The Analysis and Application of Cold Chain Logistic in Chinese Medical Industry (Research Paper Sample)

The Analysis and Application of Cold Chain Logistic in Chinese Medical Industry Customer Inserts His/Her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name (Date) Outline China is known to be lagging behind in the construction of facilities pertaining to cold chain logistics that has led to considerable amount of pharmaceutical wastage in addition to hindering the speed with which the country's pharmaceutical industry can make a stronghold in the international market. The globalization process has led the world to become a much smaller place in terms of distance but the perspective of physical separation is still relevant in the context of freight that has to be safely transported between different regions in the world. If the physical distance is large there is greater likelihood of the freight being spoilt within the complex transport mechanism that is involved in the transportation of products such as medicines and health care products. The cold chain systems in China are presently undergoing considerable development and are slated to achieve global standards in the coming years. This research paper will examine the issue of China’s increasing potential in cold chain logistics in the pharmaceutical sector and the factors that characterize its present nature in the economy. The entire circumstances will be examined in the light of factual information that is available in the context of the medical industry in the country. Introduction The globalization process has led the world to become a much smaller place in terms of distance but the perspective of physical separation is still relevant in the context of freight that has to be safely transported between different regions in the world. If the physical distance is large there is greater likelihood of the freight being spoilt within the complex transport mechanism that is involved in the transportation of products such as medicines and health care products. A great deal of time and coordinative efforts are required to efficiently transport pharmaceutical products in order to save them from getting damages and unfit for human use. In order to make sure that such cargo does not get compromised or damaged during the transportation process, organizations in the pharmaceutical industry have begun to increasingly rely on cold chain technology. Cold chain logistics relates to transporting temperature susceptible products in a supply chain system by making use of refrigerated packing processes and logistics planning so that the integrity of such consignments is protected. It is well recognized that a chain can be as strong as its most vulnerable links. This concept is more relevant in a cold chain that can preserve the characteristics of a product by ensuring that the temperature is maintained within the required temperature limits; usually between 2 degrees to 8 degrees C. Pharmaceutical products can be quickly damaged if they are not stored or transported in the given temperature limits. Therefore, integrity of the supply chain in the context of products that are susceptible to getting damaged in high temperatures implies that additional conditions have to be complied in the context of adequate packaging, monitoring and temperature controls. Some pharmaceutical products are very valuable and sent in shipments as small packages or in refrigerated trailers but are not considered to be safe primarily because of failure in the monitoring and maintaining of temperatures. Modern methods of cold chain logistics favor the attaching of monitoring instruments with the freight to ensure that the recipients are satisfied with the product integrity during shipment. Whenever there is any contravention it can be located at the specific place of the supply chain and liability can be fixed against the defaulters. Reefers are now being increasingly used in cold chain logistics because they allow transport of pharmaceutical products under tight temperature controls. The cold chain can however result in certain breaches when cargo gets exposed during the unloading process or when the product is stored at temperatures below the specified levels. Presently only about 15 per cent of pharmaceutical and food products are transported through cold chain systems and the distribution systems have now begun to adopt measures whereby the shelf life of food products, vegetables and pharmaceuticals is ensured. The main problems faced by US exporters in the context of reaching their pharmaceutical products to majority of people in China pertains to their inability to transport their products to interior regions in China because of shortage of cold chain logistics. This shortcoming certainly proves to be a big trade barrier for not only multinational companies but also for local companies that are attempting to enhance their production and increase their market presence. Concurrently, such circumstances have proved to create a lot of opportunities for logistics companies that are attempting to sell their cold chain systems in the country. Given that the cold chain industry in China is still in the infancy stage, there is no clear way to determine when sufficiency will be achieved in cold chain logistics. The pharmaceutical distribution market in China is presently worth over $44 billion and is consistently faced with major challenges. China has a massive potential because of its huge rural population and the present availability is not sufficient in terms of logistics and infrastructure, which makes it difficult to ensure the delivery of medicines to patients in time through safe and cost effective measures. Although the government in China is taking proactive measures in meeting the challenges, the present structure of the distribution networks that comprise primarily of thousands of local and small distributors has created lots of difficulties for the government to keep track of manufacturers and products and to ensure timely delivery to end users. But a combined effort is being made by involving government initiatives, foreign involvement and market mechanisms to assist the sector in gradually improving the distribution systems in the sector. The major criteria for cold chain operations are to drive processes from end to end to achieve efficiencies. What is required is to have coordinated temperature controlled drugs in addition to proper warehousing and technologically advanced tracking and traceability systems. Companies have to consider the geographical aspect, because products have to be transferred from one end of the country to another and distribution centers play a major role in this regard because they have the ability to provide multiplayer services in the distribution systems, which further enhances supply efficiency. It is quite expensive to operate cold chains and mostly efforts are made by companies to adopt coordination measures in cold chain operations. In the pharmaceuticals sector, most of the companies have the resources to establish their own facilities but for companies that lack capital and technical expertise, it is required to initiate steps to develop cold chains through consortiums. Such consortiums are responsible for adopting predetermined industry standards that have to comply with government regulation. It can be expected as per experience in different developed countries that in China also more and more companies will join consortiums relating to cold chain logistics. It is also understandable that it is not practically possible for every company to have adequate resources to fund cold chain logistics. At the same time it is more evident that the entry of foreign retailers in China have contributed greatly in introducing expertise relating to cold chain logistics, which has considerably improved efficiency and reduced margins in the entire system. Background and Rationale As living standards in China improve, refrigeration standards pertaining to storage technologies of pharmaceuticals and drugs have been well-received by consumers through community stores and supermarkets in terms of frozen food and pharmaceuticals that are distributed in keeping with cold chain technologies that have been comprehensively applied and rapidly developed in the country. Cold chain logistics has now become a major thrust area in China especially in the food and pharmaceutical products. In comparison with other developed nations of the world, China is characterized with a big gap in terms of its cold storage industry and the refrigerated transport facilities, cold storage capacities, logistics and technological equipments. Undoubtedly there is immense potential for cold chain logistics in the country and in recent years there have been significant efforts to apply technology pertaining to cold chain logistics and drug safety management. The pharmaceutical cold chain logistics focuses upon developing the core capabilities and lessening costs of logistics in terms of the rush that has begun in developing third party logistics in the cold chain markets. A lot of capital needs to be invested in establishing cold chain systems and companies have to adopt long-term perspectives in the context of technology investment. Most of the time the required technology and equipments are readily available but most firms are unable to afford the huge investment and do not have the technical expertise to enjoy economies of scale. Indeed, it is a major challenge for Chinese authorities to find companies that are willing to make investments in cold chain logistics while they make entry into the Chinese markets. There is also a strong need for focusing upon education in enhancing the efficiency and availability of cold chain logistics in China. The Chinese government can start conducting training and workshops in educating and informing firms and distribution companies about the impending challenges and how they can...