Ironically, the dreaded imperative to serialise has turned out to be one of the major reasons that digital potential is being realised, thanks to the enforcement of regulations worldwide.
Because serialisation by its very nature involves the production and dissemination of huge amounts of data, companies are learning the value of harnessing this data for purposes far beyond what was originally intended.
Visionary companies have begun to recognise the value of digitising supply chains to attain a strong competitive advantage.
Not only has digitisation helped them to achieve greater operational speed, efficiency and productivity, it’s also helped them to fulfil their grander mission of improving the lives of patients by ensuring a safer and more expedient supply of pharmaceutical products.
A good gateway drug
Just for fun, I’m likening serialisation to a “good” gateway drug, because, thanks to the tremendous amount of data it generates, it opens the door to more experimentation and, ultimately, to more efficient operations, not to mention safer and better drug production.
What’s more, the time to experiment with this gateway drug is now. With worldwide serialisation deadlines fast approaching — November 2018 in the US (DSCSA) and February 2019 in Europe (FMD), the time is ripe.
The challenge, of course, is to figure out how to most effectively use the reams of data generated by serialisation. Transforming this data into smart digital initiatives may ultimately open the door towards fundamentally transforming the way business is done.
Digital innovations have the potential to transform pharma operations. According to a paper published by PricewaterhouseCoopers, digitisation holds tremendous potential to help the pharma industry adapt to many of the growing challenges it faces with regard to operations and the supply chain.1 These challenges include
- a global market requiring companies to operate across geographies with an increasing number of SKUs, which makes supply chain management, regulatory compliance and lifecycle management more complex
- a higher number of supply chain partners than ever before, making integrated planning across the network difficult and hindering real-time decision making
- increasingly competitive price and cost pressures, requiring more efficient operations and supply chain management
- more complex product portfolios and an increase in personalised medicine call for greater customer and supply chain segmentation, challenging companies to produce low volumes efficiently
- a growing risk of counterfeit drugs demands greater transparency and tracking in the value chain so companies can better monitor the supply chain
- a need for better quality control and more visibility because of rising regulatory scrutiny around the world.
Formidable challenges indeed. But digitisation holds great promise to address these challenges, primarily through the emerging technologies that come under the umbrella of Industry 4.0 — a collection of tools and processes that enable smart, decentralised production via intelligent factories (often called digital factories), the Internet of Things (IoT), mobile communications, advanced analytics (big data), the cloud and flexible, highly integrated manufacturing systems.
However, a study published by McKinsey & Co. concerning digitisation trends in several industries shows that this much-needed technological transformation is still in its fledgling stages in the pharmaceutical industry.2 In fact, pharma ranks next-to-last among the sectors surveyed, finishing ahead of only the notoriously slow-to-act public sector. Pharma, then, has a long way to go. Let’s look at some of the tools necessary to place the industry on a proper path to digitisation.
Tools of the trade
The IoT and beyond: sensors placed throughout the supply chain can help to transmit information in real-time, providing insights that help sales and operations leaders respond faster and more appropriately. Through digitisation and analytics, it is also possible to reduce downtime.
Digitisation shows the potential to reduce downtime in pharma plants by 30–40%. Monitoring systems such as the OEE Tracker offered by Supply Chain Wizard have proven highly effective in helping to identify and improve operational efficiency.
Additionally, advanced analytics, big data and the cloud are all proving to be formidable in helping to integrate data and transform it into actionable metrics. Because pharma companies have such complex supply chains, cloud-based networks make it easier to link multiple players through a single integrated network.
Automation and digitisation can also help to deliver manufacturing efficiencies through such innovations as 3D printing. Advanced robotics and augmented reality hold great promise to improve human-machine interactions.
Although these new tools and technologies can lead to impressive advances, at Supply Chain Wizard we stress the importance of incorporating them into a well-planned strategic approach.
Digital innovations need to be introduced thoughtfully and carefully — and tailored to specific needs and requirements — as there is no one-size-fits-all solution. Not that there isn’t room for trial pilot projects; in fact, thoughtful experimentation will likely prove useful for moving the digital train forward.
Transparency, visibility and collaboration
Transparency is vital to successful digitisation initiatives, as increased visibility into supply chain operations helps to drive better and faster decisions, and improve operational processes. In becoming more adaptive and responsive, companies can improve planning accuracy, manufacturing efficiency, productivity and inventory control.
When information is visible across a network, all entities are better positioned to avoid overages and shortages within their own supply — and are then better equipped to reduce cycle times and optimise inventory for the end product.
And, because there are so many stakeholders, both within the walls of pharma companies and outside of them, teamwork is crucial. Within companies, digital initiatives require assembling cross-functional teams of experts, commitment to the capitalisation of projects and, when advisable, working with experienced consultants who have guided others through the process.
Beyond that, collaboration with partners is critical to develop truly integrated end-to-end supply chain solutions.
Test runs toward broader implementation
Pilot projects can be a great way to get started. My company has spearheaded several promising digitisation initiatives, including the following:
- an Overall Equipment Effectiveness (OEE) tracking system to counteract a drop in OEE (%) owing to serialisation implementation for a leading contract and development and manufacturing organisation (CDMO)
- tracking drugs in real-time with IoT sensors to ensure efficacy and delivery to all appropriate partners for a well-known non-profit organisation
- developing mobile tracking solutions to improve patient and hospital engagement, as well as supply chain visibility, for a brand owner
- a digital collaboration platform to improve project management efficiency and visibility for a prominent generics manufacturer.
Conclusion
Although the significant challenges that digitising the supply chain brings cannot be ignored, it’s more critical to focus on the benefits that it brings and the guaranteed loss of competitive advantage likely to ensue if ignored.
Digitisation makes supply chain optimisation possible and allows us to imagine a future when performance can be analysed through every step of the testing, manufacturing and distribution process — as well as the ability to forecast and respond to demand in real-time.
In helping to ensure visibility across the entire supply chain, digitisation offers the potential to lower overheads and increase production without sacrificing speed or quality.
Once again, with serialisation deadline enforcement just around the corner, both here and in Europe, the time is ripe to get a greater return on the serious investment companies are making in expensive serialisation solutions.
Keep in mind that the best solutions are hardware agnostic and that you can mine the troves of data generated by serialisation to improve operations, increase efficiency and financial performance … and ultimately serve patients better.
References
1. www.strategyand.pwc.com/reports/digitization-in-pharma.
2. www.mckinsey.com/industries/pharmaceuticals-and-medical-products/our-insights/closing-the-digital-gap-in-pharma.