Archives for July 2017

No Space for Error: Avoid These Six Reasons for Bulk Pharmaceutical Returns

By Contributing Author | 07/18/2017 | 11:27 AM

By: Larry Hotz, Marketing Manager, WDSrx – Woodfield Distribution, LLC

Companies within the pharmaceutical supply chain must consistently deliver the correct product at the right time to the proper person. Patient lives depend on the efficient collaboration between manufacturers, wholesalers, logistics service providers and dispensers.

Stakes are equally high when products are removed from sale or prevented from entering the commercial market. There is no room for error when manufacturers designate goods for the reverse distribution pipeline.



Pharmaceutical warehouses operate under strict guidelines from government and other authorities.

The pharmaceutical industry adheres to strict guidelines imposed by government and other regulatory authorities. To maintain operations, warehouses and distribution centers are regularly audited for compliance. Reverse logistics procedures and forward logistics procedures are equally stringent, with constant monitoring and reporting to assure accuracy.

According to Jason Solomon, Reverse Logistics Manager at WDSrx, a pharmaceutical logistics service provider, “Manufacturers invest heavily in bringing product to market, so when items are flagged for reverse logistics process, each step is highly scrutinized.”



Damage to products in transit must be assessed and documented before determining disposition.

There are six primary reasons manufacturers take medications out of regular distribution channels:

Outdated Product. Products that are past their expiration date cannot be sold. In 1979, the Federal Food and Drug Administration required an expiration date on all prescription and over-the-counter medicines. Expired medical products can be less effective or risky.

Certain drugs may experience a change in their chemical composition. Others are at risk of acquiring bacterial growth, which may lead to serious illness.

Expired product cannot be sold and must be destroyed to neutralize any possibility of them entering the commercial market. In the warehouse, expired product situations can be minimized with improved record-keeping to identify the cause of the problem.

R&D Product-Failed Batches. Laboratory testing of medications is regularly conducted for the entire product life cycle from formulation and development through manufacturing, and periodically after production. These tests are conducted to assure the effectiveness of the product according to label specifications.

When results indicate a failed test, the lot is isolated in the warehouse and marked for destruction.

Recalls. The Food and Drug Administration (FDA) has jurisdiction over recalls involving drugs, medical devices, blood and plasma products, vaccines, other biologics and veterinary products. Recalls are actions that remove a product from the market. They may be initiated by FDA request or order or on the manufacturer’s own initiative.

The main causes of recalls are failed specifications, sterility issues and product mislabeling.

New Federal regulations being implemented during the next six years as part of the DSCSA (Drug Supply Chain Security Act) are increasing the safety of medications by requiring detailed tracking down to each individual sales unit, which is currently not required.

Recalls in future will be less disruptive to the supply chain because the technology will make it possible to remove only affected products from shelves.

Withdrawals. The Food and Drug Administration is recognized internationally for their industry-leading practices, designed to assure the safety of drug products for Americans.

Post-market withdrawals of medications are rare and occur in cases where previously-approved products are shown to cause adverse patient reactions. Withdrawals are initiated by the FDA for voluntary action by the manufacturer or by FDA order when required.

During a ten-year period from 2001–2010, three drugs were withdrawn[1] out of 222 prescription drugs approved by the FDA during that time.

Damages. The wrapping is as important as the present in the pharmaceutical industry. Primary and secondary packaging protects medications on their journey within the supply chain. Rules vary by manufacturer, however damages to packaging may result in the affected goods being flagged for destruction.

Goods may be damaged during transit, while conveying from one location to another within the warehouse or if handled improperly. According to WDSrx Reverse Logistics Manager Jason Solomon, “Damage we can see is visually archived and noted in shipping documents before notifying the brand owner who determines how to move forward.”

In some instances, damages are not visible and result from transport mix-ups. When pharmaceutical drug products are stored with fruits and vegetables or other potential contaminants, they may be adversely affected by transfer of odors and impurities.

Although packaging is intact, the stock is accepted at the dock but does not enter active inventory. The manufacturer determines whether the goods are re-packaged for sale or consigned for destruction.

Short-Dated Product. Medications nearing their expiration date and are not yet consigned to a buyer are often marked for reverse logistics services. The process may begin anywhere from less than six months to 18 months from expiration date, depending on manufacturer requirements for the specific drug.

Warehouses that handle pharmaceuticals operate on a First-In-First-Out schedule, with products shipped according to the proximity of their expiration dates. This assures older inventory is moved first and also creates an efficient stock rotation system. Distributors normally ship product with at least six months remaining until the expiration date.

There is a second option for short-dated products in addition to destruction.

Charitable organizations collect and distribute short-dated pharmaceuticals donated by manufacturers to low income, uninsured patients. The only difference between short-dated product and the identical product in retail pharmacies is the expiration date.

The preference for medications in retail environments to have a longer timeframe before expiration is a benefit to many in the most vulnerable communities who can receive treatment. The Dispensary of Hope, a prominent charitable medication distributor, helps thousands of patients with treatment made possible by corporate donations.



Products marked for disposal are de-commissioned in the WMS and placed in a secure area.

When items are designated for reverse distribution, the warehouse technician accesses the warehouse management system to re-classify the product status from an active picking location to "non-active" status in preparation for disposition. When in "non-active" status, the system will not allocate those items for order picking.

Pharmaceutical warehouses operate according to strict regulatory requirements mandating specific temperature control, security protocols, vaults and cages for Controlled Substances, heightened cleaning and maintenance procedures and monitoring for temperature, humidity, motion and vibration.
These circumstances sometimes trigger additional steps in order to properly handle products in the reverse distribution channel.

The affected product is then collected and moved to a segregated location within the warehouse. This could be a dedicated space reserved for product disposition or an area that is clearly separated from active product aisles.

With final approval, the stock is either held for donation if it is short-dated, or enters the destruction process.



Destruction of pharmaceutical drug products requires detailed documentation to verify drugs are properly handled.

Stringent regulations are in place to monitor pharmaceutical drug products throughout the destruction process. Items for destruction are accompanied to a facility where they are incinerated. Some logistics providers utilize special recycling operations that convert waste into electric power, which may be returned to the surrounding community.

Items set for destruction at WDSrx are accompanied to a special facility run by Covanta Environmental Solutions that is authorized by the DEA to convert pharmaceutical drug products and Controlled Substances (Schedules I-V) from waste into energy. The Covanta Lake County Resource Recovery Facility functions as a power plant producing clean electric power generated from waste.

The WDSrx headquarters facility in Boca Raton, FL, recycled 378,380 pounds of pharmaceutical drug products with Covanta in 2016, creating 368 megawatt-hours of electricity able to power 33 homes for an entire year. “The pharmaceutical reverse logistics process is environmentally conscious and socially responsible. Our team and our supply chain partners, including Covanta, take our responsibilities seriously, helping maintain the integrity of the entire pharmaceutical supply chain,” asserts Solomon.

A Certificate of Destruction is issued after the product is destroyed. The procedures for destruction of Controlled Substances require an additional document, called a DEA Form 41. This form includes a witness statement to corroborate the product was destroyed according to proper procedures.

Manufacturers and other companies that handle large quantities of pharmaceutical drug products may outsource disposition to a Logistics Services Provider.

Pharmaceutical logistics services providers hold special licensing from the FDA and DEA to perform this special function. When contacted, these specialists will determine whether the product includes any Controlled Substances or hazardous materials.

When specific product details are received, arrangements are made to transport the goods directly to the logistics services provider facility. After arrival, the cargo is delivered to the reverse logistics department, where each item is carefully inventoried to verify quantities and products.

Once inventory is confirmed, the items are incinerated on site or transported to a destruction facility for final disposal, where a Certificate of Destruction and, if required, a DEA Form 222, is signed and registered.



Correct labeling on packaging helps avoid costly delays during the reverse distribution process.

Disposing of pharmaceutical drug products is a complex task involving multiple steps to conform to regulatory requirements. When circumstances call for product disposal, pay attention to three important situations in order to avoid unnecessary delay.

First, pay close attention to packaging and labeling of goods marked for destruction. Mislabeled boxes, pallets or drums will be flagged during the inventory process when every item is checked for accuracy.

Jason Solomon from WDSrx recalls one instance when drums that were labeled “Biohazard” were withheld from destruction, delaying the job even though the contents did not contain hazardous material. According to Solomon, “The drums marked as biohazardous materials were removed from the area and quarantined until the situation was resolved later in the day.”

Second, because products and their packaging are incinerated, consider using packaging materials that burn more effectively. For example, plastic or fiber drums are more easily disposed than stainless or other steel drums.

Third, maintain an accurate inventory of all products to be destroyed. Details about product description, strength, delivery form and package size are required prior to delivery and are confirmed before destruction. Diversion from procedures or incorrect inventory documentation will result in potential costly delays.


Under certain situations, pharmaceutical drug products must be removed from the commercial market or taken out of active inventory from warehouses prior to distribution. In most cases, these products are destroyed to keep them out of the supply chain.

The reverse logistics process for bulk pharmaceuticals is conducted under strict regulations to assure patient safety. Specialized procedures handled by expert technicians move goods through multiple steps until their ultimate destruction.

Manufacturers can avoid potential delays by following guidelines and contracting with a reputable logistics services provider authorized to handle, and familiar with regulations surrounding, pharmaceutical drug products.

[1] Press, Associated. "The Odds of a Drug Having a Significant Safety Issue after Winning FDA Approval Are Nearly 1 in 3, Study Finds." Los Angeles Times. N.p., 09 May 2017. Web. http://www.latimes.com/science/sciencenow/la-sci-sn-fda-drugs-safety-20170509-story.html.

For further information contact: Larry Hotz, WDSrx Marketing Manager at lhotz@wdsrx.com

Larry headshot

Larry Hotz is the Marketing Manager for WDSrx—Woodfield Distribution, LLC, a logistics services provider exclusively for the healthcare industry. WDSrx offers warehousing and fulfillment, e-commerce solutions, inbound and outbound call center, transportation management, packaging and labeling, financial services and regulatory compliant reverse logistics. Product returns and destruction are initiated online at www.wdsrx.com for efficiency and completed directly with a WDSrx technician in a few simple steps.


Innovation in the Supply Chain: Yesterday, Today, Tomorrow

By Contributing Author | 07/05/2017 | 7:00 AM

Blog abstract: Innovation for today’s supply chain leaders is not always defined by the latest gadgets and gizmos. Often, its definition lies within innovating the business model and improving supply chain processes, both of which positively impact the bottom line. And, while adopting emerging technologies plays a role within innovating the supply chain, leaders are most interested in implementing proven, reliable solutions for today, not tomorrow.

This blog post will focus on what supply chain leaders are truly seeking when looking to innovate, with supporting data pulled from the Kenco State of 3PL Innovation Survey, and how those insights can help 3PL providers prepare for Innovation Today.


By, Kristi Montgomery, VP of Innovation, Kenco Logistics.

There is much chatter, in the supply chain world, around innovation that focuses on bleeding-edge technologies, such as package-delivering drones, driverless trucks, and collaborative robotics. For supply chain leaders, this is interesting and eye-catching; but intrigue does not always mean adoption. As the VP of Kenco Innovation Labs, I frequently work with customers who are trying to find the balance between making impactful and proven investments in new technologies, and knowing when to take a leap on piloting a promising but unproven innovation. The decision is rarely an easy one: especially when there is so much at stake in a finely tuned supply chain.

We wanted to get to the bottom of this tension, so, recently, Kenco conducted a survey with supply chain leaders from a range of industries, and from organizations of all sizes, to get a deeper understanding of how they define innovation, which technologies they think will have the greatest impact on the supply chain, and what their plans are for the future of innovation in their companies. One of our leading questions was how top executives and supply chain leaders defined the idea of “innovation” in their organization. The survey found that nearly 85% of these respondents defined it as “process improvements” or “business model innovation” – not as “adopting emerging technologies.” This is an interesting point: while most chatter in the industry suggests all companies have their eyes on flashy new technologies, this data signals that what is most important to supply chain leaders are new technologies and solutions that can have incremental but impactful changes TODAY in their supply chains.

This point continues to bear out throughout the data. An “innovation” pain point has always been around “Supply Chain Visibility” and to this day, it remains an innovation challenge for leaders. In fact, by looking at specific trends supply chain leaders are planning to invest in, the top three areas of interest are:

  1. Supply Chain Visibility (83%)
  2. Robotics and Automation (58%)
  3. Sensors and Internet of Things (42%)

On the other hand, the lowest areas of interest to currently invest in are:

  1. Driverless and Self-Driving Vehicles (14%)
  2. Drones (8%)
  3. Augmented Reality (8%)

And when asked how important each of these technologies are for their businesses, 64% of leaders deemed supply chain visibility as a high priority, while drones (42%) and driverless vehicles (40%) were equally indicated as not a priority.

These insights are not surprising to me – my customers are running a “tight ship” and, with so many moving aspects that can have great impact to the business, they can’t afford to take a gamble on a new technology that might slow down their processes or fail entirely. However, just because a supply chain leader can’t monitor the innovations for tomorrow, that doesn’t mean these innovations won’t be a priority and shouldn’t be on your radar.

Working closely with customers, my team and I investigate which emerging technologies can be utilized to better serve the supply chain industry both today and in the future. Take the LoadProof app for example – a customer was seeking ways to improve the manual process of documenting correct loading of product including labeling, pallet condition, product placement, and trailer placement/cubing. When my team looked at the landscape of this challenge, we recognized that this was one many other customers face and has impacted their finances. Without proof of compliance, customers dealt with significant financial penalties for products arriving in non-compliant conditions. With those challenges in mind, our team prototyped an application and website that was beta-tested at five Kenco locations. After a successful pilot program, we partnered with Smart Gladiator to develop a scalable, secure, enterprise-ready application for both Apple and Android devices. The creation of LoadProof was an innovative solution to the supply chain as it brought our customers one step closer to having supply chain visibility, an innovation pain point noted in Kenco’s State of the 3PL Innovation Survey.

Inevitably, the emerging technologies will start to become more reliable as they are tested and prototyped in different scenarios. And that’s where partners like 3PLs come in. 94% of respondents feel that it’s important for their 3PL provider to have a competency in technology and innovation, and more than half expect their 3PL provider to be investing in innovative technologies (another 32% want to co-invest).

The supply chain industry needs to continue thinking innovatively to create business value. As many supply chain executives are focused on the here-and-now, it’s up to the 3PL providers and supply chain partners to think ahead, prototype, and create proven results on emerging tech before their customers inquire about these technologies.

Kristi Montgomery, Vice President of Innovation, Kenco Logistics

Promoting transformational change in supply chain through delivery of innovation for customer-centric solutions

Like you, Kristi knows that innovation cannot just be a buzzword.  She is a dynamic explorer of strategic innovation that drives revolutionary change.  With 27 years of logistics and supply chain experience, she leads a dedicated team of specialists in Kenco Innovation Labs who identify, research, and prototype creative ideas with the potential to impact the supply chain. Collaborating with customers, entrepreneurs, and vendors from multiple industries enables Kenco to think “inside” the supply chain box and create unique, customer-driven solutions.  As the senior innovation officer, recognizing that no single approach works for every customer, Kristi leads research and development utilizing design thinking and open innovation to deliver business value for the 200+ customers that Kenco serves in North America.  Kristi is passionate about the relentless pursuit of innovation as an enabler of business growth and driver of strategic advantage. Executing on the innovation promise compels her to be a transformational agent of change.

Kristi received her BS in Organizational Management from Covenant College She is a certified Specialist in Design Thinking and Innovation as awarded by the Darden School of Business, University of Virginia.  She also received her Certified Information Executive designation from the Institute of CIO Excellence at the University of South Carolina.

Kristi serves on the Board of Directors for ChaTech, a non-profit dedicated to the promotion of technology and STEM education, is the Co-Chairman of the International Warehouse and Logistics Association Education Committee, and serves the industry speaking, participating as a panelist, and publishing articles promoting supply chain innovation.

The opinions expressed herein are those solely of the participants, and do not necessarily represent the views of Agile Business Media, LLC., its properties or its employees.

About One-Off Sound-Off

Welcome to "One-Off Sound-Off," a blog page devoted to guest commentary on all things supply chain. This is a space where industry leaders can share their opinions and expertise with the logistics and supply chain community. If you have an article or commentary you'd like to share, please consider sending a guest blog proposal to feedback@dcvelocity.com.


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