Supply Chain: The role of technology for Bio Pharma

– Part I

Within the Bio Pharma sector, companies embrace the challenge of sustainability and responsible business, with a heavy focus on how the industry can better engage, monitor, and improve its relationship with suppliers and manufacturers. It is understood across the industry that environment, safety, and social outcomes are critical. Ultimately, we are all patients when it comes to the production of pharmaceutical drugs.

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Edin Osmanovic
Head of Supply Chain Solutions DACH

Keen to get under the skin of issues impacting the supply chain in Bio Pharma, and to understand more clearly the role that technology plays, I was privileged to be part of a Digital Think Tank roundtable discussion with some of the leading lights from the industry.  I would like to share the top ten takeaways with you in the upcoming three articles.

Improving collaboration is long overdue in Bio Pharma

In today’s increasingly digitised world, there are new technologies being deployed across the life sciences industry all the time. These include AI, digital twinning, data analytics, and more. One of the big challenges is understanding how these technologies can be used within the Bio Pharma supply chain. But the challenge here is not the adoption of those technologies, it is bringing the people within organisations and beyond organisational walls together to implement and use them. There certainly needs to be more cross-industry pollination of ideas around utilising technology. According to one participant we keep reinventing the wheel, when the wheel is already out there. So how do we better leverage tech across the industry? The new hybrid environment has not only enabled flexibility, it is also encouraging more collaboration. In the past organisations were guilty of cocooning themselves within the walls of their company, but today more knowledge sharing is a positive step for the industry.

However, creating better skills velocity and digital training to adapt to new technology is a challenge, as well as determining how the industry should adapt and reshape processes based on new technology.

The safety and security of the supply chain is critical in Bio Pharma, as mass-produced drugs are used by society. While patients need medicine in a timely fashion, quality is the watchword, and drugs must have the right raw materials and ingredients. One recent example of a lack of materials is the COVID-19 booster vaccines and the shortage of syringes which presented a challenge for drug distribution. So how should Bio Pharma companies contend with supply shortages? Here, all agreed that suppliers must be treated as key partners. A Bio Pharma company can make a vaccine in six months, but there must be enough available raw materials both up and down the supply chain for it to be effectively distributed.

Transparency and flexibility across the supply chain are essential

To better understand raw material requirements data analytics and predictive analytics play a vital role, alongside technologies such as agnostic self-planning supply chain tools where AI comes into the equation. 

COVID-19 highlighted how fragile the supply chain was and how the focus for relationships with suppliers in the past was all about cost reduction and lowering inventory models. However, when clinical products are being trialled, the Bio Pharma industry must wait on the results from these studies before moving into mass production. These trials could be inconclusive, which may mean more clinical studies need to be done. This makes managing inventories and forecasting incredibly challenging.

During that process, technology can help manage overall stock and inventory levels, providing the required flexibility. IT solutions like the Blue Yonder Luminate Control Tower, for example, enable organisations to aggregate all this information to manage what they can’t see and plan for what they don’t know, providing dynamic, real-time visibility, with an AI/ML backbone to power end-to-end visibility of the supply chain.

Understand the risks associated with distribution

All agreed that COVID-19 taught the industry that focusing on cost reduction and lowering inventory levels is risky for large-scale health challenges like the pandemic. Going forward, Bio Pharma companies must make decisions around inventory by determining the level of distribution risk associated with key products. This will, of course, be dependent on the product and influence all decisions, such as the location of its production, for example. Not all of those decisions will be made on the sole economic basis of profitability. It may be the case that Bio Pharma companies need to accept slightly higher costs for certain products, knowing that they have lowered the risk of non-delivery of a particular drug to market.

Part II is about to follow.

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