing margins because of costs of commercial property and wait times. We are seeing this with onshoring, normally heavily reliant on overseas shipments and limited warehouse space to store stock, by keeping more stock onshore utilising existing footprints these can be upscaled through smart storage. Technologies such as automated storage and retrieval systems for picking can increase uptime by over 99%, providing accuracy and flexibility in turn around times. These systems can also adapt to business growth, easily expanding to meet capacity requirements in tune with order fulfilment demands without compromise on location. 

E-commerce sales increased by 14% in 2020. With bricks and mortar still taking a large percentage of the market share, e-commerce is on a healthy incline and industries need to be readily equipped to adapt to this. We have seen a drive in direct-to-consumer deliveries for over the counter and prescription medicines. This is putting pressure on pharma wholesalers and smaller medical centres to adapt their existing distribution processes to meet this surge in demand for next day delivery.

Outside of e-commerce, pharmaceutical companies need to be able to cater to their existing base of manufacturers, clinics, hospitals, practices and nurseries meaning they have to be able to grow and continue to provide the same, or a better level of service. AutoStore offers a system that ensures the safety of its users and can be implemented in an optimal environment for a variety of medicines and sterilised products. With controlled environments, an automated system can house products at a range of temperatures and humidities to reduce the risk of contamination and product waste, whilst maintaining the strict standards and regulations required for the storage of healthcare products. 

Manufacturer and distributor of medical supplies, Medline Industries, was an early adopter of AutoStore systems in 2013. Due to the business growing exponentially, Medline saw the opportunity to invest in automation which would meet the businesses growth and firm its position in a competitive market. Investing in 47 robots and 28,000 bins, covering just 700 sq.m., Medline was able to overcome three challenges. Increasing item picking, decreasing dispatch times to fulfil orders, and run a successful enterprise in a short-laboured market.

What made the Medline operation particularly challenging is, besides the large customers who order in bulk, there are also thousands of customers who put in small orders. These small orders are as much of a priority to Medline as are their big orders from organisations. Medline worked on distributing goods in two ways: bulk cases - which make up 30–40% of Medline’s sales - were transported by forklift to the staging areas to be manually picked the correct quantity of items for shipping and distribution. The second part of the picking and distribution process involved the AutoStore system for individual orders - following the success of the first install Medline have since invested in several other sites as a result of the increase in uptime and efficiency. 

Medline are one of many global examples taking advantage of this natural next step for the pharmaceutical industry - companies are posed with the challenge of standing out in a highly oversaturated market, and need to address this by increasing operational efficiency through the investment of supporting systems. Automation adoption will not only better their economic growth in the long run but contribute to excellent brand awareness, driving further investment from consumers and partners alike.