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Our Response to COVID-19

March 24th, 2020 Posted by Update 0 thoughts on “Our Response to COVID-19”

To our valued Customers, Partners and Suppliers,

As we assist clients and businesses who’s transportation networks are disrupted by the coronavirus situation, we are also listening and learning about how we can further co-operate with our network of shippers, carriers and forwarders to provide thermal protection and cargo security to a number of industries including: Pharmaceuticals, life-sciences, food, beverage and health care supply-chains.

 

Please reach out to us through your QProducts representative with any questions or email us at info@qsales.com for ways we can protect temp-sensitive cargo on all modes of transportation, including shelf-stable, perishable, CRT and 2-80C products.

 

Our manufacturing and shipping operations during this time will take place Monday – Thursday, from 6am-4pm CST.

 

QProducts & Services COVID-19 Cold Chain assistance

When you Buy a Product from QProducts, You Buy a Company

As valued members of the QProducts & Services family, we extend to you our commitment to the health and safety of our teams and communities as the spread of COVID-19 continues to be a growing concern domestically and around the world.

 

At QProducts and Services, we have implemented precautionary measures in alignment with our parent corporation, LANCO and the CDC’s guidelines in order to best protect our sales and production staff while continuing to do business with our suppliers, deliver for our clients, and ultimately, support the global supply chain. Including:

  • Encouraging employees to follow CDC and WHO guidelines
  • Eliminating non-essential business and personal travel
  • Minimizing risk of transmission using proper hygiene and social distancing
  • Prohibiting group meetings
  • Self-Monitoring requirements for employees and members of their households

 

For the latest information about COVID-19, please visit cdc.gov or your local health department website.

 

Best regards,

kombucha fermenting

Keeping the Kombucha Cold Chain Intact

March 23rd, 2020 Posted by Food & Beverage, Manufacturing, Temperature Protection 0 thoughts on “Keeping the Kombucha Cold Chain Intact”

Keeping the Kombucha Cold Chain Intact

Authors: QProducts & Services Food & Beverage Team, Under the Direction of Kevin Lynch and Stephen Wozniak

 

 

Critics say kombucha is just another health fad that will soon fizzle out, but the market proves otherwise. Its popularity has made the beverage market soar, and it has given manufacturers opportunities to expand into the kombucha business. Kombucha brewers are impacting the beverage industry at an accelerated pace, and the rise of this fermented beverage has kombucha brewers seeking solutions to protect their brand and product integrity throughout the cold chain.

kombucha fermenting

Analyzing Temperature Thresholds of Kombucha

 

There are important considerations in order to maintain the health of the cultures when transporting kombucha. According to Kombucha Brewers International, cold storage ought to be maintained at 34-40°F (1.1-4.4°C) to slow the fermentation of the kombucha throughout the supply chain. Unpasteurized kombucha contains live cultures and can continue to ferment and raise alcohol content over time, especially if transported, stored, or displayed without being stored in cold temperatures.

 

Passive temperature protection can make this happen, given that it ensures certain commodities maintain a specific temperature range during the shipping process.

temperature monitoring

Alternatives to Refrigerated Transport

 

It is imperative that the integrity of kombucha is protected during fermentation and during transit. Although kombucha brews best between 68-78°F, the temperatures associated with transporting the product may vary, depending on the living cultures and alcohol content. According to GT’s Living Foods, their kombucha is a raw food containing billions of living probiotics so it should always be kept in a chilled refrigerator between 33-37°F.

 

On the other hand, Kombuchade crafts their kombucha as a probiotic sports drink that is stable at ambient temperature for distribution and then requires refrigeration once received at the retailer. Matt Lancor, founder of Kombuchade, states “We can ship via ambient temperature. As long as it not freezing or at boiling temperatures, we are happy.” So, how do you keep the product at ambient temperature?

 

There are certain products on the market that capture the existing environment of the freight and help maintain a safe temperature range throughout the delivery process. PalletQuilt® does just that, in which it protects the cargo from extremes of both heat and cold. PalletQuilt® can be applied and removed in minutes, and is recyclable.

 

As mentioned above, there are alternatives to refrigerated transport. Most kombucha manufacturers are currently using thermal box liners to maintain their cold chain. Insulated thermal box liners are lined with reflective metalized film to keep temperatures consistent during transit while protective bubble lining cushions your items. If you’re considering foil bubble box liners for your products, here at QProducts & Services, we provide cost-effective, versatile insulated shipping liners that supply thermal protection for parcel-sized shipments. These QFoil™ Box Liners are made with a thicker foil and bubble combination for more extreme transit conditions.

 

qfoil box liner

 

Kombucha’s Impact on the Beverage Industry

 

According to Forbes, in response to the falsely labeled alcohol content on some kombucha bottles back in 2010, the Alcohol and Tobacco Tax and Trade Bureau updated its guidelines to highlight that it would regulate any kombucha products that contain 0.5% or more alcohol by volume, or ABV. Many kombucha manufacturers took different routes in response to this regulation. Some complied with the ABV guidelines while others created consciously labeled kombucha beer brands.

 

To remain compliant, many kombucha manufacturers have undergone reformulation or modification of their brewing processes in order to comply with federal law. While the specifics of each manufacturer’s process remain confidential, most have manipulated the yeast, either through filtration, centrifuge, or other means.

“We have been fortunate to be able to work with the University of Wisconsin to help refine our fermentation process in order to keep our product in compliance,” said Vanessa Tortolano of NessAlla Kombucha.

 

In addition, kombucha has made a major impact on the food and beverage industry. Evidence-based health benefits have driven consumer demand and many people believe that it helps treat their health problems. According to Healthline, it is a source of probiotics, contains antioxidants, can kill harmful bacteria, and has been shown to improve LDL and HDL cholesterol levels. Similarly, analysts believe that more people are drinking kombucha because there has been more interest in healthier drinks. People who are moving away from sugary drinks and sodas want a little more taste than plain water.

 

“I was inspired by GT’s kombucha to formulate probiotic sports drinks using only naturally fermented, organic plants. I believe that we have created the cleanest, and most functional sports drinks on the planet,” exclaimed Matt Lancor, founder of Kombuchade.

brewing kombucha

Kombucha Industry Growth

 

Furthermore, in the past decade, kombucha has become an influential player in the global beverage economy, especially in the United States. The global market size of the fermented beverage is anticipated to hit $6.2 billion by 2026, according to a report by Acumen Research and Consulting.

 

In 2016, PepsiCo announced that it had entered into a definitive agreement to acquire KeVita, a leading North American creator of fermented probiotic and kombucha beverages. Similarly, in 2018, the Coca-Cola Company had acquired kombucha maker Organic and Raw Trading Co., which makes the MOJO brand of naturally fermented, live culture, organic kombucha drinks. Although the commercialized market history of kombucha is as recent as a little over twenty years, its market size and product variety are growing fast.

market growth chart

Final Thoughts

 

Kombucha brewers recognize the risk in making changes to how their product travels through the supply chain. They also understand the importance of operating a cost-effective supply chain to remain competitive in a growing industry. Through a strategic partnership with Riskpulse, QProducts & Services is now able to quantify temperature risks in advance of a brewer shipping an order.

 

Furthermore, QTechnical Services, a division of QProducts & Services, specializes in executing live temperature studies to qualify performance of a passive temperature protection solution. QTechnical Services collaborates with the brewer to understand their unique requirements, then creates a custom test protocol to assure valuable data is collected during the temperature study. A detailed report verifies the results allowing the brewer to make informed decisions.

 

Overall, the kombucha market is very competitive and is driven by an increase in health and wellness interests, in addition to the growing consumer demand for health products and natural ingredients. With the explosive industry growth and rise of various brands including GT Living Foods, KeVita, Kombuchade, Health-Aide, Brew Dr. Kombucha, and many more, manufacturers are driven to provide consumers with the best product while protecting their brand and product integrity at all stages of the supply chain and consumer consumption.

 

We believe in the future of this industry, and we believe passive temperature protection can continue to help this beverage market soar.

coronavirus

Coronavirus and its Impact on the Global Supply Chain

March 3rd, 2020 Posted by Manufacturing, Temperature Protection, Transportation, Update 0 thoughts on “Coronavirus and its Impact on the Global Supply Chain”

Coronavirus and its Impact on the Global Supply Chain

Authors: QProducts & Services Team, Under the Direction of Paul Yadron, Sr. VP of Sales

 

 

 

While a number of new cases related to the coronavirus continues to rise in China and around the globe, the impact of the coronavirus has expanded into the U.S. energy, agriculture, and transportation sectors. From a transportation perspective, supply chains have been compromised as China’s government has worked to contain the virus. At QProducts & Services, we want to provide you with the most up to date information on what is occurring.

 

coronavirus

 

What is Coronavirus?

 

According to the World Health Organization (WHO), coronaviruses or CoV are a large family of viruses that cause illness ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS-CoV) and Severe Acute Respiratory Syndrome (SARS-CoV). A novel coronavirus (nCoV) is a new strain that has not been previously identified in humans. Lastly, the virus is zoonotic, meaning that it is transmitted between animals and people.

 

 

hong kong port

 

Coronavirus and Supply Chain Disruption

 

Since the outbreak in December 2019, the supply chain has been compromised from the China marine terminals to the inland destination points. Cargo that has been offloaded at China terminals has been backing up. Domestic freight routing has been hindered because of the measures to contain the spread of the virus. According to Talk Business, less cargo has been shipped from China to the United States as production in China has slowed because factories have been shut down to contain the virus. The lower volumes of cargo and containers have led to fewer ocean shipments to the United States.

 

Every company that ships products in and out of China has to plan and prepare for production and distribution slowdowns. Closed-off ports and delayed shipments from China are causing ocean reefer rates to increase and capacity to tighten. Less cargo has been shipped from China to the United States as production in China has slowed because factories have been shut down to contain the virus.

 

About 40% of all shipments that entered the United States in January 2020 came from China, according to Freightwaves. Now, shipments are backing up and being cancelled due to the coronavirus, limiting shipments that can enter the United States. The coronavirus has also removed about 300,000 to 350,000 twenty-foot equivalent units of demand from Chinese exports to the world, reported Talk Business. There is also a limited supply of reefer plugs in China’s ports, resulting in congestion and lack of availability.

 

global business impact

 

Solutions to the Coronavirus Impact on the Supply Chain

 

We are working to help customers around the globe find alternatives to reefers by using CargoQuilt®

and ContainerKit™ solutions. While we cannot control the delays and cancellations caused by the coronavirus, we can provide alternative solutions. Rather than eating the cost of rising ocean reefer rates, companies can still protect their temperature-sensitive cargo with passive temperature protection shipping solutions.

 

Passive temperature protection does not require the need for a power supply, while active temperature protection does. Our CargoQuilt® and ContainerKit™ solutions work by passive temperature protection, ensuring quality, safety, and efficacy of temperature-sensitive products within a pre-defined range. In addition, passive temperature protection solutions tend to have a lower cost than active temperature protection given elimination of a power supply and the fixed amount of thermal protection.

 

 

multi trip container kitFinal Thoughts

 

Shippers are watching the unfolding impact of the coronavirus closely, and many have already begun to factor delays into their supply pipelines. An ever-growing number of companies are feeling the effects of the deadly virus, with many global organizations fearful that it could get worse. Global tech giant Apple has warned of global “iPhone supply shortages” resulting from its Chinese factories closing due to the outbreak.

 

“Many companies are turning to charter flights to deal with the lack of supply, these flights have been fluctuating between $500,000 and $800,000 one way,” American Global Logistics​ said in an update emailed to Supply Chain Dive.

 

While the impact is substantial, there are alternatives to help combat the rising costs. Supply chain visibility is more important than ever as companies determine the best approach and monitor the risks involved. For now, those who proactively identify specific supply risks and manage it can potentially find solutions or help mitigate the impact.

 

global supply chain

Commodity Protection in the Global Supply Chain

February 3rd, 2020 Posted by Manufacturing, Transportation, Update 0 thoughts on “Commodity Protection in the Global Supply Chain”

Commodity Protection in the Global Supply Chain

Authors: QProducts & Services Team, Under the Direction of Paul Yadron, Sr. VP of Sales

 

 

 

 

In our global supply chain, consumable items require specialized forms of transportation and storage. Consumer tastes, legislative change, transit, deterioration, and physical damage are all factors that impact how commodities are protected and transported. In the pharmaceutical industry specifically, certain controlled room-temperature (CRT) drugs require stricter regulations and review due to the sensitive nature of the product. On the other hand, the food and beverage sector requires increased temperature protection due to consumer demand and shifting consumer tastes.

global supply chainWhat is a Consumable Commodity?

 

In the logistics space, a consumable commodity is a product that is intended to be consumed. These could be defined as coffee, dairy, or certain drugs and medicines.

 

woman in grocery store scanning oil

 

Legislative Policy on Food Commodities in the Supply Chain

 

Government regulations and procedures affect all elements of the logistics system. Many governments throughout the world have established policies on the selection of commodities such as medical products. For example, how items are procured, when items are distributed, where and how items are stored, and the quantities customers receive are all factors involved in legislative policy.

 

In the food and beverage industry, food commodities can be either raw agricultural commodities or processed commodities, provided that they are the forms that are sold or distributed for human consumption. According to the United States Environmental Protection Agency, or EPA, a raw, agricultural commodity is defined to include the following:

  • Fresh fruits, whether or not they have been washed and colored or otherwise treated in their unpeeled natural form
  • Vegetables in their raw or natural state, whether or not they have been stripped of their outer leaves
  • Grains, nuts, eggs, raw milk, meats, and similar agricultural produce

 

In the United States, although there is no all-encompassing federal legislation regulating the packaging industry, the federal government has asserted its authority to regulate food, drug, and cosmetic packaging to preserve consumer safety and confidence. For example, the U.S. Food and Drug Administration, or FDA, regulates the packaging and labeling of food. The intent of these regulations is to enhance the safety of food distributed throughout the country and keep consumers informed about the food they’re consuming.

 

From a supply chain perspective, the packaging and transportation of food commodities is highly regulated, especially at the packaging stage. Packaging materials such as plastics, coatings, papers, food colorants, and adhesives must be regulated and deemed safe for use. Under the Federal Food, Drug, and Cosmetic Act, it is the FDA’s responsibility to make certain that no packaging materials contaminate food, and determine if new food-contact materials, or new uses of already-used materials are safe.

 

In addition, the Food Safety Modernization Act, or FSMA, enables the FDA to better protect public health by strengthening the food safety system. The primary target of FSMA is to eliminate contamination during transportation. By focusing on sanitary transportation, the FDA plans for FSMA to eliminate day-to-day practices that lead to food-safety risks, such as a failure to store food items at the appropriate temperature. Temperature protection is imperative in the food supply chain to ensure the quality of the food remains intact. According to Safe Food Alliance, FSMA will touch every segment of the produce business supply chain from farm to fork. Under FSMA, the FDA has proposed seven major regulations that affect how produce is grown, packed, processed, shipped, and imported.

 

monitoring temperature of foodLegislative Policy on Pharmaceutical Commodities in the Supply Chain

 

In the pharmaceutical industry, the quality of a pharmaceutical product’s packaging plays an integral role in preserving the quality and effectiveness of medication through its shelf life. Per FDA regulations, pharmaceutical packaging must provide protection against the following:

 

  • Exposure to light, moisture, oxygen, and variations in temperature
  • Physical damage through handling, shipping, and storage processes
  • Contamination
  • Package labeling must clearly identify the product

 

With these packaging regulations, pharmaceuticals and prescription drugs must be monitored to secure protection in the pharmaceutical supply chain. Strong pharmaceutical legislation in the logistics space not only helps to strengthen each link within the pharmaceutical supply chain, but helps ensure access to and availability of medicines.

 

Furthermore, a nonprescription medicine is one that the FDA has found to be safe and effective for direct consumer use based on the label instructions and warnings. Regulatory review of CRT drugs is conducted by the Center for Drug Evaluation and Research (CDER) within the FDA. These CRT drugs go through a system of active-ingredient-specific CRT monographs, which is a rulemaking process that establishes drug standards. An expert advisory panel meets to assess whether the active ingredients in the drug meet the standard of GRASE: generally recognized as safe and effective.

 

In addition to safety regulation, CRT drugs require specific temperature protection during transit. The FDA has specific regulations that define appropriate storage conditions for pharmaceuticals. The majority of CRT medications are designed to be stored in their original packaging at approximately room temperature, which can range from 15-25°C (59-77°F). However, certain refrigerated drugs must be stored and transported within 2-8°C (35-46°F), unless a medicine is deemed stable at other temperature ranges.

 

Prior to the CRT regulations mentioned, CRT drugs, or control room temperature (CRT) pharma products, were not always required to be protected as part of the cold chain. Historically, cold-chain products received some type of specialized packaging, while CRT products could be shipped with standard packaging. Around 2012, the industry experienced a revolution as managing temperatures of pharmaceutical products during shipment became more tightly regulated. Both cold-chain products and CRT products began receiving specialized packaging geared to the temperature ranges listed on the product label. With this change, the industry saw the demand for passive thermal packaging.

 

According to Pharmaceutical Commerce, cold chain means, almost universally, a 2-8°C (35-46°F) temperature range. CRT is a mixture of many different storage and shipping temperature ranges, as identified on the product label. There are significant differences in managing the logistics of the two classes of products. Nevertheless, temperature protection for ambient temperature profiles or CRT shipments became just as imperative as practices for cold chain shipments. Now, passive thermal packaging ensures these commodities maintain a specific temperature range during the shipping process by relying on a source of energy and insulation.

 

fda pharmaceuticals

 

Consumer Tastes and Commodities in the Cold Chain

 

Over the next few years, the ingredient landscape across big food chains is expected to shift considerably as more players move to sustainable, natural, and less processed alternatives, according to Nation’s Restaurant News. Consumer preferences have driven this course over the last decade. Consumers want to know where their food is coming from and how it is raised. Certain food commodities will need to ship under stricter tolerances as less preservatives and fresher ingredients will require increased temperature sensitivity.

 

In addition, this generational shift in consumer taste is impacting the industry as a whole. According to a report by the U.S. Department of Agriculture, millennial households are buying more unprocessed foods such as fruits and vegetables versus pasta and potato chips. In summary, millennials want their food quick, easy, fresh, and non-processed. Millennials also want convenience. According to Food Insight, 55% of millennials say that convenience is one of the most important factors when they are deciding what foods to buy.

 

The demand for quality and convenience has also opened up the market to meal kit delivery companies including Blue Apron, and also grocery delivery services such as Amazon Fresh. The cold chain makes all of this possible, but it’s also had to change to keep up with this demand. Without the expertise, execution, and growth of cold food logistics, none of the items mentioned above would be possible.

 

The cold chain market is expected to experience growth given this demand. According to Food Logistics, the global cold chain market is projected to grow by $3.9 billion, driven by a compounded growth of 10.8%. Transportation companies must adapt so they can safely and quickly deliver food without it going bad. Refrigerated delivery units and passive temperature protection will continue to rise. So, how do supply chains accommodate this demand?

 

 

amazon fresh truck

 

Final Thoughts

 

Passive temperature protection ensures that consumable commodities maintain a specific temperature range during the shipping process, whether that lasts hours or days. It’s in these circumstances that thermal packaging and cold chain shipping containers are used to help protect these commodities.

 

Supply chains will need to adapt and improve their processes in order to keep up with industry regulations and consumer demand.

 

Overall, commodity security and protection impacts products throughout the supply chain and the consumers that receive them and use them. Food and medicine safety have been and always will be a priority, and it begins with the manufacturing, packaging, and distribution of products.

Automation Is Not the Enemy: Systematizing Workflow in the Supply Chain

December 16th, 2019 Posted by Manufacturing, Technology 0 thoughts on “Automation Is Not the Enemy: Systematizing Workflow in the Supply Chain”

Automation Is Not the Enemy: Systematizing Workflow in the Supply Chain

Authors: QProducts & Services Team, Under the Direction of Paul Yadron, Sr. VP of Sales

 

 

 

 

Imagine a world where automation comes together with technology to deliver products without much human intervention, if any. Historically, automation has been applied to virtual processes, such as auditing or reporting. However, the trends in automation are changing to reflect actions that function more like artificial intelligence. According to Supply Chain Management Review, “the last 25 years was all about who could make things cheapest, and the next 25 years will be about who can make things smartest.”

 

automation

 

What is Supply Chain Automation?

In essence, supply chain automation means utilizing technology to centrally manage a complex web of working parts. The goal in supply chain automation is to systematize part or all of a workflow in order to improve processes. Automating part or all of the supply chain has a number of benefits that can potentially reduce operating costs and increase revenue.

 

In traditional supply chain systems, the phases act as autonomous phases that have minimal visibility. According to BCI Supply Chain Resilience Report, 69% of companies don’t have complete visibility of their supply chain. On the other hand, supply chain visibility is among the top strategic priority of companies worldwide, according to GEODIS Supply Chain Worldwide Survey. With automation, the supply chain is streamlined from end-to-end, enabling all different phases and pieces of the supply chain to be managed in tandem.

 

 

robots in a warehouse

 

Automation is simply a piece of the “operational excellence” puzzle that so many organizations and supply chains strive for today. An extensive, 10-year study of 12,000 companies by The Harvard Business Review found that companies able to achieve a high standard of excellence delivered $15M in larger profits, 25% higher growth rate, and a 75% increase in productivity on average compared to other companies. In order to achieve this high standard of excellence, companies need to embrace automation. To achieve a high standard of excellence in the supply chain, there needs to be a clear definition of value. Supply chain excellence is a journey, not a project. The organizations driving success carefully define the supply chain strategy and the enabling technologies and processes. Technology should be implemented correctly, and the appropriate technology should be utilized. Other factors involved include having organizational alignment, consistent leadership, and strong capabilities in planning.

 

Historically, few of us would have included robots, artificial intelligence (AI), and the Internet of Things (IoT) in the supply chain automation lineup, but we should now as automation is further along than many may realize. For example, Rochester Drug utilizes autonomous mobile robots to pick items directly from shelves using suction cups before placing them in a tote. These robots were designed by IAM Robotics, who was recently awarded a patent for mobile piece-picking robots.

 

Additionally, DHL is testing collaborative robots that work alongside people to fill e-commerce orders in Memphis, TN. Locus Robotics, who supplies the robots, also uses them at their sister company, Quiet Logistics, for apparel order fulfillment.

 

In general, McKinsey estimates that only 5 percent of all occupations are likely to be fully automated. However, the consulting firm also expects that nearly half of worker activities can be performed by automation, especially robots and AI. Using data and the IoT, maintenance departments are now able to anticipate difficulties with various types of equipment moving and handling individual items or full pallet loads. As a result, unscheduled (and costly) downtime due to unexpected equipment failure is replaced by conveniently scheduled downtime for preventative maintenance.

 

From a supply chain perspective, according to Harvard Business Review, only 7 percent of manufacturing and service companies are using artificial intelligence to automate production activities, and only 8 percent are using AI to allocate budgets across the company while just 6 percent are using AI in pricing. However, according to Forbes Insights, the top priorities among supply chain organizations in 2018 were improving service quality, focusing on performance management, and investing in data analytics. So, where can organizations find the low-hanging fruit – applications of AI that won’t completely kill jobs but could present big benefits?

 

At QProducts & Services, we continue to develop cost saving solutions for transporting temperature sensitive commodities every day, with a game-changing line of proprietary passive thermal protection products.

 

About three years ago, QProducts invested in automation with state-of-the-art sewing machines to boost efficiency. Automation can be a scary word to skilled laborers, but once QPS employees understood the need for automation, they quickly got on board.

 

automation in a warehouseBenefits of Supply Chain Automation

The global supply chain is constantly growing and changing. Organizations are utilizing and should be utilizing the power of technology to help streamline operations for a more efficient, cost-saving process. Below, we’ll look at some of the major benefits that organizations can reap by choosing to automate their supply chain processes.

 

  1. Decrease operating costs
    1. Supply chain automation helps in the reduction of labor costs, inventory, warehousing, and overhead costs associated with inventory storage, including rent, labor, and energy costs. By maximizing production, labor costs and overhead costs are reduced.
  2. Increase productivity
    1. Optimizing the current resources with automation in the supply chain can enable “around the clock” work, allowing companies to gain more productivity. According to Altivate, companies can gain up to 20 percent more productivity in areas that have been automated.
  3. Increase volume
    1. For manufacturers, automation can increase the volume of product that can be produced. Automated technology combines the skills of trained workers with the accuracy of automated equipment, in turn increasing productivity.
  4. Improve accuracy
    1. Automation can reduce errors associated with manual processes such as data input, as well as help plan cost control by providing accurate, real-time information on inventory levels.
  5. Enhance time savings
    1. Through streamlining business processes, supply chain automation boosts time savings by reducing the time associated with implementing labor intensive tasks such as accounting, which saves manufacturers time and money.
  6. Refine compliance
    1. Automation can improve organization’s compliance with industry standards as it can standardize operations for employees and vendors, schedule routine asset maintenance, and track and trace the flow of products for full warehouse visibility.
  7. Advance data accuracy
    1. Automation can reduce errors associated with manual data entry and can also provide real-time visibility into warehouse management systems. In addition, paperwork can be eliminated, allowing organizations to make informed decisions about inventory, assets, and workforce with accurate and readily available data.

 

 

automation in beverage supply chain

 

Automation in the Food and Beverage Industry

Along the food and beverage supply chain, there are so many involved processes, workers, and touchpoints that it can be difficult to not only keep track of food, but also to monitor its quality. Automation can change that completely. For one, it provides end-to-end traceability. If a company has a contaminated shipment that was discovered too late, modern analytics and automation tools can be used to find exactly where the product is being shipped or where it originated from. This way, a massive health problem can be avoided before it even starts.

 

Secondarily, automation provides better quality control within the food and beverage industry. As we know, quality is of utmost importance in this industry. With the appropriate automation systems, defects and issues can be noticed much earlier in the supply chain. By detecting problems during packaging or processing, companies can cut down on the total number of problematic products that enter the market. If something along the supply chain is the culprit, automation can help detect it.

 

Although the food and beverage industry traditionally lacks behind in the adoption of new technologies and automated systems, the rapid advancement in technology and expectations of consumers and regulatory bodies has increased the demand for improved food quality and safety. According to Meticulous Research, the food automation industry is expected to be worth $14.3 billion by 2025.

 

internet of things in pharmaceutical industryAutomation in the Pharmaceutical & Chemical Industry

 

According to The Engineer, the pharmaceutical industry produces millions of tablets each week, all of which must be carefully reviewed before being packaged and shipped to distributors. Most pharmaceutical packaging systems use automation to manage bottle orientation, capping, and labeling. Automation of packaging also requires a system that monitors the operation on a supervisory level, checking for fallen bottles and low-level supplies. Overall, this helps pharmaceutical companies increase their productivity levels.

 

Operating in an intensely regulated market, pharmaceutical drug companies are increasingly making use of robotics to automate specific processes in drug development. Today, processes such as nuclear magnetic resonance (NMR) and high-performance liquid chromatography (HPLC) can have sample preparation carried out by robotic arms. Today, automated technology can be a great investment for the pharmaceutical and chemical industry. Return on investment often comes in the form of energy savings, flexibility, high-speed production, and increased quality.

 

Ian Webster, former Pharmaceutical Segment Manager for Burket Fluid Control Systems, stresses that “automated processes by their nature require less human intervention and, therefore, have less potential for errors. There is also a reduction in labor costs, leading to a more cost-effective manufacturing process.”

robots in a warehouseFinal Thoughts

Advancements in automation including artificial intelligence (AI), robots, and the Internet of Things (IoT) are changing the game across many industries, including the supply chain. Today, computers are far better at managing other computers and, in general, inanimate objects or digital information than they are at managing human interactions. However, automation alone isn’t going to help one organization dominate the entire market. Automation should not be viewed as our enemy, but rather a tool that can help organizations scale their business without scaling the associated chaos.

 

It seems clear that it is not a matter of “if” but “when” robots and other automated technology will be working in our distribution centers, warehouses, and manufacturing centers. Looking ahead, supply chain leaders should prepare their processes and infrastructure to embrace new technology and its ability to harness more data than ever before.

 

As automation continues to evolve and become part of the supply chain, I hope this information was helpful in answering some of your questions.

 

 

Air Cargo Security: Maintaining Product Quality & Preventing Threats

November 19th, 2019 Posted by Air, Food & Beverage, Pharmaceutical & Life Sciences, Transportation 0 thoughts on “Air Cargo Security: Maintaining Product Quality & Preventing Threats”

Air Cargo Security: Maintaining Product Quality & Preventing Threats

Authors: QProducts & Services Team, Under the Direction of Paul Yadron, Sr. VP of Sales

 

 

 

 

U.S. air cargo supply chain handles more than 50,000 tons of cargo each day, of which 7,500 (15%) is designated for domestic passenger carriers, and the remaining 85% is designated for all-cargo carriers, according to the Transportation Security Administration (TSA). Over the past 3-4 decades, air cargo transport has offered a means by which to expeditiously move cargo from points of production and manufacture to points of distribution and sales.

 

Major events over the last few decades have led to increased security measures for the air cargo supply chain, while also allowing us to learn about possible additional security threats and how to prevent them. The quick transport of products by air is especially important for perishable goods, as a major benefit of shipping goods by air is timing. So how do we secure these threats, and how do we maintain the quality of our products?

 

air cargo plane

 

 

 

What is Air Cargo Security?

 

First and foremost, the air cargo industry consists of a complex distribution network linking manufacturers and shippers to freight forwarders, off-airport freight consolidators, and airport sorting and cargo handling facilities where shipments are loaded on and unloaded from an aircraft. Under the Aviation Transport Security Act of 2004, air cargo is defined as goods, other than baggage or stores, that are transported by aircraft. Items shipped by aircraft generally consist of time-sensitive and high-value commodities. Common examples of air cargo include high-value machine parts and manufacturing equipment, electronic components for manufactured goods, consumer electronics, jewelry, and perishable items such as flowers, fruits, fresh fish, and pharmaceuticals.

 

Air cargo security measures aim to protect cargo from theft, but they also secure cargo against incoming materials such as bombs or drugs. Security is a very critical element of the air cargo supply chain. Regulators, organizations, and the industry overall are working together to further secure the air cargo supply chain while ensuring the flow of commerce.

 

palletized technology

 

Maintaining Air Cargo Product Quality

 

As we discussed, a major benefit to shipping items via air is time. The faster a product can get to its destination, the better. When it comes to food, beverage, and pharmaceuticals, these items cannot last very long in transit as the biggest challenge of keeping perishable products fresh has to do with temperature.  The longer an item stays exposed to high temperatures, the quicker it loses its freshness. We all know that temperature-controlled shipping is critical for delicate materials such as pharmaceuticals, medicines, and food.

 

For the pharmaceutical industry, the IATA (International Air Transport Association) Time and Temperature Sensitive Label became effective July 1st, 2012. This label ensured the integrity of the time and temperature of sensitive healthcare air cargo shipments and also ensured that the air cargo supply chain is prepared to handle the demands of these healthcare shipments. The overall aim is to ensure patient safety through effective cold chain distribution. Therefore, it is imperative that airlines, ground handling agents, and other stakeholders within the supply chain are familiar with the regulations and appearance of the label. It is also imperative that effective cold chain solutions are put into place to secure the successful air transit of healthcare products.

 

Unfortunately, one of the main costs with the transportation of perishable items such as fruit and vegetables is wastage due to spoilage related to inadequate temperature management during transit. Keeping perishable food items cool, cold, frozen, or deep frozen is the only way to guarantee product quality and shelf-life as it arrives at the end of a transportation process. Leveraging the proper cold chain equipment such as palletized technology can increase product shelf-life, increase profits, and reduce food loss.

 

security and protection for air cargo

 

 

Security Threats to Air Cargo

 

In the United States, security of air cargo shipments and international shipments to and from the U.S. is regulated by the Transportation Security Administration (TSA). Security threats can impact product integrity and create safety issues in certain markets. Security threats can damage the product altogether, resulting not only in lost product, but additional costs. Historically, security measuring surrounding all-cargo operations have focused on the threat of hijackings, particularly those that could result in using the aircraft as a weapon of mass destruction. According to the Congressional Research Service, a 1994 incident involved an off-duty FedEx flight engineer who attempted to hijack a FedEx DC-10 aircraft and crash it into the company’s Memphis, TN headquarters. At the time, there was no federal requirement to screen personnel or personal baggage carried aboard cargo aircraft. This particular hijack attempt was unsuccessful; however, the threat still remains in the air cargo industry.

 

Another security threat to air cargo includes the threat of explosives. A long-standing concern for cargo loaded on passenger aircraft, several incidents have shown that U.S. bound air cargo shipments are targeted. For instance, the Congressional Research Service reports that on October 29, 2010, intelligence and law enforcement agencies in Dubai, United Arab Emirates, and in the United Kingdom discovered explosive devices concealed in packages shipped as air cargo bound for the United States. Authorities in the U.S. were able to bring down the aircraft; however, the details of this incident highlighted a number of specific challenges to securing air cargo. First, the explosives were difficult to detect using explosive detection equipment and canines. Second, questions were raised regarding the implementation and effectiveness of risk-based targeting methods to identify suspicious cargo. And third, the multiple international airports and air cargo facilities that served as intermediate transfer points illustrated the highly interconnected nature of the international air cargo industry, which necessitates close collaboration and coordination among governments, forwarders, air carriers, and airport operators to address security.

 

While we don’t want to assume this threat, the “Insider Threat” still presents a threat to air cargo security. While shippers may have limited ability to target a specific aircraft or even predict if an item will move on a passenger aircraft or an all-cargo aircraft, insiders working in the air cargo industry could use their access and knowledge to carry out an attack. The Congressional Research Service states, “Historically, in the United States, air cargo supply chains have been infiltrated by organized criminal elements conducting systematic theft and smuggling operations. Overseas, there is growing concern that terrorist networks could infiltrate airports and air cargo operations to gather information about possible weaknesses and exploit vulnerabilities in the supply chain.”

 

Lastly, theft is a very real concern in the supply chain, including the air cargo supply chain. While cargo is more vulnerable to theft when hauled by a truck, cargo theft gangs are seeking opportunities to steal cargo from airports as some items shipped by air tend to be high value items. According to Air Cargo Eye, in February 2017, thieves escaped with rare 15th and 16th century antique books valued at more than $2.3 million after they broke into a facility at London’s Heathrow Airport. In March 2017, thieves were seen masquerading as police officers while using what were reported as police vehicles intercepting a cargo of $1.7 million of banknotes shortly after the aircraft had arrived at Johannesburg’s OR Tambo International Airport.

 

transportation security administrationPreventing Air Cargo Threats

 

Whereas the air cargo industry has favored risk-based approaches for both cargo planes and cargo placed aboard passenger aircraft, some policymakers have argued that more comprehensive screening of cargo is needed to make cargo security comparable to the screening of airline passengers and baggage. The 9/11 Commission Act of 2007 required 100% physical screening and inspection of all cargo placed on passenger aircraft. Acceptable screening methods include x-ray systems, explosives detection systems, explosives trace detection, TSA-certified explosives detection canine teams, and physical searches conducted in conjunction with manifest verifications. Cargo documents and known shipper verification are not acceptable screening methods.

 

While TSA has approved a number of detection systems for screening air cargo to meet the requirements of the 100% screening mandate, none of these devices have been approved for the screening of palletized or containerized cargo. According to the Congressional Research Service, it is estimated that palletized cargo makes up 75% of all cargo carried on passenger planes. The lack of an approved technology for screening pallets leaves the industry dependent on work-around solutions, largely involving the off-airport screening of cargo combined with approved supply-chain security measures to prevent tampering after the item is screened.

 

In regard to air cargo theft, organizations can take the following actions to help prevent theft in the industry:

  1. Thoroughly screen prospective employees
  2. Carefully select transportation partners and intermediaries
  3. Provide security training within your organization
  4. Incorporate surveillance into the duties of security guards, and have guards patrol away from perimeters
  5. Leverage technology such as equipment tracking, security seals, or locks
  6. Periodically conduct security audits

 

In addition to the organizations themselves being involved, various supply chain security measures provide options for preventing and detecting tampering while maintaining the integrity of the shipment. These measures include tamper-evident and tamper-resistant packaging, cargo tracking technologies, and identifiers to designate screened cargo.

 

air cargo packages

 

 

Final Thoughts

 

Today, thousands of products are being delivered by air freight. This service has made it possible for people and organizations around the world to have the goods needed for everyday life. Several industries have been able to grow internationally due to air freight, although there are challenges faced along the way.

 

The industry still faces the challenge of security threats and how to combat them to ensure the safety of the product and passengers. Technology continues to advance to screen cargo for these threats, and technology advances even further to maintain product quality and safety aboard an aircraft. The Federal Aviation Administration (FAA) forecasts that steady U.S. and world economic growth will drive more modest annual increases of about 3% in air cargo shipments over the next two decades. Innovation, education, and due diligence will continue to help the industry combat air cargo security.

 

As the air cargo supply chain continues to grow, I hope this information was helpful in answering some of your questions regarding air cargo, security, safety, and product quality.

 

 

 

 

 

 

Cold Chain Council for what should be on your whiteboard for2020-2030

Prepare Your Cold Chain for the Next Decade

November 12th, 2019 Posted by Pharmaceutical & Life Sciences, Technology, Temperature Protection, Update 0 thoughts on “Prepare Your Cold Chain for the Next Decade”

The Cold Chain transportation experts at QProducts & Services present the 5 innovations you should include on your cold chain whiteboard for 2020-2030.

 

 

 

 

Our annual gathering of industry leaders at the Cold Chain Council for the Pharma & Chemical Industries took place October 1st, 2019 in Chicago, IL. As a result, attendees left armed with knowledge to help them strategically plan their cold chain operations for the next decade. Thus, there are many things going on socially, logistically, and environmentally to be aware of, from blockchain to medical drone deliveries.

 

In summary, here are the top 5 innovations to put on your cold chain whiteboard for 2020-2030:

 

 

Additional information and resources in regard to these technological innovations is below:

Drones

Drones that deliver blood and medical supplies are saving lives as they provide faster, efficient care by supplying medicine, pharmaceuticals, vaccines, and emergency medical equipment. Drone delivery has begun to disrupt both the transportation and pharmaceutical and medical industries as they allow improved access to medical supplies, especially in rural areas. Learn more about how drone delivery and drone technology is shaping the future of these industries. For further information on this topic, please visit the following resources:

  1. Drones in Healthcare
  2. What is Drone Delivery and How is it Changing the Pharmaceutical Supply Chain?
  3. Drones Delivering Medical Supplies and More Can Help Save American Lives

 

Blockchain

The pharmaceutical industry is actively exploring blockchain technology to help with the tracking and tracing of products, product provenance, and supply chain governance. Blockchain technology also provides the opportunity to decrease costs and increase transparency and trust during clinical trials. Blockchain technology could be a major solution to a $450 billion U.S. industry. Read more about how blockchain is revolutionizing the pharmaceutical and medical industry. For further information on this topic, please visit the following resources:

  1. How Blockchain Will Revolutionize the Pharmaceutical Industry
  2. Pharma Meets Blockchain – Solution to $450 Billion U.S. Industry
  3. Five Use Cases for Blockchain in Pharma

 

Augmented Reality (AR)

Augmented reality holds the ability to visualize production processes, which could help to improve pharmaceutical manufacturing. However, the value of augmented reality not only lies in manufacturing, but in patient outcomes as well. Augmented reality is now being used to help reduce patient pain and anxiety levels in patients without the need for additional medication. Learn more about how augmented reality is transforming these industries. For further information on this topic, please visit the following resources:

  1. The Future is Mixed Reality: Augmented Reality Put to Work on Manufacturing
  2. 8 Benefits of Virtual Reality in the Pharmaceutical Industry
  3. Augmented Reality in Healthcare Will Be Revolutionary

 

IoT – Internet of Things

The pharmaceutical and medical industry is perfectly positioned to benefit from IoT, or the Internet of Things. The data collected can have a significant impact on the production and administration of pharmaceuticals, while helping to smooth logistics, eradicate recalls, and improve operational efficiency. Learn more about the IoT and its impact on pharmaceutical and medical. For further information on this topic, please visit the following resources:

  1. How is IoT Transforming the Pharmaceutical Industry?
  2. How Can the Pharmaceutical Industry Benefit from the IoT?
  3. How IoT is Revolutionizing the Pharma Industry

 

QProducts & Services extends their gratitude to the many industry experts that spoke at our event.

Together, our speakers educated attendees on how to best leverage the latest innovations for their 2020-2030 cold chain operations.

 

QProducts & Services is a manufacturer of passive temperature protection and cargo security solutions for the global supply chain. For over 25 years, they have developed innovative, cost-saving solutions for transporting temperature sensitive commodities. QProducts & Services has expanded their product line to include cargo security solutions and wireless temperature monitoring technologies. Manufactured just outside of Chicago, IL, their patented products are noted for durability, performance and reliability in protecting the integrity of shippers’ cargo throughout the supply chain.

Cannabis Disruption in the Pharma & Chemical Industry

October 18th, 2019 Posted by Pharmaceutical & Life Sciences, Transportation 0 thoughts on “Cannabis Disruption in the Pharma & Chemical Industry”

Cannabis Disruption in the Pharmaceutical & Chemical Industry

Authors: QProducts & Services Pharma & Chemical Team, Under the Direction of Jim O’Donnell

 

 

 

 

The recent and continuous growth of the cannabis industry has attracted many businesses to join in on this lucrative and evolving space. With the recreational use of cannabis now legal in 11 states, and medical marijuana legal in 33 states, cannabis is on its way to possibly becoming an $80 billion industry by 2030, according to estimates by Cowen, Inc. The explosive growth of this space in a short period of time has created a need for a new era of supply chain management to help adapt to new regulations, distribution models, and other challenges related to a highly regulated but thriving industry, according to Green Entrepreneur. In the pharmaceutical and chemical industries specifically, we’re experiencing the continuous rise of medicinal marijuana and new insights for Big Pharma and its supply chain.

 

What is Cannabis?

Cannabis, also referred to as marijuana, comes from a group of three plants with psychoactive properties: Cannabis sativa, Cannabis indica, and Cannabis ruderalis. When the flowers of these plants are harvested and dried, you’re left with cannabis, one of the most common drugs in the world. It is made up of more than 120 components, also known as cannabinoids, of which we can find cannabidiol (CBD) and tetrahydrocannabinol (THC). While THC is psychoactive, CBD is not, and you can find cannabis products that contain just CBD, THC, or a combination of both.

 

cannabis plant

Where Did CBD Come From?

 

Cannabidiol (CBD) is a compound extracted from hemp or marijuana. The 2018 Farm Bill excluded hemp from the definition of marijuana and removed it from the Controlled Substances Act (CSA).

 

CBD was first discovered by Dr. Roger Adams and his team at the University of Illinois in 1940, however, its structure was not made clear until 1963. While it may lead some to assume that CBD is a newly discovered ingredient, cannabis and CBD have a history that dates back thousands of years. According to CBD Origin, the first documented use of cannabis-derived medicine dates back to 2737 B.C. It can be said that Chinese Emperor Sheng Nung used a cannabis-infused tea to aid with a variety of ailments including memory, malaria, rheumatism, and gout. Throughout history, cannabis and CBD have been used for therapeutic purposes, however, during the rise of modern medicine, it was not recognized due to a lack of scientific evidence.

 

More recently, and with the legalization of medical marijuana, researchers have been prompted to dive more into CBD and its potential medicinal uses. While the stigma towards CBD and cannabis has changed over the last few decades in the United States, we are still in the early stages of research, legalization, and recreational use. However, with the federal legalization of hemp and hemp-derived CBD, more and more CBD products are being sold online by major retailers including Sephora and Neiman Marcus.

 

cbd oil

 

The Legalization of Hemp

 

The Agriculture Improvement Act of 2018, also known as the 2018 Farm Bill, was signed on December 20th, 2018, and will remain in force through 2023. The passing of the 2018 Farm Bill allowed the legalization of hemp agriculture and products in all 50 U.S. states. In the United States, hemp plants are defined as any cannabis plant that has 0.3 percent or less THC. Any cannabis plant that has a THC content greater than 0.3 percent is classified as marijuana. From a chemical composition standpoint, hemp cannot get you high.

 

According to Analytical Cannabis, the increased legality of hemp is largely to thank for the rapid acceleration in diversity and availability of hemp-derived CBD oil. Unless you go to a marijuana dispensary to purchase CBD oil, the CBD oil that you find is made exclusively from the hemp plant, which is also referred to as hemp oil or CBD hemp oil. Since CBD can be extracted from hemp, CBD is legal. However, there is still work to be done when it comes to FDA regulation. According to a leader of the U.S. Food and Drug Administration’s new cannabinoid work group, there is more research to be done before federal authorities can allow CBD treatments into food and beverage products. Just like any other new ingredient going into food or drugs, the FDA is unlikely to approve over-the-counter use without further research on the ingredient and its health benefits. With that being said, certain companies with a loyal customer base are likely to wait until CBD is FDA approved prior to marketing CBD products to consumers. While FDA approval is in the works, fortune 500 companies are educating themselves on the evolving market, investing heavily, and laying the groundwork within their networks.

 

The History of Medicinal Cannabis

 

Medicinal cannabis, also referred to as medicinal marijuana, has been widely known for its use in medical treatments and therapy, which has garnered national attention in recent years. While evidence suggests cannabis use more than 5,000 years ago in what is now Romania, there is only one direct source of evidence that cannabis was first used medicinally around 400 A.D. In the U.S., cannabis was widely utilized as a patent medicine during the 19th and early 20th centuries. According to Medical Daily, in the late 1700s, some American medical journals were suggesting using hemp seeds and roots to treat various health problems, including skin inflammation and incontinence. William O’Shaughnessy was an Irish doctor in the British East India Company who touted medical marijuana’s benefits for rheumatism and nausea in England and America.

 

The Marijuana Tax Act was the very first federal restriction of cannabis use and cannabis sale, taking effect in 1937. Subsequent to the act of 1937, legal penalties for possession of the drug began to increase in 1951 and 1956 with the enactment of the Boggs and Narcotic Control Acts. In 1970, prohibition under Federal Law occurred with the Controlled Substances Act and marijuana was classified as a Schedule 1 drug. Then, in 1996, California became the first state to allow legal access to and use of cannabis for medicinal purposes under physician supervision with the enactment of the Compassionate Use Act. According to Business Insider, medical marijuana is legal in 33 states in 2019. Medical Daily also states that only people with certain qualifications can obtain the drug. That will usually entail children with epileptic conditions, or sometimes cancer patients who use cannabis to ease the side effects of chemotherapy or radiation. Some states allow patients with HIV/AIDS, Parkinson’s disease, multiple sclerosis, or even Chron’s disease to obtain medical cannabis.

 

pharmaceutical cannabis

 

The Rise of Medicinal Cannabis

 

As restrictions are lifted and research into medical cannabis continues, more recent research has started to explore more of its therapeutic benefits. For instance, a 2015 study found that cannabis could be effective in treating schizophrenia. In addition, research has shown that the drug can help stop severe seizures and even cure migraines.

 

According to Harvard Health, the most common use for medical marijuana in the United States is for pain control. While marijuana isn’t strong enough for severe pain (for example, post-surgical pain or a broken bone), it is quite effective for the chronic pain that plagues millions of Americans, especially as they age. In 2014, a survey conducted in California found that medical marijuana patients agree that the drug works as 92 percent of them said that medical marijuana alleviated symptoms of their serious medical conditions including chronic pain, arthritis, migraines, and cancer. According to WebMD, the number of registered U.S. medical marijuana patients rose from more than 641,000 in 2016 to nearly 814,000 in 2017. In states where medical marijuana is legal, there seems to be somewhat of a general consensus that it is helpful in treating a variety of ailments. However, for more serious conditions, pharmaceuticals remain a necessity for patients.

 

medicinal cannabis

 

Disruption Within the Pharmaceutical Industry

 

Marijuana’s growing availability, both recreationally and medically, is impacting the pharmaceutical industry in various ways. First, the cost of healthcare could decrease for people who use marijuana as a treatment. This could reduce healthcare costs for the rest of the U.S., as well. However, lower costs also means less profits for doctors, hospitals, and the pharmaceutical companies. The reduced need for pain medications or even mental health medications is a great example of the current disruption occurring within these industries. According to Health Care in America, on average, in states where medical cannabis is legal, doctors prescribe upwards of 260 fewer doses of antidepressants and 560 fewer doses of anxiety medication than in other states, per doctor. A survey of more than 1,300 U.S. cannabis consumers, conducted by JAMA Internal Medicine, found that about 80% had used marijuana as a substitute for pharmaceuticals, primarily opioids. As Green Thumb Industries stated, “Every day, more and more patients are opting to use it as a replacement to traditional prescription medications that may cause unwanted side effects.” This presents the opportunity for pharmaceutical companies to invest in the medical marijuana market to develop products or participate in research.

 

Second, it’s important to note that other drug companies are starting to invest more time and money in cannabis research now that 33 states and the District of Columbia allow medical marijuana. For example, the pharmaceutical industry has sponsored more than 120 federal clinical trials involving cannabinoids, or chemicals that are unique to the marijuana plant. Additionally, GW Pharmaceuticals recently received federal approval for the epilepsy treatment Epidiolex, the first prescription drug derived from cannabis. Also, the Canadian marijuana company, Tilray, announced in December 2018 that they have signed an agreement to partner with Novartis subsidiary, Sandoz, to sell medical marijuana in countries where it is legal.

 

According to Investor’s Business Daily, companies ranging from small biotech stocks to giant pharma companies such as AbbVie are exploring cannabis medicine and what products can be derived from it. Many companies are in the startup phase, but hundreds of studies are underway on possible uses for cannabis. Additional companies working in cannabis medicine that are studying laboratory-created cannabinoids include Cara Therapeutics, Corbus Pharmaceuticals, Insys Therapeutics, and Zynerba Pharmaceuticals.

scientist measuring cannabis Challenges in the Supply Chain

 

In the U.S., California’s market is by far the largest in both geography and in the number of users regarding the cannabis industry. California distributors believe that they can develop reliable logistics to support the current cannabis market that would solve challenges across other regions, should cannabis become legal at the federal level. Currently, the nation faces the challenge of cannabis distribution as federal laws currently prohibit the transportation of cannabis across state lines. Because cannabis is illegal at the federal level, freight trucks that are regulated by the Department of Transportation are unable to carry cannabis. In addition to logistics operations, the cannabis industry still faces the stigma against the trade and the challenges that come with financial transactions as well.

 

As for medical marijuana, the same restrictions apply as medical marijuana is not yet legal in all 50 U.S. states. Changing national laws will make it easier to work with the cannabis industry in states where it is legalized, but the real breakthrough will be full, nationwide legalization that allows for interstate commerce.

 

pharmaceutical supply chain

 

Final Thoughts

 

The legalization of medicinal marijuana presents both opportunities and challenges for the pharmaceutical and chemical industry. For many pharmaceutical companies, the chance to service a market with predictable high margins is definitely a growth factor. If and when cannabis is removed from its Schedule 1 status, the flood-gates are expected to open even further.

 

As cannabis continues to have an impact on the pharmaceutical and chemical industry, I hope this information was helpful in answering some of your questions regarding the rise of medicinal marijuana and how it is expected to impact these industries.

Cannabis Disruption in the Food & Beverage Industry

September 17th, 2019 Posted by Food & Beverage, Transportation 0 thoughts on “Cannabis Disruption in the Food & Beverage Industry”

Cannabis Disruption in the Food & Beverage Industry

Authors: QProducts & Services Food & Beverage Team, Under the Direction of Kevin Lynch and Stephen Wozniak

 

 

 

 

The recent and continuous growth of the cannabis industry has attracted many businesses to join in on this lucrative and evolving space. With the recreational use of cannabis now legal in 11 states, and medical marijuana legal in 23 states, cannabis is on its way to possibly becoming an $80 billion industry by 2030, according to estimates by Cowen, Inc. The explosive growth of this space in a short period of time has created a need for a new era of supply chain management to help adapt to new regulations, distribution models, and other challenges related to a highly-regulated but thriving industry, according to Green Entrepreneur.

In the food and beverage industry specifically, we’re experiencing mainstream adoption from food and beverage companies, new and increased competition, and challenges in the supply chain.

 

What is Cannabis?

 

Cannabis, also referred to as marijuana, comes from a group of three plants with psychoactive properties: Cannabis sativa, Cannabis indica, and Cannabis ruderalis. When the flowers of these plants are harvested and dried, you’re left with cannabis, one of the most common drugs in the world. It is made up of more than 120 components, also known as cannabinoids, of which we can find cannabidiol (CBD) and tetrahydrocannabinol (THC). While THC is psychoactive, CBD is not, and you can find cannabis products that contain just CBD, THC, or a combination of both.

 

cannabis plant

 

Where Did CBD Come From?

 

Cannabidiol (CBD) is a compound extracted from hemp or marijuana. The 2018 Farm Bill excluded hemp from the definition of marijuana and removed it from the Controlled Substances Act (CSA).

 

CBD was first discovered by Dr. Roger Adams and his team at the University of Illinois in 1940, however, its structure was not made clear until 1963. While it may lead some to assume that CBD is a newly discovered ingredient, cannabis and CBD have a history that dates back thousands of years. According to CBD Origin, the first documented use of cannabis-derived medicine dates back to 2737 B.C. It can be said that Chinese Emperor Sheng Nung used a cannabis-infused tea to aid with a variety of ailments including memory, malaria, rheumatism, and gout. Throughout history, cannabis and CBD have been used for therapeutic purposes, however, during the rise of modern medicine, it was not recognized due to a lack of scientific evidence.

 

More recently, and with the legalization of medical marijuana, researchers have been prompted to dive more into CBD and its potential medicinal uses. While the stigma towards CBD and cannabis has changed over the last few decades in the United States, we are still in the early stages of research, legalization, and recreational use. However, with the federal legalization of hemp and hemp-derived CBD, more and more CBD products are being sold online by major retailers including Sephora and Neiman Marcus.

 

 

cbd oil structure

 

The Legalization of Hemp

 

The Agriculture Improvement Act of 2018, also known as the 2018 Farm Bill, was signed on December 20th, 2018, and will remain in force through 2023. The passing of the 2018 Farm Bill allowed the legalization of hemp agriculture and products in all 50 U.S. states. In the United States, hemp plants are defined as any cannabis plant that has 0.3 percent or less THC. Any cannabis plant that has a THC content greater than 0.3 percent is classified as marijuana. From a chemical composition standpoint, hemp cannot get you high.

 

According to Analytical Cannabis, the increased legality of hemp is largely to thank for the rapid acceleration in diversity and availability of hemp-derived CBD oil. Unless you go to a marijuana dispensary to purchase CBD oil, the CBD oil that you find is made exclusively from the hemp plant, which is also referred to as hemp oil or CBD hemp oil. Since CBD can be extracted from hemp, CBD is legal. However, there is still work to be done when it comes to FDA regulation. According to a leader of the U.S. Food and Drug Administration’s new cannabinoid work group, there is more research to be done before federal authorities can allow CBD treatments into food and beverage products. Just like any other new ingredient going into food or drugs, the FDA is unlikely to approve over-the-counter use without further research on the ingredient and its health benefits. With that being said, certain companies with a loyal customer base are likely to wait until CBD is FDA approved prior to marketing CBD products to consumers. While FDA approval is in the works, fortune 500 companies are educating themselves on the evolving market, investing heavily, and laying the groundwork within their networks.

 

 

hemp oil

 

Mainstream Adoption in Food & Beverage

 

Cannabis-infused food and beverages are becoming a major trend as legalization grows across the country. According to Green Market Report, consumers in California purchased $180 million worth of cannabis-infused food and drinks in 2016, which rose to 18% in 2018. In Washington, sales of cannabis-infused treats increased 121% in 2016, and since Colorado first allowed recreational cannabis use, sales tripled from $17 million in the first quarter of 2014 to $53 million in the third quarter of 2016. Dixie Elixirs, a Colorado-based company that sells cannabis-infused products such as truffles, chocolate bars, mints, and juices, was one of the first companies to enter the market.

 

According to Food Institute, it is rumored that the Coca-Cola Company is reportedly in talks with Aurora Cannabis about developing cannabidiol-infused beverages, and is said to be particularly interested in drinks that can ease inflammation, pain, and cramping. Pepsi and Starbucks have indicated that they are monitoring developments, however, they have no plans at this time to pursue cannabis based or infused beverages. Furthermore, some major players including Constellation Brands, Molson Coors Brewing, and AB InBev have already invested in CBD and THC-infused non-alcoholic beverages. Given the mainstream adoption by many organizations, certain companies are reluctant about getting into CBD-infused products, even where they are legal. Many wonder if the products will harm their reputation or if they will be well-received by customers.

However, the data tells us that those apprehensions could likely be proven wrong. According to a study from A.T. Kearney, 30% of Americans are willing to try a cannabis-infused non-alcoholic beverage, and 17% would be interested in an alcoholic drink containing the substance.

 

Similarly, alcohol consumption is declining globally, and consumers are moving away from sugar-filled drinks in favor of healthier alternatives. More recently, New Age Beverages announced that it aims to release a line of CBD-infused drinks under the Marley Mellow Mood brand. While a market for non-alcoholic cannabis-infused beverages is emerging, this could lead to a disruption of the beverage market as new product lines are released and marketed as health drinks. Overtime, products using CBD as an ingredient could be considered part of the health and wellness space.

 

Although there is an emerging market for non-alcoholic cannabis-infused beverages, the wine industry has also started to develop cannabis-infused wines. California-based Cannavines has already released two CBD-infused wines: Red Blend x Headband and Chardonnay x Sour Diesel.

 

 

cbd infused beverages

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New and Increased Competition

 

The explosive growth of cannabis has caused companies across the food and beverage industry to take notice. The legalization of cannabis presents a “once-in-a-generation” opportunity for food and beverage companies to take action and establish themselves as dominant players in a competitive market. As certain organizations are exploring the market and learning about the value cannabis can have on their business, investors seem to be getting in on what some are calling “The Green Rush.”

 

Constellation Brands is already positioning themselves by taking advantage of the opportunity as they announced as of October 1st, they would acquire a 9.9% minority stake in Canopy Growth, a Canadian marijuana company. The $191 million deal will allow Constellation Brands to develop cannabis-infused beverages and not only stay ahead of evolving consumer trends, but stay ahead of the competition as well. According to The Wall Street Journal, Rob Sands, Constellation Brands’ CEO, stated that he doesn’t consider marijuana a serious threat to the beverage space, but that Constellation isn’t going to “stand around twiddling its thumbs” as the market grows.

 

According to the New York Business Journal, cannabis company Elev8 Brands Inc. recently purchased New York-based distributor YP Natural Inc., which distributes mainstream, non-CBD natural brands including Mondelez-owned Tate’s Bake Shop. The move is in an effort to expand their distribution and work to bottle their own brand of iced tea infused with CBD. Additionally, cannabis company Newstrike Brands Ltd. struck a deal to create co-branded edibles with Canadian specialty foods company Neal Brothers Inc., with the goal of creating cannabis-infused beverages. Across the U.S. and Canada, this expansion presents the potential opportunities for food and beverage companies to enter the market or possibly encounter increased competition within a new market.

 

 

cannabis green rush

 

Challenges in the Supply Chain

 

In the U.S., California’s market is by far the largest in both geography and in the number of users regarding the cannabis industry. California distributors believe that they can develop reliable logistics to support the current cannabis market that would solve challenges across other regions, should cannabis become legal at the federal level. Currently, the nation faces the challenge of cannabis distribution as federal laws currently prohibit the transportation of cannabis across state lines. Because cannabis is illegal at the federal level, freight trucks that are regulated by the Department of Transportation are unable to carry cannabis. In addition to logistics operations, the cannabis industry still faces the stigma against the trade and the challenges that come with financial transactions as well.

 

The Wall Street Journal states that for more than 20 years, since California legalized cannabis for medicinal use in 1996, growers or cooperatives handled the delivery of their products to end users themselves. C4 Distro, a new cannabis distribution company, has already begun to implement a modern, advanced supply chain to California’s cannabis industry. Similar to beer distribution, manufacturers deliver their products to C4’s facilities where testing and taxes are handled. Then, the products are deployed to stores via the sales team, delivery teams, and trucks. However, alcohol is a legal product at the federal level while cannabis is not. Also, operators that serve other industries must be licensed specifically to handle cannabis, and those facilities would need to comply with state regulations. More recently, all cannabis goods for sale in California must be tested at licensed labs and have labeling showing the amount of THC in the product and must be sold in child-proof packaging.

 

Jennifer Lee, Partner and Cannabis Leader for Consumer Advisory and Analytics at Deloitte, stated “Most current and likely cannabis consumers want a variety of products offered at reasonable prices from suppliers who can vouch for the safety and origin of those products. Cannabis companies will need to have secure supply chains to protect the quality and integrity of their products, and retailers will need to meet consumer expectations, including providing a positive, engaging retailing experience and protecting the privacy of their customers, especially online.”

 

However, in many ways, the supply chain developing around legalized marijuana in California could lay the groundwork for an effective supply chain if cannabis were to achieve legalization at the federal level. The companies in California that are currently building a “cannabis superhighway” throughout the state similar to beer distribution could become well-positioned to handle logistics, merchandising, and compliance during the process while the drug is not fully legalized throughout the nation yet. In the future, it’s possible that we could see cannabis become a major part of the food and beverage supply chain, specific to alcohol, due to the involvement throughout the distribution process.

 

cannabis production

Final Thoughts

 

While there is increasing acceptance, there is still a need for education in the cannabis market. Due to the state by state legalization in the U.S., we have the opportunity to learn what is needed for a successful supply chain and we can also learn what could go wrong on a smaller scale.

 

For many organizations, the combination of existing profitable operations, advanced technology, and the prospect of gaining market share is exciting and presents many growth opportunities in an evolving market. From a supply chain perspective, businesses should be prepared and educated on the impact that cannabis could have on the food and beverage space specifically. From mainstream adoption by some of the major players to challenges and growth in certain states, companies have the opportunity to make the right moves ahead of the competition.

 

As cannabis continues to have an impact on the food and beverage industry, I hope this information was helpful in answering some of your questions regarding our supply chain, competition, and an outlook on the market.

What’s On Your Supply Chain White Board for 2020?

September 9th, 2019 Posted by Pharmaceutical & Life Sciences, Technology, Update 0 thoughts on “What’s On Your Supply Chain White Board for 2020?”

Top pharma executives and supply-chain tech experts to gather in Chicago for 4th Annual Cold Chain Council meeting


 

 

 

 

October 1st in Chicago’s’ Museum Campus district will mark the 4th Cold Chain Council for the pharma, healthcare and chemical industries. This educational forum will feature panel discussions and presentations by top executives and tech experts discussing the new decade ahead, trends in supply chain tech and best practices for 2020.

 

With a key focus on furthering the industry and advancing best practices in the supply chain and cold chain respectively, the main goal of the Cold Chain Council is to bring together high-level industry professionals to share in thought leadership and create a casual platform for discussion of real world challenges and solutions derived from everyday experiences of speakers and attendees alike. Hosted by QProducts & Services, there are no other sponsors, no fee to attend, and attendance is capped to provide an informal and informative feel for one afternoon in Chicago.

 

Amy ShortmanThis year’s event will be moderated by Amy Shortman, a senior executive at Overhaul Group. Her keynote will set the scene for the day’s discussion on how technology will affect traditional supply chains, the scope of our working environment and the benefits that may arise. Amy’s expertise stems from more than twenty years of pharmaceutical logistics experience. A Chartered Fellow of The Institute of Transport and Logistics, Amy has become a well-known thought leader in education and brand awareness to the healthcare and logistics industry’s need for improved compliance and cool chain management, backed by her professional career including roles in operations for a global logistics provider of clinical trials, a world-leading temp-controlled container company, supply chain security for a “Top 3” third-party logistics provider and eventually establishing a global supply chain business services company, ASC Associates Ltd, specializing in high-value and temp-sensitive freight.

 

(for Amy Shortman’s full bio click here)

 

Amy will be in good company with an impressive line-up of industry experts hailing from a diverse group of companies: Big Pharma shippers AbbVie and McKesson; the World Federation of Hemophilia; computer-aided environment-software developer Smart CAE; smart technology manufacturers SensorTransport Inc and Berlinger USA; and advanced predictive risk-analysis software developer Riskpulse. Session topics have been locked in and speakers are teaming up to lead discussions in what promises to be an informative afternoon of interactive discussion and networking. The setting overlooks Chicago’s museums and lake front to the East and impressive skyline and Grant Park to the North. Here’s a taste of the agenda and talented roster:

 

Session One: Wild Weather and Adapting to The New Norm. Lane Analysis and Risk Visibility Through Advanced Forecasting and Data Analytics. Mark Russo, SVP of Weather Operations, Riskpulse

 

Session Two: Cold Chain Tech 2020. Service, Equipment and Qualification Innovations for The New Decade.
Stefan Braun, Managing Director, Smart CAE and Stephen Dusel, Sales Manager North, Berlinger USA

 

Session Three: Big Pharma Cold Chain Report. What’s New as We Look Ahead into The Twenties?
David Ulrich, QA Director of Global Supply Chain Compliance, Abbvie and Georgios Ampartzidis, Logistics Manager-Humanitarian Aid, World Federation of Hemophilia

 

Session Four: Digitization and IoT’s Continuing Impact on the Supply Chain. Michael Dee, VP of Global Security, McKesson; Amy Shortman, Director of Product Marketing, Overhaul Group Inc.; and Sascha Peyer, Co-Founder and CCO, SensorTransport, Inc.

(Full event details here)

Cold Chain Council Chicago

 

The afternoons’ sessions conclude with an interactive discussion between attendees and speakers, including an opportunity for Q&A before wrapping up and moving on to the evenings festivities.

 

The networking portion of the Cold Chain Council agenda includes cocktails and dinner reception at the Chicago Yacht Club followed by a private yacht cruise down the Chicago River at nightfall.

 

 

 

For more information on content and key takeaways from this event, connect with event hosts QProducts & Services on LinkedIn or visit the Cold Chain Council homepage for other CCC events and an opportunity to attend.

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