A 15% to 20% smaller freezer tank fleet for Genentech

Cold Chain Logistics Cold chain Pharmaceutical
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WHO

Business model

One of the world's largest pharmaceutical companies. Raw materials, drug substances, are stored in large freezer tanks that are shipped to customer plants around the world, stored there until product is depleted, then returned. A new 300 liter tank costs $200,000 to $250,000.

Industry

Pharmaceutical cold chain, where the asset is expensive and the contents are worth more than the asset.

PROBLEM

What they felt

Sounds simple, right? Except when the company inventoried the tanks, a physical count that took calls across the US, Asia and Europe, it came up five short, and there was no way to account for drug substance in these tanks which was worth millions of dollars.

What we found

Several factors complicated the tracking challenge:

  • Once the substance shipped, it leaves the company's ERP system, requiring manual tracking from that point on
  • GPS tracking was not possible because there was no line of sight to the tanks, which were stored inside warehouses or below surface
  • Cellular tracking would work, but its high-frequency signals would not penetrate the stainless steel walls of the freezers
  • Batteries had to last 18 months, send out signals through stainless steel walls, and be capable of operating at temperatures as low as −40°C

WHAT WE DID

Prep and analysis

We defined what the solution had to survive before we looked at any product: the steel, the temperature, the battery life, and the point where the asset leaves the ERP system.

Execution

Trans-solutions worked closely with a small group of suppliers to develop the solution. The client was presented alternate approaches to this problem, each of which provided 24/7 tracking of both the asset and the surrounding temperature.

We had it built

There was nothing on the market that met the requirement, so this was not a selection exercise. We developed the solution with the suppliers rather than choosing between things that already existed.

RESULTS

What they got

A fleet 15% to 20% smaller, for about the price of one tank

With visibility to every tank and its contents, Genentech estimated the fleet could shrink by 15% to 20%. Building the solution cost $250,000 to $400,000, with $200,000 to $275,000 a year to run the control tower, roughly the price of a single tank.

The solution yielded:

  • Real-time visibility to tanks, the surrounding temperature, and drug substance inventory
  • Reduced cost of unnecessary new tank purchases
  • Prediction of when new tanks would be returned and available for refill
  • Better planned replenishment schedules and reduced inventory
  • A smaller fleet of tanks through better inventory management
  • The ability to proactively suggest replenishment of drug substance

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