Why ‘real-time-all-the-time’ supply chain operations are fundamental to biopharma success
Today’s technology-driven, “Amazonized” economy demandslevels of agility that enable companies to flex, respond, and innovate faster than ever to market and supply chain dynamics. A significant challenge to optimizing agility is that the flow of information often comes from systems that are set up for longer-term planning cycles, not plans that change by the hour, or even second. The cost of inaction is huge—a single prolonged production-only shock is likely to wipe out up to 50% of one year’s earnings before interest, taxes, and amortization (EBITA). However, pivoting from “point-in-time” to “real-time” supply chain operations requires a different way of thinking. It requires a method of continuous realignment between planning and real-time operations, constantly ingesting data, and updating what’s happening on the ground with what was initially desired.
This shift is more urgent than ever for pharma and life sciences companies, and not only is it needed, it’s mandated for patient safety. As a result, many areas of the supply chain, such as shipment delivery and integrity, cannot be taken lightly. Whereas in many industries, product delivery may result in unhappy customers or reduced revenue, the magnitude of importance for delivery, as promised, is greatly compounded in these industries. Given the volatility of some methods such as air transportation for cold-chain shipments, the challenge is more acute. When excursions happen, they present a cascade of repercussions—unhappy customers, financial implications and in worst-case scenarios, loss of patient lives.
Customer satisfaction, while important, can pale in comparison to the other factors at stake. These include loss of life for patients, public health risks, and even tarnished company reputation. The challenge of minimizing risk in pharma/life sciences is that to do it well, many factors must be considered and each of them needs to work together seamlessly to deliver outcomes that cannot be deviated from or compromised unless carefully executed.
The mass rollout of COVID-19 vaccines showed us that we are not prepared to deal with the many obstacles that present themselves in times of greatest need. The mismatch between vaccine availability and last-mile delivery consistently highlighted the need for all constituents—pharmaceutical manufacturers; government at the national, regional, and local levels; shipping and distributors; even airlines—to work together to deliver appropriately.
It’s an ongoing process and clearly one that’s not easy to solve: although efforts began at scale over a year ago, they are still working on how to execute best. Recognizing the depth of the challenge and how to solve it most effectively requires an appreciation and understanding of the factors that cause it.
Compliance and risk management
Pharma and life sciences industries are heavily regulated and for good reason: any error risks lives. Ensuring compliance with these regulations is most often focused on the manufacturing of the drug. This, however, is short-sighted. Regulatory scrutiny occurs across operations, sales and marketing, price transparency, patients, clinical operations, and even transport and delivery. To ensure that risk of breach is minimized and managed, every aspect must be visible, tracked, and traced regardless of workflow stage. Pharma companies have huge regulatory affairs teams to ensure compliance. The challenge for them, however, is that they are often not able to see the full journey of the drug from development to patient, and all steps in between. To achieve this, there must be a shift away from a siloed view of regulatory compliance to one that is not only enterprise wide, but also extends to every element in the supply chain, that is, all hands/organizations and teams that have a hand in successful market delivery.
If a drug goes through years of research, and finally is ready to ship (after clearing the many regulatory hurdles), but then never gets to the medical facility so it can be effective for the patient, it’s a huge loss. Sadly, this is often the case. More than $35 billion is lost in the biopharma industry annually due to failures in temperature-controlled logistics. Products must be transported so they arrive not only on time, but also, in many instances, at a controlled temperature for maximum effectiveness. Seven of the top 200 most prescribed drugs in the US require 2–8°C storage and freeze protection, and this number increases each year. Fighting COVID now requires delivery of temperature-controlled vaccines en masse, and if they aren’t delivered in a timely fashion, they simply cannot be used, and this is something state and federal agencies strive to avoid at all costs. Oregon is just one state of many that has struggled: as of March, it had over $700,000’s worth of doses it was working to get into the hands of providers before they went to waste due to shipping mishaps, refrigeration issues, breakage, and expiration.
Moving from information to action
Simply knowing what’s working, or isn’t, in your supply chain operations doesn’t help fix the problem. Many planning applications give insight based on goals, prior results, or industry benchmarks. They often don’t consider what’s really going on, the “ground truth,” and thus may unintentionally contribute to the challenges. It’s vital to have a central system to predict at-risk situations in the supply chain for all companies involved—from manufacturer to intermediaries, to the end-customer or patient. With ~$440 billion in product moving through pharma cold chains by 2024, simply knowing where the product is along the way won’t be enough.
Many companies have interfaces to see the results, but few have a platform that allows for action. If temperature-controlled medicines are baking in the heat, or freezing in the snow, it’s vital that action be taken as soon as possible to prevent them from being rendered useless. Those platforms that have moved from predictive to proactive will be the winners, as they are able to monitor every aspect of the supply chain—even at the item level—to flag quality and compliance risks.
How biopharma can navigate successfully
It’s vital that these important requirements can be addressed in real time and in a central platform that addresses complexity, and the ever-changing need to stay on top of the unique requirements you have—whether it’s how to address cold chain issues, handling problems, transportation-planning issues, or regulatory affairs. The good news is that these challenges are not insurmountable, and many can be mitigated through real-time monitoring and analytics, which drives the ability to act to salvage valuable product and profit before it’s too late.
Enabling the end-to-end supply chain to be modeled and adapted identifies potential points of weakness and drives strategic initiatives to reduce cycle time and mitigate risks. So, whether transporting plasma, vaccines, insulin, or even cell therapy treatments for patients, removing data and organizational silos with a central system to monitor every collection, transit point, storage facility, and temperature gauge, including systems, sensors, warehouses, ports, and packages—even at the item level—must be considered. Collecting data from all sources and tracking it in an extensible platform that can model current and future outcomes via digital twins, orchestrating intelligence, and extending it to all relevant partners in the supply chain process is done by automating workflow via a low code workbench to resolve excursions that must be addressed immediately or differently. This ensures that the supply-chain system recognizes and addresses cases that must take the highest priority based on ground truth and real-time data. Digital twin functionality is a vital way to pivot for success; should one link in the supply chain break, it enables virtual modeling of the physical impact before it happens and provide recommendations on how to best reduce risk. This allows you to reduce waste, improve quality assurance, and protect your patents and brand at every step of the journey.
The last few years have seen unprecedented shocks to the biopharma supply chain that have forced the industry to face some harsh realities. Resilience, the ability to anticipate adverse factors, course correct in real time, and recover quickly are now critically important in continuing to meet increasing customer demands for faster delivery and more therapeutic personalization.
The speed and scale of disruptions reinforces the need for real-time operations.
Technology innovations are moving the biopharma supply chain beyond simply visibility into a much richer, more contextual “real-time-all-the-time” dynamic, enabling intelligent digitization across every enterprise in the supply-chain ecosystem. By modeling and adapting, embedding intelligence into operations, and deploying digital twins for collective insight and collaboration, we are now able to continuously align planning and execution with ground truths to improve service levels by increasing on-time and in-full delivery (OTIF), and line-item fill rate (LIFR). This helps maintain security, quality, and compliance standards, and provides specific measures of increased environmental, social, and governance (ESG) goals and achievements across the entire supply chain to boost customer satisfaction, patient outcomes, and revenue.
About the Author
Mahesh Veerina is President and CEO of ParkourSC.