Darryl Brown, Systech 09.11.15
This is arguably one of the most dynamic transitional periods in our industry. Advances in technology, regulation, counterfeiting, globalization and market demands for an increasing array of products have created an environment in which we must be more flexible and adaptable than ever before. The ability to anticipate and adapt to change will be the hallmark of success. With that said, here at Systech, we see four major trends reshaping the industry. Our advice? Adapt or die.
Trend 1: Moving Beyond Compliance
Over the past few months, we have seen a rapid interest in customers and prospects starting to accelerate serialization implementations. It seems that with DSCSA legislation deadlines approaching, a number of organizations are beginning to believe the deadline dates are not going to move. This is becoming very apparent in contract manufacturing where they are getting pressure from their customers to implement serialization with track and trace solutions sooner rather than later—as many of their customers are not in a position or are running behind schedule in readying to meet compliance needs themselves.
While everyone is in a similar situation, the difference for mid-market players is they are not just resolved to implement an immediate level 1-2 solution, but are looking toward investing in the future with true level 1-3 and even level 4 to pave the way for future requirements and gain the ability to extract good intelligence on the business from the manufacturing and packaging environments through the supply chain. Those that fail to realize this do so at their long-term peril.
Contract packagers see serialization as a component of a longer-term strategy and business investment. Hence, they are looking to ensure the solution is flexible, scalable and upgradable because it gives them a competitive edge in providing customers with business intelligence and, in some cases, introducing authentication and end-consumer engagement options into their offerings.
Trend 2: Better Managing Supply Chain Risk
Internationalization, outsourcing, e-tailing and the expansion of international trade zones have created enormous complexities throughout the supply chain and product life cycle. Compliance requirements vary across borders and there are several factors posing a threat to global supply chain safety, including counterfeit product, diversions of supply, increased competition and margin pressure. This has resulted in a rapid escalation of global risk and counterfeiting issues, threatening consumer safety like never before.
The ability to uniquely identify and authenticate products is the only avenue for brands to mitigate these risks and drive value through product protection. In fact, a recent report titled Sustainable Supply Chain Trends 2015 issued by Ethical Corp., noted that eliminating supply chain risks is a key business driver for 2016 and beyond. Over 32% of executives polled said they are still incentivized by eliminating supply chain risks.
The ability to secure a product and authenticate it in real time while in the field is a true game changer. It gives better control over the supply chain, while giving customers confidence in the authenticity of a product and brand.
By acting now to implement unit-level traceability, manufacturers and packagers can protect their brands and bottom line by mitigating the risks of diverted or counterfeit product entering or leaving the supply chain.
Trend 3: Brand Protection as a Global Priority
Here in America, the National Association of Boards of Pharmacy estimates that in 2010, the market for counterfeit product was valued at $75 billion—approximately 8% of the overall market. Some global estimates are as high as $200 billion.
According to the World Health Organization (WHO), counterfeit drugs are a growing global issue due to increasing online access: “In over 50% of cases, medicines purchased over the Internet from illegal sites that conceal their physical address have been found to be counterfeit.”
WHO also notes that, “The extreme difficulty in tracing the manufacturing and distribution channels of SFFC medicines makes their circulation on markets difficult to stop.”
The U.S. has the most valuable drug supply chain in the world, with more opportunities to traffic illegal drugs through our borders, repackagers and secondary wholesalers. On a global scale, the human toll from counterfeit medicines is heart wrenching.
Ultimately, the responsibility for ensuring drug authenticity falls upon the manufacturer. Just one major incident can affect numerous consumers, resulting in claims against the manufacturer and a devastating impact on corporate profits and brand reputation.
Unit-level traceability at the point of packaging provides manufacturers with insight into a product’s movements through the supply chain, verifying the prescription’s authenticity and safety, which is critical to mitigate risk.
Trend 4: Data Driven Analytics Will Become a Major Value Play
Serialization data arms enterprises to monitor overall equipment effectiveness with greater accuracy. In our experience, upgraded supply chains are able to reduce inventory levels by 15% and obsolescence by 10% simply from moving to item-level traceability, yielding millions in savings annually.
However, the real power of data driven analytics will be in consumer engagement. The shift towards item-level traceability coupled with the development of intelligent consumer interfaces and smart phone technology offers manufacturers the opportunity to drive competitive differentiation from the personalization of their products.
The convergence of these trends offers the opportunity to link uniquely identifiable products to individual consumers. In creating these connections, manufacturers are provided with a novel means of driving value and competitive differentiation, while substantiating their needs for authentic and safe product.
The benefits are not limited to the defense of a supply chain. The development of mobile/phone technologies that facilitate mass consumer authentication of product allows brand owners to drive targeted, effective and efficient sales and marketing.
By offering end-consumers a means to authenticate serialized products via mobile applications, manufacturers can create a direct touch point to their customer base—effectively creating a one-to-one relationship between a product and the consumer. This relationship is invaluable in managing the lifecycle of a unique product, allowing brand owners to:
Darryl Brown is vice president, global strategic marketing for Systech. Based in Princeton, NJ, with international headquarters in Brussels, Belgium, Systech’s dedicated sales and technical services teams serve customers in more than 26 countries worldwide. Offering revolutionary anti-counterfeiting technologies, authentication solutions, and supply chain data visibility applications, Systech makes customer’s brands more secure and the resulting data more accurate, valuable and actionable. As supply chains become more complicated and counterfeiting threats continue to grow, Systech will continue to be at the forefront of innovation.
Systech can be found at www.systechone.com.
Trend 1: Moving Beyond Compliance
Over the past few months, we have seen a rapid interest in customers and prospects starting to accelerate serialization implementations. It seems that with DSCSA legislation deadlines approaching, a number of organizations are beginning to believe the deadline dates are not going to move. This is becoming very apparent in contract manufacturing where they are getting pressure from their customers to implement serialization with track and trace solutions sooner rather than later—as many of their customers are not in a position or are running behind schedule in readying to meet compliance needs themselves.
While everyone is in a similar situation, the difference for mid-market players is they are not just resolved to implement an immediate level 1-2 solution, but are looking toward investing in the future with true level 1-3 and even level 4 to pave the way for future requirements and gain the ability to extract good intelligence on the business from the manufacturing and packaging environments through the supply chain. Those that fail to realize this do so at their long-term peril.
Contract packagers see serialization as a component of a longer-term strategy and business investment. Hence, they are looking to ensure the solution is flexible, scalable and upgradable because it gives them a competitive edge in providing customers with business intelligence and, in some cases, introducing authentication and end-consumer engagement options into their offerings.
Trend 2: Better Managing Supply Chain Risk
Internationalization, outsourcing, e-tailing and the expansion of international trade zones have created enormous complexities throughout the supply chain and product life cycle. Compliance requirements vary across borders and there are several factors posing a threat to global supply chain safety, including counterfeit product, diversions of supply, increased competition and margin pressure. This has resulted in a rapid escalation of global risk and counterfeiting issues, threatening consumer safety like never before.
The ability to uniquely identify and authenticate products is the only avenue for brands to mitigate these risks and drive value through product protection. In fact, a recent report titled Sustainable Supply Chain Trends 2015 issued by Ethical Corp., noted that eliminating supply chain risks is a key business driver for 2016 and beyond. Over 32% of executives polled said they are still incentivized by eliminating supply chain risks.
The ability to secure a product and authenticate it in real time while in the field is a true game changer. It gives better control over the supply chain, while giving customers confidence in the authenticity of a product and brand.
By acting now to implement unit-level traceability, manufacturers and packagers can protect their brands and bottom line by mitigating the risks of diverted or counterfeit product entering or leaving the supply chain.
Trend 3: Brand Protection as a Global Priority
Here in America, the National Association of Boards of Pharmacy estimates that in 2010, the market for counterfeit product was valued at $75 billion—approximately 8% of the overall market. Some global estimates are as high as $200 billion.
According to the World Health Organization (WHO), counterfeit drugs are a growing global issue due to increasing online access: “In over 50% of cases, medicines purchased over the Internet from illegal sites that conceal their physical address have been found to be counterfeit.”
WHO also notes that, “The extreme difficulty in tracing the manufacturing and distribution channels of SFFC medicines makes their circulation on markets difficult to stop.”
The U.S. has the most valuable drug supply chain in the world, with more opportunities to traffic illegal drugs through our borders, repackagers and secondary wholesalers. On a global scale, the human toll from counterfeit medicines is heart wrenching.
Ultimately, the responsibility for ensuring drug authenticity falls upon the manufacturer. Just one major incident can affect numerous consumers, resulting in claims against the manufacturer and a devastating impact on corporate profits and brand reputation.
Unit-level traceability at the point of packaging provides manufacturers with insight into a product’s movements through the supply chain, verifying the prescription’s authenticity and safety, which is critical to mitigate risk.
Trend 4: Data Driven Analytics Will Become a Major Value Play
Serialization data arms enterprises to monitor overall equipment effectiveness with greater accuracy. In our experience, upgraded supply chains are able to reduce inventory levels by 15% and obsolescence by 10% simply from moving to item-level traceability, yielding millions in savings annually.
However, the real power of data driven analytics will be in consumer engagement. The shift towards item-level traceability coupled with the development of intelligent consumer interfaces and smart phone technology offers manufacturers the opportunity to drive competitive differentiation from the personalization of their products.
The convergence of these trends offers the opportunity to link uniquely identifiable products to individual consumers. In creating these connections, manufacturers are provided with a novel means of driving value and competitive differentiation, while substantiating their needs for authentic and safe product.
The benefits are not limited to the defense of a supply chain. The development of mobile/phone technologies that facilitate mass consumer authentication of product allows brand owners to drive targeted, effective and efficient sales and marketing.
By offering end-consumers a means to authenticate serialized products via mobile applications, manufacturers can create a direct touch point to their customer base—effectively creating a one-to-one relationship between a product and the consumer. This relationship is invaluable in managing the lifecycle of a unique product, allowing brand owners to:
- Direct and enroll consumers into loyalty programs
- Receive customer feedback
- Provide product information and technical support
- Send tailored product messaging and marketing campaigns
- Reward customer loyalty and encourage reordering
- Improve compliance and persistence (Pharmaceuticals)
Darryl Brown is vice president, global strategic marketing for Systech. Based in Princeton, NJ, with international headquarters in Brussels, Belgium, Systech’s dedicated sales and technical services teams serve customers in more than 26 countries worldwide. Offering revolutionary anti-counterfeiting technologies, authentication solutions, and supply chain data visibility applications, Systech makes customer’s brands more secure and the resulting data more accurate, valuable and actionable. As supply chains become more complicated and counterfeiting threats continue to grow, Systech will continue to be at the forefront of innovation.
Systech can be found at www.systechone.com.
