Idea
The market
A cold chain is a temperature-controlled supply chain. It poses an uninterrupted series of refrigerated production, storage and distribution activities, along with associated equipment and logistics, which maintain the desired low-temperature range. It is used to preserve and to extend and ensure the shelf life of temperature-sensitive products. Such products, during transport and when in transient storage, are sometimes called cool cargo.
One of the most common and valuable types of cool cargo are vaccines and biologic medical products. In these industries, the conventional temperature range for a cold chain is 2 to 8 ºC, although the specific temperature tolerances may depend on the actual product being shipped. The temperature range is a part of the cold chain distribution process, which poses an extension of the good manufacturing practice (GMP) environment that all drugs and biological products are required to adhere to, enforced by the various health regulatory bodies and governments.
The problem of delivery management for this kind of cool cargo has two dimensions:
1) Economical dimension. The valuable cargo has the high risk to be contaminated due to temperature variations which may lead to financial losses.
2) Social aspect. Disruption of a cold chain may produce consequences such as decease outbreaks, as the vaccines were inactivated due to excess exposure to heat. Patients that think they were being immunized, in reality, are put at greater risk due to the inactivated vaccines they received. In another case, overheated (or overcooled) vaccines may be dangerous due to their toxicity. Anyway, according to World Health Organization reports, up to 25% vaccines come to patients contaminated due to failures in cold chains.
The problem
We have observed the business practice at this market and find out two points we would like to improve.
Problem #1: imperfections of temperature monitoring equipment
To keep a watch on a temperature of a cool cargo, transport operators use special devices called temperature data loggers (TDL). It is a portable measurement instrument that is capable of autonomously recording temperature over a defined period. Two types of TDLs are being widely used, and both have major disadvantages:
| + | - | |
|---|---|---|
| Vehicle body built-in TDL | Ability for real-time monitoring; Monitoring over the whole batch | Low precision of measurement; Tied to one vehicle |
| TDL placed in a cool cargo package | High precision of measurement; Follows cargo throughout the entire cold chain | One cannot read recordings until the cargo was unpacked |
Problem #2: mistrust and imperfections of modern business practice
As our survey taken on Russian market shows, distrust of transport operators is widely spread among pharmaceutical companies, because most of the SME-companies cannot take financial responsibility for the cases of damage to costly cargo called by temperature. Insurance policies do not usually cover temperature risks (for instance, see Institute Cargo Clauses by The International Underwriting Association of London). Therefore, for SME-companies the way to the market of logistics of vaccines or other cool cargos is generally blocked. Pharmaceutical companies prefer to contract with big transport companies or invest in their own truck fleet and equipment.
Furthermore, mistrust between contractors usually takes place in business especially in cases of their farness or lack of successful experience of collaboration.
To solve these problems, we come up with our solution.