Rich Quelch, Global Head of Marketing, Origin06.04.20
For too long the pharmaceutical supply chain has been overlooked. Despite linking the laboratory to the marketplace, the majority of investment has instead been prioritized for the discovery, development and marketing of new products to sell.
However, over time, this underinvestment has meant global supply chains aren’t prepared for the large-scale shifts in demand, new product types with complex requirements, and increasing pressures from ever-tightening environmental regulations being placed on the industry.
But, while this is currently holding the international pharmaceutical industry back, it isn’t too late for change. There are huge technological and commercial opportunities in this area, open to those who blaze the trail and lead through best practice.
Moving towards 360-degree visibility from concept to commercial must become a priority for pharmaceutical manufacturers, transforming the typically disjointed elements of packaging development, manufacturing, and distribution into a coherent and flexible supply chain that’s truly global.
This, in turn, will improve speed to market, assurance of supply and overall operating efficiency. As well as reaping the rewards of reduced risk and higher profits, more patients will get access to affordable and safe medicines and therapies.
Patient safety has always and will always continue to be the number one priority for the pharmaceutical industry. After all, as a sector, its mission is to save and prolong life. But pharma’s ability to deliver on this promise is being put under threat by outdated and underfunded supply chains.
Confounding stress factors
International pharma supply chains are currently under considerable pressure from confounding stress factors. The latest challenge to test the resilience of all global supply chains, not just pharmaceuticals, is COVID-19.
The rapid spread of the virus through regions in China slowed or even halted manufacturing completely, with many product-based industries quickly seeing the impact on their supply chains. India, one of the world’s largest exporter of drugs that U.S. and European markets heavily rely on, also limited medicine exports in response to fears of global shortages.
Due to most active pharmaceutical ingredients now being manufactured in Asia, particularly China and India, this places many international healthcare systems in a vulnerable position if large areas overseas are impacted by a contagion. The same is true for increasingly common and localized extreme weather events, brought on by climate change.
Climate change is also driving many of the world’s governments and regulators to tighten and impose more legislation to help curb carbon emissions and reduce plastic and water waste, greatly impacting how pharma produces and distributes its products.
In addition to this, a new wave of complex biologic medicines and gene therapies are hitting the market, throwing up challenges for manufacturing and distribution networks due to their sensitivity and short life cycles.
We’re also seeing greater demand for pharmaceuticals from emerging BRIC economies, increasing the need for truly global supply chains, and aging population placing pressure on healthcare systems.
The problem of counterfeit and falsified medicine hasn’t gone away either, despite innovations in smart secondary packaging design to track and trace distribution. The criminal market for falsified medicine is worth over $200 billion per year, making the protection of medicine quality and safety a priority, including the development of tamper-proof packaging technologies.
Combined, these forces represent a huge challenge for modern pharma. As the frontier of drug innovation evolves, so must manufacturing and distribution systems.
A hybrid supply chain fit for today and tomorrow
A pharmaceutical supply chain that’s fit for purpose today and tomorrow is one that’s not just reactive, but proactive. It will anticipate and accommodate current and future trends.
However, today, much of the supply chain management within the pharma industry remains at variance with revolutions synonymous with other markets.
The important challenges for pharmaceuticals companies with regard to packaging supply chain management have many similar features when compared with the Aerospace and Defense markets, where the continual commitment to accelerate competitiveness by following best practices and raising the performance of its supply chains has resulted in the SC21 initiative.
It has become commonplace for the manufacturing and packaging of medicines to happen across multiple sites, and once the materials for the medication are delivered, the final product is created in pieces. This means multiple teams are managing multiple international supplier sites, with room for delay and error.
Instead, teams on the ground need to be capable of creating any solution, to any problem, anytime, and anywhere. To facilitate the new pharmaceutical landscape that’s resilient in the face of new and existing stress factors, a fresh and agile approach is needed, one which leans towards an all-in-one solution that isn’t restricted to one manufacturing location or field of expertise.
It’s important to have made investments in creating a hybrid change program alongside some of the top international pharma companies to help accelerate the competitiveness of the pharmaceutical primary packaging industry and uphold the highest quality standards.
By consolidating the supply chain—inclusive of packaging design, sourcing raw materials, manufacture, and distribution—under one roof brings a large range of benefits. These include, but aren’t limited to, reduced risks and overheads, greater innovation, assurance of supply and compliance, tighter quality control and local availability via regional distribution sites on a global scale.
This includes having access to dedicated sales and innovation offices, manufacturing cells, and storage facilities in strategic locations.
Increasing end-to-end visibility with data
End-to-end visibility of the supply chain is key to greater efficiency and agility. Big data and the application of AI are helping to give clarity impossible until now.
Like most organizations, pharmaceutical companies have access to vast data banks, but many don’t have the structures or knowledge in place to maximize its value. Pharma companies need to think of digital not as a series of individual tools but as a means of transformation, requiring specialist technology and people.
There’s been a gradual shift towards a virtual supply chain model, with stakeholders transferring operations from enterprise resource planning software to the cloud, allowing for all organizations to connect to a shared system regardless of their own IT infrastructure. This alone can give wide visibility of the supply chain, end to end.
Pharma operations executives can leverage big data, external and internal indicators, and machine learning algorithms to better forecast demand, and automatically identify and mitigate supply risks. In manufacturing, analytical models can accurately predict and respond to critical events in real-time to increase efficiency, reduce downtime and avoid serious shortages.
For example, Smart-i PharmiTrack, created by Origin is a pre-developed product featuring a central user interface combined with an integrated packaging chip to manage and record all the typical activities that occur in the supply chain, logging events or raising queries that occur during a product’s lifespan. It can be hosted with a secure cloud server or system, allowing global access to authorized users enabling centralized control of batch management such as the revoking or reinstating a batch or communicating information to pharmacists or patients.
In terms of forecasting, advanced AI software can now even pick up that a large number of people in a city are complaining of flu-like symptoms on social media and use this analysis to predict an imminent large-scale outbreak, giving local authorities and healthcare systems more time to react.
When it comes to transportation, AI is making it possible to predict and manage transportation capacity at a highly granular level, while virtually eliminating manual work and best-guess decisions. Smarter decisions when it comes to transport can reduce costs by a substantial amount, as well as decrease CO2 emissions.
Overcoming barriers to smart data management
All in all, the promise of AI in pharma supply chain management is clear.
However, as with most new technologies, a lack of understanding and legacy IT infrastructure is currently limiting its uptake and holding innovation back. After all, AI applications are only as good as the data they have access to.
Investment and focus need to be directed towards updating in-house digital infrastructure and partnering with innovative technology start-ups who are creating these game-changing AI solutions.
It’s also vital that over the next five years, key decision-makers and leaders in pharma make training a priority to bridge the skills gap and ensure the industry can capitalize on AI technologies. This will require upfront investment and new ways of working, which are two reasons why uptake has been slow off the ground.
There is no doubt that AI is the future of operating exponentially more efficient and more intelligent supply chain systems but today, the industry is at a crossroads. And it’s up to us which direction we take.
Pharma companies that embrace hybrid supply chains and smart data management can expect significant payback in speed, cost-efficiency and risk mitigation. Those that stick with the status quo may find themselves quickly at a dead end.
The most successful pharma companies of tomorrow will be those who invest in and build agile and efficient supply chains—both virtual and physical—today.
Rich Quelch is an experienced global marketer within the healthcare and pharmaceutical sector. He has led the development of the Origin brand, positioning it as a leading supplier of innovative and ground-breaking pharmaceutical packaging devices, as well as offering a unique supply chain model which is disrupting the pharma industry.
However, over time, this underinvestment has meant global supply chains aren’t prepared for the large-scale shifts in demand, new product types with complex requirements, and increasing pressures from ever-tightening environmental regulations being placed on the industry.
But, while this is currently holding the international pharmaceutical industry back, it isn’t too late for change. There are huge technological and commercial opportunities in this area, open to those who blaze the trail and lead through best practice.
Moving towards 360-degree visibility from concept to commercial must become a priority for pharmaceutical manufacturers, transforming the typically disjointed elements of packaging development, manufacturing, and distribution into a coherent and flexible supply chain that’s truly global.
This, in turn, will improve speed to market, assurance of supply and overall operating efficiency. As well as reaping the rewards of reduced risk and higher profits, more patients will get access to affordable and safe medicines and therapies.
Patient safety has always and will always continue to be the number one priority for the pharmaceutical industry. After all, as a sector, its mission is to save and prolong life. But pharma’s ability to deliver on this promise is being put under threat by outdated and underfunded supply chains.
Confounding stress factors
International pharma supply chains are currently under considerable pressure from confounding stress factors. The latest challenge to test the resilience of all global supply chains, not just pharmaceuticals, is COVID-19.
The rapid spread of the virus through regions in China slowed or even halted manufacturing completely, with many product-based industries quickly seeing the impact on their supply chains. India, one of the world’s largest exporter of drugs that U.S. and European markets heavily rely on, also limited medicine exports in response to fears of global shortages.
Due to most active pharmaceutical ingredients now being manufactured in Asia, particularly China and India, this places many international healthcare systems in a vulnerable position if large areas overseas are impacted by a contagion. The same is true for increasingly common and localized extreme weather events, brought on by climate change.
Climate change is also driving many of the world’s governments and regulators to tighten and impose more legislation to help curb carbon emissions and reduce plastic and water waste, greatly impacting how pharma produces and distributes its products.
In addition to this, a new wave of complex biologic medicines and gene therapies are hitting the market, throwing up challenges for manufacturing and distribution networks due to their sensitivity and short life cycles.
We’re also seeing greater demand for pharmaceuticals from emerging BRIC economies, increasing the need for truly global supply chains, and aging population placing pressure on healthcare systems.
The problem of counterfeit and falsified medicine hasn’t gone away either, despite innovations in smart secondary packaging design to track and trace distribution. The criminal market for falsified medicine is worth over $200 billion per year, making the protection of medicine quality and safety a priority, including the development of tamper-proof packaging technologies.
Combined, these forces represent a huge challenge for modern pharma. As the frontier of drug innovation evolves, so must manufacturing and distribution systems.
A hybrid supply chain fit for today and tomorrow
A pharmaceutical supply chain that’s fit for purpose today and tomorrow is one that’s not just reactive, but proactive. It will anticipate and accommodate current and future trends.
However, today, much of the supply chain management within the pharma industry remains at variance with revolutions synonymous with other markets.
The important challenges for pharmaceuticals companies with regard to packaging supply chain management have many similar features when compared with the Aerospace and Defense markets, where the continual commitment to accelerate competitiveness by following best practices and raising the performance of its supply chains has resulted in the SC21 initiative.
It has become commonplace for the manufacturing and packaging of medicines to happen across multiple sites, and once the materials for the medication are delivered, the final product is created in pieces. This means multiple teams are managing multiple international supplier sites, with room for delay and error.
Instead, teams on the ground need to be capable of creating any solution, to any problem, anytime, and anywhere. To facilitate the new pharmaceutical landscape that’s resilient in the face of new and existing stress factors, a fresh and agile approach is needed, one which leans towards an all-in-one solution that isn’t restricted to one manufacturing location or field of expertise.
It’s important to have made investments in creating a hybrid change program alongside some of the top international pharma companies to help accelerate the competitiveness of the pharmaceutical primary packaging industry and uphold the highest quality standards.
By consolidating the supply chain—inclusive of packaging design, sourcing raw materials, manufacture, and distribution—under one roof brings a large range of benefits. These include, but aren’t limited to, reduced risks and overheads, greater innovation, assurance of supply and compliance, tighter quality control and local availability via regional distribution sites on a global scale.
This includes having access to dedicated sales and innovation offices, manufacturing cells, and storage facilities in strategic locations.
Increasing end-to-end visibility with data
End-to-end visibility of the supply chain is key to greater efficiency and agility. Big data and the application of AI are helping to give clarity impossible until now.
Like most organizations, pharmaceutical companies have access to vast data banks, but many don’t have the structures or knowledge in place to maximize its value. Pharma companies need to think of digital not as a series of individual tools but as a means of transformation, requiring specialist technology and people.
There’s been a gradual shift towards a virtual supply chain model, with stakeholders transferring operations from enterprise resource planning software to the cloud, allowing for all organizations to connect to a shared system regardless of their own IT infrastructure. This alone can give wide visibility of the supply chain, end to end.
Pharma operations executives can leverage big data, external and internal indicators, and machine learning algorithms to better forecast demand, and automatically identify and mitigate supply risks. In manufacturing, analytical models can accurately predict and respond to critical events in real-time to increase efficiency, reduce downtime and avoid serious shortages.
For example, Smart-i PharmiTrack, created by Origin is a pre-developed product featuring a central user interface combined with an integrated packaging chip to manage and record all the typical activities that occur in the supply chain, logging events or raising queries that occur during a product’s lifespan. It can be hosted with a secure cloud server or system, allowing global access to authorized users enabling centralized control of batch management such as the revoking or reinstating a batch or communicating information to pharmacists or patients.
In terms of forecasting, advanced AI software can now even pick up that a large number of people in a city are complaining of flu-like symptoms on social media and use this analysis to predict an imminent large-scale outbreak, giving local authorities and healthcare systems more time to react.
When it comes to transportation, AI is making it possible to predict and manage transportation capacity at a highly granular level, while virtually eliminating manual work and best-guess decisions. Smarter decisions when it comes to transport can reduce costs by a substantial amount, as well as decrease CO2 emissions.
Overcoming barriers to smart data management
All in all, the promise of AI in pharma supply chain management is clear.
However, as with most new technologies, a lack of understanding and legacy IT infrastructure is currently limiting its uptake and holding innovation back. After all, AI applications are only as good as the data they have access to.
Investment and focus need to be directed towards updating in-house digital infrastructure and partnering with innovative technology start-ups who are creating these game-changing AI solutions.
It’s also vital that over the next five years, key decision-makers and leaders in pharma make training a priority to bridge the skills gap and ensure the industry can capitalize on AI technologies. This will require upfront investment and new ways of working, which are two reasons why uptake has been slow off the ground.
There is no doubt that AI is the future of operating exponentially more efficient and more intelligent supply chain systems but today, the industry is at a crossroads. And it’s up to us which direction we take.
Pharma companies that embrace hybrid supply chains and smart data management can expect significant payback in speed, cost-efficiency and risk mitigation. Those that stick with the status quo may find themselves quickly at a dead end.
The most successful pharma companies of tomorrow will be those who invest in and build agile and efficient supply chains—both virtual and physical—today.
Rich Quelch is an experienced global marketer within the healthcare and pharmaceutical sector. He has led the development of the Origin brand, positioning it as a leading supplier of innovative and ground-breaking pharmaceutical packaging devices, as well as offering a unique supply chain model which is disrupting the pharma industry.
