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Adoption of wireless sensoring for pharmaceutical logistics: a case study on the adoption of an inter-organizational system by competing, mutually dependent actors within a logistical value chain

Haan, Georg-Hendrik (2012) Adoption of wireless sensoring for pharmaceutical logistics: a case study on the adoption of an inter-organizational system by competing, mutually dependent actors within a logistical value chain.

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Abstract:Pharmaceutical goods are of high value and highly sensitive to temperature. This is why they are transported in a cold chain: a logistical value chain where every logistical service provider (forwarder, carrier, handling agent) takes precautions to keep the temperature of the goods within a specified range. However, this cold chain often fails: research by the World Health Organization and others show that due to temperature control issues, up to a third of vaccines do not survive the transport from origin to destination, while this transport may form up to 80% of the vaccine costs. Wireless sensoring is a technology that allows real-time and continuous monitoring of the temperature of pharmaceutical shipments. By automatically notifying supervisors of dangerous changes in temperature before the goods are damaged, individual shipments can be saved, and flaws in transport processes improved. This does require cooperation and information sharing between logistical service providers. By adopting wireless sensoring, logistical service providers increase their value proposition to clients, as is agreed to by forwarders and carriers alike. Yet, the adoption of this technology develops slowly, and meets resistance from those same stakeholders. This forms a paradox that is researched by means of case study at one adopting forwarder, one (for now) non-adopting carrier, and a sensoring technology provider. Results show that the adoption of wireless sensoring requires development of a strong organizational culture aimed at removing all temperature deviations from the transport process; and, a sufficiently developed level of trust between forwarder and carrier to use wireless sensoring for mutual quality improvement instead of liability allocation and individual gain; further, the significant organization that is required for the coordination of reuse of sensors is a deterrent; also the adoption decision for a single trade lane is fragmented over many stakeholders while these stakeholders may have invested in different incompatible sensoring technologies, as there is yet to emerge a dominant technology or standard. Finally, the analysis shows that wireless sensoring allows multiple business models, the currently proposed one of which is more advantageous to forwarders than it is to carriers. Recommendations to the participating air-carrier are firstly to start testing with wireless sensoring as it will take time to develop the experience required for managing continuous public scrutiny of process quality; secondly, to cultivate trust in relationships with partner forwarders of equal ambition levels to allow focus on mutual improvement instead of liability allocation; and thirdly to delay adoption of wireless sensoring with non-partner forwarders until a more equally advantageous business model of wireless sensoring is available. Recommendations to the participating wireless sensoring technology provider are firstly to continue research into founding a trusted service provider, as it may mitigate the adoption delaying factors regarding stakeholder trust, the fragmented technology landscape, and the organization of sensor reuse, and allow a business model equally advantageous for forwarder and carrier; secondly to provide guidance to clients in developing their organizational culture and skills required to perceive wireless sensoring as a necessity.
Item Type:Essay (Master)
Clients:
Dinalog
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Information Technology MSc (60025)
Link to this item:http://purl.utwente.nl/essays/62166
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