The EDI Revolution: Powering Your Pharmaceutical Business Lifecycle 


December 20, 2023

When starting out, pharmaceutical companies generally rely on Third-Party Logistics (3PL) providers to manage the logistics of their products, and many 3PLs serve as a one-stop shop, providing EDI services in addition to logistics. However, companies tend to outgrow the need for 3PL services as they expand and mature. When that happens, businesses need a reliable EDI provider that understands the industry and can send data effectively and efficiently. 

Pharmaceutical manufacturers in North America are increasingly turning to 3PLs to address various supply chain and logistics challenges. Here are the top five areas that 3PL services help manage pharmaceutical supply chain processes throughout the business lifecycle:   

1. Inventory Management 

3PLs offer advanced inventory management solutions, including real-time tracking and visibility of pharmaceutical products. Manufacturers benefit from optimized inventory levels, reduced stockouts, and improved order accuracy. 

2. eCommerce Fulfillment 

With the growth of eCommerce in the pharmaceutical industry, 3PLs assist manufacturers in fulfilling direct-to-patient orders, including prescription medications, over-the-counter products, and medical devices.   

3. Logistics, Risk Management, & Regulatory Compliance 

The pharmaceutical industry deals with several unique supply chain challenges, and ensuring you are shipping products safely and complying with regulations is critical to your operations. Here are some of the most common tasks that 3PLs are helping to manage and that EDI can further assist with. 

Cold Chain Logistics 

Many pharmaceutical products, such as vaccines and biologics, require strict temperature control throughout the supply chain. 3PL providers specialize in managing cold chain logistics, ensuring that temperature-sensitive products are stored, transported, and delivered within specified temperature ranges. 

Reverse Logistics 

Managing product returns, recalls, and expired goods is critical in the pharmaceutical industry. 3PLs can efficiently handle reverse logistics processes, ensuring the proper disposal or restocking of returned or expired products. 

Risk Management 

3PL providers can help mitigate supply chain risks, including disruptions, by offering contingency planning, alternative sourcing, and disaster recovery solutions. 

Regulatory Compliance 

3PL providers understand the complex regulatory environment governing pharmaceuticals. They assist manufacturers in meeting regulatory requirements related to storage, transportation, and distribution, including compliance with Good Distribution Practices (GDP). 3PLs invest in quality management systems and procedures to maintain product integrity and safety, and conduct rigorous quality checks and inspections to ensure compliance with industry standards.  

4. Distribution, Transportation & Freight Management 

Pharmaceutical companies often outsource warehousing and distribution functions to 3PL providers. 3PLs operate strategically located warehouses, ensuring timely delivery of pharmaceutical products to distribution centers, hospitals, pharmacies, and other points of care. This helps manufacturers reduce transportation costs and improve supply chain efficiency.   

3PLs handle the transportation of pharmaceutical products, including route optimization, carrier selection, and freight management. They leverage their expertise to ensure safe and compliant delivery while controlling costs.   

5. Customized Solutions, Data and Analytics & Market Expansion 

3PLs tailor their services to meet the specific needs of pharmaceutical manufacturers. This includes creating customized packaging, labeling, and kitting solutions to facilitate order fulfillment and reduce processing time.   

They also provide pharmaceutical manufacturers with data analytics and reporting tools that offer insights into supply chain performance, demand forecasting, and cost optimization. This data-driven approach helps manufacturers make informed decisions.  

As pharmaceutical companies expand into new markets, they often rely on 3PLs with global networks to provide distribution and logistics support, navigating international regulations and customs procedures.  

How EDI Helps Facilitate Processes with 3PL Providers 

Electronic Data Interchange (EDI) plays a crucial role when a pharmaceutical manufacturer partners with a Third-Party Logistics (3PL) provider. It facilitates seamless communication and data exchange between the manufacturer and the 3PL, including: 

  • Inventory management – product quantities, transit status, and warehouse locations to maintain accurate inventory levels and optimize supply chain operations. 
  • Purchase orders – digital order information reduces errors and speeds up the order-to-fulfillment process. 
  • Invoicing and billing – electronic invoicing with details about services rendered, storage fees, transportation costs, and any applicable charges streamlines the payment process and reduces paperwork.   
  • Reverse logistics – return or recall information communicated promptly to the manufacturer to resolve. 
  • Quality control – inspection results and quality data to ensure that products meet quality standards before reaching the market. 
  • Shipping, receiving, and tracking notifications – advanced shipping notices (ASNs) or shipping confirmations providing real-time updates and visibility into the status of orders. 

Since the pharmaceutical industry is subject to stringent regulatory requirements, EDI assists in complying with regulations such as Good Distribution Practices (GDP) by providing an auditable electronic trail of transactions and data exchanges, and EDI systems often have robust security measures to protect sensitive data, ensuring data confidentiality and integrity. Additionally, using standardized EDI formats and protocols provides seamless integration between the manufacturer’s and 3PL’s systems, including ANSI X12 and EDIFACT.   

Both the manufacturer and the 3PL can use EDI-generated data for reporting and analytics purposes. This data can be analyzed to identify trends, improve operational efficiency, and make informed decisions about supply chain optimization. The visibility acquired through the digital transmission of this fundamental data allows collaboration between the 3PL provider and the manufacturer, enabling the manufacturer to adequately forecast demand, manage inventory and production schedules, and meet customer expectations.  

Combining EDI and 3PL for the Pharmaceutical Industry 

Pharmaceutical manufacturers benefit from partnering with 3PL providers to optimize their supply chains, reduce operational costs, enhance compliance, and meet the unique challenges of the pharmaceutical industry. These partnerships enable manufacturers to focus on core competencies such as research and development while relying on 3PL experts for efficient logistics and distribution solutions. 

When combined with EDI, 3PL providers can further improve their relationship with pharmaceutical manufacturers by enhancing communication to facilitate the exchange of crucial data. TrueCommerce EDI supports 3PLs and their customers, delivering streamlined supply chain processes and ultimately contributing to more efficient and effective logistics and distribution operations in the pharmaceutical industry.  

When It’s Time to Move Beyond 3PL 

As pharmaceutical manufacturers grow, they tend to bring supply chain operations in-house. Even as they become more proficient in managing their supply chain, EDI is a necessity for the smooth transfer of data. Finding a reliable EDI provider that understands the industry along with ERP and system migrations is vital when shifting away from a 3PL utilized as a one-stop shop for EDI. This partnership ensures seamless integration that can grow with the organization. 

Whether you operate a 3PL business, fulfill orders using a 3PL, or are moving beyone 3PL, contact us today to learn more!   

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