FDA approval came too late for last year's flu season. But Wyeth Pharmaceuticals plans to make up for lost time with this year's launch of its nasal influenza vaccine, FluMist. It's banking on a high-tech cold chain distribution network to make it happen.
John Johnson joined the DC Velocity team in March 2004. A veteran business journalist, John has over a dozen years of experience covering the supply chain field, including time as chief editor of Warehousing Management. In addition, he has covered the venture capital community and previously was a sports reporter covering professional and collegiate sports in the Boston area. John served as senior editor and chief editor of DC Velocity until April 2008.
For nearly half a century, Americans have coughed, hacked, wheezed and sneezed their way through flu season with no prospect of protection other than the traditional flu shot. That's about to change. This fall, as several new strains of flu threaten to attack nasal passages across the country, Wyeth Pharmaceuticals will launch a brand new weapon in the cold wars: a flu vaccine available in nasal spray form. The product, which is actually a live (though weakened) virus that is frozen at the point of manufacture, will be the first flu vaccine not administered by injection. That means that with some of their patients, physicians can drop the needle once and for all (at least where influenza is concerned).
Right now, rows of FluMist injectors sit frozen—not in time, but in the chilly (minus 22 degrees For minus 30 degrees Celsius) interior of a distribution center on the outskirts of Louisville, Ky. The spray received final regulatory approval from the FDA this spring, and it's now ready to emerge from the deep freeze.
The highly automated 86,000-square-foot facility was built last year in anticipation of FDA approval that didn't come in time for last year's flu season. But Jim Cafone, who leads the distribution and transportation function for Wyeth Pharmaceuticals, puts the best face on the delay: "It's true that the building has been a frozen asset for us," he says, "but the good news is the delay allowed us to stress-test the systems and make sure things were running smoothly."
Big chill
Though technological breakthroughs could someday ease the distribution challenges, right now, FluMist is definitely not ready to come in from the cold. Because the product is actually a live virus, it is stored prior to distribution at temperatures no higher than minus 22 degrees F. Exposure to ambient temperatures could affect product stability.
That meant starting from scratch where DC construction was concerned. "There was no real prototype DC out on the market," says Cafone. "If we were just building a typical DC, we could easily go out and look at material handling options and different labor strategies. You can benchmark freezer applications like ice cream storage, but there's no way to go out and benchmark deep frozen applications for pharmaceutical distribution. We've got very strict regulatory requirements to follow."
Given the absence of hard guidelines, it seemed prudent to call in the pros. The Wyeth team hired WEPCO, a Pittston, Pa.-based material handling integration firm, to design and implement many of the systems used in the DC. After testing prototypes at its own facility, WEPCO drew up the center's floor plan. Once the floor plan was set, the DC was essentially built around it.
The focus, of course, was on creating a fail-safe operation as well as accommodating the product's unique requirements, which meant much of the equipment had to be custom designed. When the vaccine (which is manufactured near Philadelphia) arrives at the Louisville DC in deep frozen tractor-trailers, the trucks back up to one of two specially designed dock doors,and an inflatable dock seal,custom made by Bondor Manufacturing, forms an airtight grip around the truck. Once the warehouse doors are opened, a vertically stored dock leveler made by Overhead Door Corp.'s McGuire division is lowered into the truck, and the narrow buffer area—or vestibule—between the truck and the warehouse is quickly cooled to minus 22 degrees F. At that point, product can be moved from the truck into the receiving freezer and ultimately into the storage freezers with no exposure to ambient temperatures.
The freezer dock door system "isn't rocket science," admits Christopher Paulsen, chief executive officer of WEPCO, "but to our knowledge it's never been done before. Basically we had to design something that would ensure that ambient temperatures never came in contact with the product."
Once unloaded and checked in, pallet loads of product are eased onto conveyors designed and manufactured by Hytrol Conveyor Co. and transported in freezer tunnels to one of two 13,500-square-foot main freezers, each capable of holding 1,200 pallets. Inside the main freezers,two ASRS cranes fromWoodson Inc. maneuver the pallets through the system. Once the shipping cycle begins, pallets are moved from the freezers on conveyors through the freezer tunnels to a depalletizing station, where a pair of hightech robots manufactured by Fanuc Robotics place individual cases of FluMist on a second conveyor system.
All of this automation is aimed at minimizing human exposure to the harsh storage environment. "We didn't want to put a human into this environment for a prolonged period," explains Cafone. "OSHA will allow limited exposure to such extreme temperatures, but we tried to engineer the human out of the deep frozen conditions as much as possible by using AS/RS, robots, conveyor systems and a patented pick module." In fact, the cold environment is too harsh for even the robots to handle; they sport space-age parkas that keep them 50 degrees warmer than the actual interior temperatures.
After leaving the robots, the cases of product move to one of eight custom-designed airlocks, which were made by Tinsley Design & Fabricating Inc. The airlocks give order pickers working in an ambient pick/pack room access to the cases of FluMist, which must be kept at freezer temperature while indivi dual orders are picked and packed . Though the pick/pack room's temperature is a constant 65 degrees, the humidity levels cannot go above 50 percent to avoid frost buildup on the equipment. (Wyeth's warehouse management system monitors temperatures here and throughout the building.)
"Pick/pack is the most critical phase of the operation," says Dennis Gniazdowski, FluMist distribution center project director. "We have less than 90 seconds to complete the pack-out process, including picking the doses, packing them in a special expanded polystyrene (EPS) foam shipping box with dry ice and dunnage,and sealing the lid. All of the steps are automatically measured by timers, scales, photo eyes and bar-code scanners so we can monitor the process for compliance." (All of those controls were provided by Dynamic Automation Ltd., which also provided the user interface software.)
Once the lid is applied to the shipping carton, the carton is dispatched to another Hytrol conveyor for a five-minute ride to the dock door, where it goes through a final manifesting process before being loaded onto a truck.
The ice men goeth
Once product is ready to be shipped, the clock again starts to tick. Shipments of FluMist must reach their final destination— physicians' offices and pharmacies across the country—within 30 hours of the time they're packed.
To manage the critical transportation segment, Wyeth partnered with UPS Supply Chain Solutions and Total Quality Logistics. Total Quality Logistics built three specialty trailers with satellite tracking systems that let Wyeth monitor environmental conditions during the inbound shipping process."If we notice that a temperature is veering outside of our limits, a variety of people are notified immediately via satellite beeper so that someone can rectify the situation," says Cafone. "This is another activity that is unique to this logistics process."
UPS Supply Chain Solutions, which also handles order fulfillment for the Louisville facility, carries out the actual next-morning deliveries to Wyeth's customers. FluMist is over-packed in dry ice and shipped in a specialized shipping container. But dry ice, which gives off carbon dioxide, is considered a hazardous material. Therefore, if shipments reach a certain volume, Wyeth risks exceeding the dry ice hazmat "shipping budget" for UPS's nightly air sortation and delivery process. Staying within those limits adds another daily logistical challenge.
Before Wyeth and UPS start the daily picking and packing process, all daily order volume is mapped against a hazmat budget for the destination delivery ZIP code. Then, orders that are slated for delivery the next morning are batched and sent in waves to the floor for picking. "We want to make sure that if an order is picked, it absolutely arrives at the customer's doorstep by 10: 30 a.m. the following day," says Mark Hale, director of UPS-SCS Health Care Operations. "If the order volume exceeds the nightly dry ice airlift budget, then shipments could be rerouted."
Double or nothing
Losing a day's worth of shipments to spoilage would be a problem. But losing a DC's worth of inventory would be a catastrophe. Early in the planning process, the Wyeth and WEPCO executives found themselves brainstorming ways to prevent product spoilage resulting from an equipment failure, power failure or other natural disaster. Given the high value of the items being stored, they opted to build in redundant equipment at all phases of the operation.
As a result, the DC today features double conveyor lines, double freezers, double picking zones—even doubles of all the material handling equipment. Electricity is supplied via two separate power feeds from two different substations. The redundancy drove up construction costs considerably, but the team felt the investment was justified given the value of the inventory involved.
"We wanted the highest level of customer service,"Cafone recalls with obvious pride. "[Building this DC] was definitely a highlight for our team. Most people don't get projects like this in their entire careers. Some people might say 'I built three DCs,' and although that's always a monumental undertaking, they generally had benchmarks to guide them. That wasn't the case here. We were pretty fortunate to be part of it. Not many people can put this type of thing in their dossiers."
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."
Businesses are cautiously optimistic as peak holiday shipping season draws near, with many anticipating year-over-year sales increases as they continue to battle challenging supply chain conditions.
That’s according to the DHL 2024 Peak Season Shipping Survey, released today by express shipping service provider DHL Express U.S. The company surveyed small and medium-sized enterprises (SMEs) to gauge their holiday business outlook compared to last year and found that a mix of optimism and “strategic caution” prevail ahead of this year’s peak.
Nearly half (48%) of the SMEs surveyed said they expect higher holiday sales compared to 2023, while 44% said they expect sales to remain on par with last year, and just 8% said they foresee a decline. Respondents said the main challenges to hitting those goals are supply chain problems (35%), inflation and fluctuating consumer demand (34%), staffing (16%), and inventory challenges (14%).
But respondents said they have strategies in place to tackle those issues. Many said they began preparing for holiday season earlier this year—with 45% saying they started planning in Q2 or earlier, up from 39% last year. Other strategies include expanding into international markets (35%) and leveraging holiday discounts (32%).
Sixty percent of respondents said they will prioritize personalized customer service as a way to enhance customer interactions and loyalty this year. Still others said they will invest in enhanced web and mobile experiences (23%) and eco-friendly practices (13%) to draw customers this holiday season.
That challenge is one of the reasons that fewer shoppers overall are satisfied with their shopping experiences lately, Lincolnshire, Illinois-based Zebra said in its “17th Annual Global Shopper Study.”th Annual Global Shopper Study.” While 85% of shoppers last year were satisfied with both the in-store and online experiences, only 81% in 2024 are satisfied with the in-store experience and just 79% with online shopping.
In response, most retailers (78%) say they are investing in technology tools that can help both frontline workers and those watching operations from behind the scenes to minimize theft and loss, Zebra said.
Just 38% of retailers currently use AI-based prescriptive analytics for loss prevention, but a much larger 50% say they plan to use it in the next 1-3 years. That was followed by self-checkout cameras and sensors (45%), computer vision (46%), and RFID tags and readers (42%) that are planned for use within the next three years, specifically for loss prevention.
Those strategies could help improve the brick and mortar shopping experience, since 78% of shoppers say it’s annoying when products are locked up or secured within cases. Adding to that frustration is that it’s hard to find an associate while shopping in stores these days, according to 70% of consumers. In response, some just walk out; one in five shoppers has left a store without getting what they needed because a retail associate wasn’t available to help, an increase over the past two years.
The survey also identified additional frustrations faced by retailers and associates:
challenges with offering easy options for click-and-collect or returns, despite high shopper demand for them
the struggle to confirm current inventory and pricing
lingering labor shortages and increasing loss incidents, even as shoppers return to stores
“Many retailers are laying the groundwork to build a modern store experience,” Matt Guiste, Global Retail Technology Strategist, Zebra Technologies, said in a release. “They are investing in mobile and intelligent automation technologies to help inform operational decisions and enable associates to do the things that keep shoppers happy.”
The survey was administered online by Azure Knowledge Corporation and included 4,200 adult shoppers (age 18+), decision-makers, and associates, who replied to questions about the topics of shopper experience, device and technology usage, and delivery and fulfillment in store and online.
An eight-year veteran of the Georgia company, Hakala will begin his new role on January 1, when the current CEO, Tero Peltomäki, will retire after a long and noteworthy career, continuing as a member of the board of directors, Cimcorp said.
According to Hakala, automation is an inevitable course in Cimcorp’s core sectors, and the company’s end-to-end capabilities will be crucial for clients’ success. In the past, both the tire and grocery retail industries have automated individual machines and parts of their operations. In recent years, automation has spread throughout the facilities, as companies want to be able to see their entire operation with one look, utilize analytics, optimize processes, and lead with data.
“Cimcorp has always grown by starting small in the new business segments. We’ve created one solution first, and as we’ve gained more knowledge of our clients’ challenges, we have been able to expand,” Hakala said in a release. “In every phase, we aim to bring our experience to the table and even challenge the client’s initial perspective. We are interested in what our client does and how it could be done better and more efficiently.”
Although many shoppers will
return to physical stores this holiday season, online shopping remains a driving force behind peak-season shipping challenges, especially when it comes to the last mile. Consumers still want fast, free shipping if they can get it—without any delays or disruptions to their holiday deliveries.
One disruptor that gets a lot of headlines this time of year is package theft—committed by so-called “porch pirates.” These are thieves who snatch parcels from front stairs, side porches, and driveways in neighborhoods across the country. The problem adds up to billions of dollars in stolen merchandise each year—not to mention headaches for shippers, parcel delivery companies, and, of course, consumers.
Given the scope of the problem, it’s no wonder online shoppers are worried about it—especially during holiday season. In its annual report on package theft trends, released in October, the
security-focused research and product review firm Security.org found that:
17% of Americans had a package stolen in the past three months, with the typical stolen parcel worth about $50. Some 44% said they’d had a package taken at some point in their life.
Package thieves poached more than $8 billion in merchandise over the past year.
18% of adults said they’d had a package stolen that contained a gift for someone else.
Ahead of the holiday season, 88% of adults said they were worried about theft of online purchases, with more than a quarter saying they were “extremely” or “very” concerned.
But it doesn’t have to be that way. There are some low-tech steps consumers can take to help guard against porch piracy along with some high-tech logistics-focused innovations in the pipeline that can protect deliveries in the last mile. First, some common-sense advice on avoiding package theft from the Security.org research:
Install a doorbell camera, which is a relatively low-cost deterrent.
Bring packages inside promptly or arrange to have them delivered to a secure location if no one will be at home.
Consider using click-and-collect options when possible.
If the retailer allows you to specify delivery-time windows, consider doing so to avoid having packages sit outside for extended periods.
These steps may sound basic, but they are by no means a given: Fewer than half of Americans consider the timing of deliveries, less than a third have a doorbell camera, and nearly one-fifth take no precautions to prevent package theft, according to the research.
Tech vendors are stepping up to help. One example is
Arrive AI, which develops smart mailboxes for last-mile delivery and pickup. The company says its Mailbox-as-a-Service (MaaS) platform will revolutionize the last mile by building a network of parcel-storage boxes that can be accessed by people, drones, or robots. In a nutshell: Packages are placed into a weatherproof box via drone, robot, driverless carrier, or traditional delivery method—and no one other than the rightful owner can access it.
Although the platform is still in development, the company already offers solutions for business clients looking to secure high-value deliveries and sensitive shipments. The health-care industry is one example: Arrive AI offers secure drone delivery of medical supplies, prescriptions, lab samples, and the like to hospitals and other health-care facilities. The platform provides real-time tracking, chain-of-custody controls, and theft-prevention features. Arrive is conducting short-term deployments between logistics companies and health-care partners now, according to a company spokesperson.
The MaaS solution has a pretty high cool factor. And the common-sense best practices just seem like solid advice. Maybe combining both is the key to a more secure last mile—during peak shipping season and throughout the year as well.