Pharma supply chain globalizes<\/h3>\n\n\n\n
One major trend that existed before the pandemic was the globalization of raw materials. Susan Beardslee, freight transportation and logistics principal analyst at ABI Research<\/a> explains that much of the pharma supply chain relied on raw materials from China. Even before Coronavirus (COVID-19) this caused room for a wide range of supply risks. <\/p>\n\n\n\n Meanwhile, Christina Smolke, CEO of Antheia, adds that globalization in pharma is reaches even farther than that.<\/p>\n\n\n\n \u201cOver the past two decades, pharma supply chains have steadily become more globalized,\u201d she says. \u201cVarious steps of the drug manufacturing and distribution process occur in different parts of the world, for example, a medicinal crop might be farmed and harvested in Australia, processed in India, combined with other ingredients to form a final drug at a plant in Germany and distributed to hospitals or pharmacies in the United States.<\/p>\n\n\n\n \u201cWhen functioning properly, globalized supply chains broaden access to critical medicines and create more favorable price points for important drugs. They have also led to stronger medical infrastructure across much of the world. However, the shift toward global supply chains has also created dependencies on foreign suppliers, which can sometimes cause problems for countries during times of drug shortages. This is what happened in the U.S., which now relies heavily on foreign suppliers for the active ingredients in many of its most essential medicines (80% of API manufacturers are outside the U.S),” adds Smolke.<\/p>\n\n\n\n Along with globalization grew a focus on just-in-time (JIT) inventory to drive down costs. The JIT inventory strategy focuses on pairing raw material sourcing directly with production schedules, eliminating excess source product. Jennifer Biscelgie<\/a>, CEO and founder of Interos<\/a>, explains that while this approach was successful in driving down costs, it is prone to failure if there is any type of disruption. Additional, global trade offer significant instability as well.<\/p>\n\n\n\n Serialization also became rampant in the days before COVID-19 to drive safety in medications and combat counterfeiting, Biscelgie continues.<\/p>\n\n\n\n \u201cTechnology to monitor the integrity of the cold chain to ensure temperature ranges were maintained in shipping (to help guarantee drug efficacy) was gaining investment and is now critical with the vaccine,\u201d she says. \u201cData traceability also was a high priority as the pharma supply chain worked to move data online so that the entire chain could see the data they needed to make fast and better decisions. The pandemic has greatly accelerated the digitization imperative and is also driving a strong trend toward supply chain risk monitoring and management, all toward the goal of operational resilience.\u201d<\/p>\n\n\n\n Additional outside factors disrupted the pharma supply chain as well.<\/p>\n\n\n\n \u201cBefore the pandemic, supply chains were experiencing disruption as a result of several macroeconomic trends, including declining productivity growth, rapid digital economic expansion and increasing slowbalization (the slowdown in globalization due to trade wars and nationalistic tendencies),\u201d says Baber Farooq, senior vice president of product strategy at SAP Procurement Solutions<\/a>. \u201cSince the onset of COVID-19, we\u2019ve seen an increased focus on nearshore manufacturing across many industries. Simultaneously, we\u2019re seeing digitalization allow for more cross-border services. Investment in digital transformation and automation have become only more important and immediate as companies re-evaluate their supply chain solvency.\u201d<\/p>\n\n\n\n COVID-19 also heightened focus on pricing policing.<\/p>\n\n\n\n \u201cPrior to the pandemic, the industry faced immense pressure to police its own pricing irregularities and link its business results to public health,\u201d says Tinglong Dai, associate professor at Johns Hopkins Carey Business School. \u201cIn addition, personalized medicine was a major trend that drove much of the energy. There was also some pressure to increasingly adopt AI and data analytics.\u201d<\/p>\n\n\n\n Another aspect of the industry that the pharmaceutical companies could not gain a hold of was consumer demand prediction, even before the pandemic struck. Chris Hale<\/a>, CEO of Kountable, points out that while it might seem strange for a sector rooted in daily medications and prescriptions to have issues with demand planning, this problem perplexed care providers and manufacturers. <\/p>\n\n\n\n \u201cA surprising number of patients don\u2019t follow those prescriptions at all, don\u2019t re-fill them according to plan or don\u2019t take them according to their personal programs,\u201d Hale explains. \u201cThese factors add noise to the demand signals that flow up the supply chain and send false signals to manufacturers and distributors alike, impacting their ability to accurately forecast throughout the supply chain and distribution. Understanding patient behaviors was considered an impossible dream, but newly integrated platform technologies are making this more achievable.\u201d<\/p>\n\n\n\n Like other industries in the supply chain, the trends in the pharma supply chain push technology innovation and adoption. When it comes to pharmaceuticals, tracking reigns supreme like much of the supply chain, and the COVID-19 crisis only makes it more prominent.<\/p>\n\n\n\n \u201cOur industry has many tools for tracking and monitoring freight, from the standard onboard computers reporting the location, direction of travel and hours of service status of the truck and driver to more complex temperature monitoring systems that have risen to prominence during this crisis,\u201d Orban says. \u201cIt is no longer a load of apples or ice cream that has to be carefully temperature-controlled; now an incredibly important shipment of vaccine could be endangered if the cooling systems in the trailer fail or the temperature rises without appropriate intervention.<\/p>\n\n\n\n \u201cAt the start of the COVID-19 vaccine distribution, escorts were required for many of the vaccine loads,\u201d he continues. \u201cThis, while common for some types of high-value loads, was something that always adds additional stress for the driver and the carrier. The amount of responsibility we put on our drivers has only increased — not only do they have to be away from home during a global pandemic, but now they might not be able to stop at their preferred truck stop due to security concerns or could have to change their sleep or eating patterns to make sure that we get the vaccine we so desperately need. The carriers themselves have to be equipped to brief the drivers, as well as make sure that security protocols are being followed, and this adds another layer to the complexities of moving freight through the country.<\/p>\n\n\n\n \u201cIf a fleet doesn’t have an existing security program or high-value load process, it is possible they won’t even be able to haul these loads, even if they have the proper equipment,\u201d Orban adds.<\/p>\n\n\n\n Beardslee seconded that technology in transportation is vital. She emphasizes that cold chain trailers, box trucks, containers, air cargo and on-site freezers are important in not just transporting vaccines, but also in moving all temperature-controlled pharmaceuticals safely. Additionally, temperature monitoring technology and tracking software embedded into transportation management systems (TMS) are important for the growing need for visibility that has proved important in vaccine distribution. Specifically, for the vaccine, there are platforms that integrate CDC vaccine registration requirements.<\/p>\n\n\n\n But, it is not just transportation technology that is important in the supply chain.<\/p>\n\n\n\n \u201cMany pharma companies are taking advantage of digital technologies, including cloud, robotic process automation and Internet of Things,\u201d says Stephen Meyer, senior research director, Gartner Supply Chain Practice<\/a>. \u201cThis can be leveraged for \u2018smart\u2019 products that result in better prescription adherence and more accurate dosing, as well as for new supply chain capabilities, like real-time shipment tracking that ensures products are delivered on-time and at the correct conditions. Analytical technologies that help derive insight from large and diverse data sets are also popular, like AI and cognitive computing.\u201d<\/p>\n\n\n\n Farooq supports the argument for the need of automation, as it helps eliminates repetitive tasks, shifts focus to actual business outcomes and allows individuals to lean into aspects of the job that require human ingenuity.<\/p>\n\n\n\n \u201cWe can expect this trend toward the digital economy to continue and further accelerate,\u201d he says. \u201cProcurement has a clear role in supporting that transformation and the incorporation of intelligent technologies such as AI, machine learning and IoT into our daily lives.\u201d<\/p>\n\n\n\n Gisli Herjolfsson, co-founder and CEO of Controlant<\/a>, emphasizes the importance of other technology such as enterprise resource planning (ERP) systems, quality management systems, asset management, business analytics (BI) dashboards and blockchain platforms.<\/p>\n\n\n\n \u201cEach stakeholder most likely uses something different to track and monitor their piece of the cold chain,\u201d he says. \u201cCompanies are achieving greater supply chain and value chain orchestration by using a comprehensive control tower that unites these disparate systems and organizations. Having a fully connected and integrated control tower provides all parties, across business, manufacturing, operations, and supply chain functions, with a single source of truth.\u201d<\/p>\n\n\n\n In addition to comprehensive control towers, cloud software can help.<\/p>\n\n\n\n \u201cCloud software platforms can serve as the backbone of the information supply chain so that all supply chain participants are on the same page and to provide a clear record of product custody as it moves through the global supply chain,\u201d Bisceglie says.<\/p>\n\n\n\n \u201cIn mapping, monitoring and modeling supply chain risk, AI-based technology can serve as an early-warning system. AI- and machine learning-based platforms can quickly and effectively map the global supply chain to the nth tier (not just Tier 1 suppliers) and then deliver continuous monitoring against dozens of supplier risk factors. Previously, this monitoring was done annually and manually — processes that were highly inefficient and left massive blind spots that heavily impacted brands during the pandemic, before it, and still do.\u201d<\/p>\n\n\n\n But, technology is not only important in the movement of pharmaceuticals, but also in the sourcing from nature.<\/p>\n\n\n\n \u201cNearly half of pharmaceuticals are sourced from nature, mostly plants,\u201d says Smolke. \u201cWhile the technology required to transform these natural materials into medicines varies considerably, plant-based drugs are generally manufactured through a multi-step process that begins on specialized farms, where the medicinal crops are farmed and harvested. Once these plants arrive at processing facilities, they undergo extensive physical and chemical treatment to extract and isolate their medically relevant components. Once isolated, these components are combined with other raw materials or further modified through chemical reactions to become active pharmaceutical ingredients (APIs), the base of all drugs.<\/p>\n\n\n\n \u201cNew technologies are offering a better way to produce highly complex medicinal molecules on demand. With today\u2019s current understanding of DNA and modern computational tools, scientists can bioengineer the ingredients for medicines using plants as inspiration, not raw supplies,\u201d adds Smolke<\/p>\n\n\n\n \u201cTo do this, scientists identify the genetic code that produces beneficial molecules in plants. They replicate those molecules by inserting synthetic DNA into brewer\u2019s yeast, then grow the engineered yeast in large fermenters. In just two weeks, this process can yield highly valuable molecules at commercial scale,\u201d she says.<\/p>\n\n\n\n While technologies solve many problems throughout the pharmaceutical supply chain, companies involved in the industry have numerous pitfalls that are vital to pay attention to, the most important being temperature control. Technology, of course, has a place here as well.<\/p>\n\n\n\n \u201cTemperature control for many vaccines can go out of spec as too cold or too hot,\u201d says Beardslee. \u201cLike fresh and frozen foods, there are expirations that need to be considered for inventory. End-to-end visibility and condition tracking are important to avoid loss, tampering, delays. Do not forget reverse logistics \u2013 any special monitoring devices, containers and potentially PPE and medical waste require a plan. Future mRNA vaccines for cancer, flu, HIV need investment in ultra-cold freezers.\u201d<\/p>\n\n\n\n These temperature-control issues are such an important factor, not just for the health of patients, but also for the bottom line of the pharma supply chain.<\/p>\n\n\n\n![\"Dsc3861\"](\"https:\/\/img.sdcexec.com\/files\/base\/acbm\/sdce\/image\/2021\/03\/_DSC3861.604f8f0a28f1a.png?auto=format&fit=max&w=1440\")
Antheia<\/p>\n\n\n\nTechnology trends skyrocket<\/h3>\n\n\n\n
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ABI Research<\/p>\n\n\n\nWhat can go wrong?<\/h3>\n\n\n\n
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DHL<\/p>\n\n\n\n![\"Dpdhl](\"https:\/\/img.sdcexec.com\/files\/base\/acbm\/sdce\/image\/2021\/03\/dpdhl_1022824_22242_Community_9a.604f8f4e37e87.png?auto=format&fit=max&w=1440\")
DHL<\/p>\n\n\n\n