Many pharmaceutical companies are looking to digitize their supply chain/process. There are many benefits that come with this but is it a good idea for every company? Have you considered the logistics of your digital pharma supply chain? Let's take a deep look at how this would work and what challenges and opportunities exist.
The pharma supply chain has been under pressure since the pandemic started. Clinical trials increased and became more challenging, de-centralized and patient-centric, which brought pressure on the pharma supply chain to improvise and enlightened new opportunities.
Supply chains are essential to every business. When brilliantly designed and flawlessly executed, they help companies achieve operational excellence at unprecedented levels. And while the constructs of pharma supply chains have been essentially unchanged for hundreds of years, businesses do not stand still, operating in a vacuum. All sectors of the economy are undergoing a dramatic transformation with advances in technology.
The pharma supply chain is how prescription medications are made and distributed to patients. The pharmaceutical supply chain consists of five significant steps:
- Pharmaceutical products are created in manufacturing places.
- They are then transferred to wholesale distributors.
- After it, they are sent to retail or other pharmacies to be stored.
- Pharmacy benefit management companies then screen the products for quality insurance and price negotiation.
- Finally, patients receive the products when pharmacies distribute them.
Some significant challenges that the pharma supply chain face include supply chain visibility, medicine counterfeiting, cold-chain transportation, and rising prescription drug pricing, which can considerably raise out-of-pocket expenditures for patients.
What are the Benefits of Digitalizing Pharma Supply Chains?
Pharma firms and their logistical partners have learned a lot from the epidemic. Even in the absence of legislation, technology may play a vital role in keeping vaccines frozen or counterfeit medications far away from people.
Digital supply chains provide so many advantages that it would be surprising if they didn't become increasingly common. In addition to improving patient safety and making life simpler for healthcare providers and everyone involved in the pharmaceutical supply chain, digital supply chains might be revolutionary for the pharma sector as a whole –one of the great things to come out of the Brexit-Covid-19 nexus.
A Digital Supply Chain's Logistics of Pharma Industry
Supply chain logistics is one sector that is seeing many innovations because of rising digital technology revolutionizing sections of the pharmaceutical business. A good example is the digitalization of the pharmaceutical supply chain, which is defined as a collection of procedures that make use of modern technology and a greater understanding of the functions of each stakeholder along the chain to help each participant make better decisions regarding the resources needed, product demand, and the linkages between them.
The digitalization of a pharma supply chain by integrating technology and innovation offers pharma businesses a variety of benefits, including:
- The modern pharma enterprise should digitize its entire operational process, including everything from product design and development through the manufacturing process to warehousing, transportation, and retailing. Additionally, companies are tracking high volumes of information about the product, shipping and distribution. What has not changed is the essential requirement for supply chains to be agile in responding to changing customer demand.
- Technology is now available to make companies more efficient across supply chain activities – from sourcing raw materials to product development, manufacturing, delivery and sale. Further, companies can now optimize the drug development process and improve product quality through digital tracking of material and finished products through the pharma supply chain.
- Technology can help supply chains achieve their key objectives – optimizing global operations with direct communication with customers and suppliers; increasing efficiency in manufacturing; integrating logistics to reduce costs in delivery; and reducing the time for hospitals/patients to get the drug.
- Innovative technologies such as predictive analytics may speed up the Pharma supply chain processes by detecting demand and market trends, allowing supply chains to adjust production capacity and fulfill orders much more quickly.
- Real-time data from machines allows businesses to respond more quickly and flexibly to changing demands due to more excellent adaptability
- A digital supply chain allows a firm to track how resources are used, preventing revenue loss due to out-of-stock or overstocked items. Thanks to digitalization, just-in-time manufacturing has become increasingly available, ensuring essential decisions and pushing last-minute deliveries.
- Automating physical chores and planning via robots resulted in greater operational efficiency. It improves pharma supply chain efficiency in terms of speed and minimizes the danger of momentarily halted manufacturing due to human mistakes.
- In recent years, advanced robotic solutions have arisen by deploying artificial exoskeletons that mimic human physiology. One of the primary benefits is that it significantly influences warehouse productivity since humans are no longer subjected to strenuous physical operations.
The rapid increase in clinical trials has boosted pharmaceutical R&D investment, which will reach $190 billion in 2019, 30 percent higher than in 2015. Meanwhile, industry-funded interventional clinical studies have increased, with over 6,100 commencing in 2019. The rapid development of COVID-19 vaccines has lowered expectations for shorter deadlines, while the pandemic has hastened the transition to decentralized testing. New patient-centric methods and increasingly adaptable, global, and complicated studies are among the other changes that clinical drug supply must address.
How to Integrate Innovation in Pharma Supply Chain Strategy?
An innovative culture comprises three essential components
- Changing Mindset: To remake something successfully, we must go to our discomfort zone under exemplary leadership. Pharma business holders must check their supply chain teams to ensure that the team leaders are modeling the technological innovation correctly.
- Interest in Learning the Technology: The second element is learning and applying technology to boost organizational efficiency. The leaders must convey how to use technology and the relevant roles of the workforce.
- Enablement: The well-known enablement model specifies how to allocate resources and make capital investments to systemize operational efficiency and do so with the appropriate support resources.
To successfully include these features, pharmaceutical firms must first think that these actions are critical to achieving their purpose.
Risks of Introducing Digitalization in Pharma Supply Chains
As digital supply chains support the excellent inspection of pharma supply chain processes, its pitfalls couldn't be ignored. License infringement and risk are prominent factors when dealing with digitalization. Primarily, these issues arise when the company holders don't check their operations regularly, and the minor issues become significant leading to license violations.
In this haste to reap the benefits of a digital supply chain, many businesses overlook the need to make the system user-friendly. Users having a negative experience due to a lack of software integration can lead to various issues and have a ripple effect across the supply chain.
While these issues are now a concern, technology is rapidly evolving, and growing application in the pharmaceutical sector means that organizations are getting more familiar with various systems. The potential for digital supply chains to improve pharmaceutical production is undeniable, and a growing number of companies are looking at how to get the benefit.
The Fate of Digital Supply Chains
Companies dedicated to supplying chain execution brilliance—which attempts to utilize all available supply chain assets, reduce costs at each stage, and deliver things to clients on time and according to specifications—should already pursue a digital strategy.
A survey of 234 supply chain professionals conducted by benchmarking firm APQC found that deploying new technology and competencies was a top priority before the pandemic. A recent poll confirms this: CFOs are more willing to invest in technology.
Given the current state of uncertainty, these investments should be prioritized—creating more robust supply chains is a must. According to the Boston Consulting Group investigation, digital supply chains may cut costs by 20%, raise EBITDA, improve outcomes by 6%, and increase customer service by 30%. Briefly, digital supply chains are becoming profit centers, not cost centers; as they grow, they become the core of whole new business models.
How can CosmoTrace help?
CosmoTrace was formed by an expert, experienced team that has since worked extensively with every part of the pharmaceutical supply chain from manufacturing through to final distribution. As Serialization Consulting Experts, our focus is on delivering the absolute best serialization support by offering long-term serialization and sustainability strategies and providing forward-thinking industry solutions.
We offer premium support and services that can help your business with serialization implementation. Our team of experts ensure that you are up to date with all global traceability regulations and will help in creating a successful long-term serialization strategy.