Aninda Shome, Director-Global Supply Chain, Pfizer India, in interaction with, Industry Outlook, shares his views on the pharmaceutical Supply Chain. During the conversation, he throws light on the issues pertaining to On-time in-full (OTIF) delivery, optimizing inventory levels and more.
For many pharmaceuticals, even a slight temperature deviation during transit, or exposure to moisture, can render a shipment unusable, resulting in millions of dollars in losses. In light of this, can you elaborate more on the importance of effective supply chain management in the pharmaceutical industry?
An important aspect of supply chain management in the pharmaceutical industry is to shorten timelines and enhance access to meet the evolving healthcare needs of people around the world. The efficiency of a supply chain process depends on the quality of inventory management and coordination.
Given the sensitive and delicate nature of pharma shipments and the criticality of getting them across to the end users in a safe and timely manner, it is clear that these products have to be under Real Time Temperature Monitoring. In pharma, the product being shipped can fall under any of the four categories:
• Cold Chain
• Cool Room
The pharmaceutical industry uses a large variety of modern monitoring devices and systems to help with temperature tracking, medication production, effective storage, distribution, robust packing, warehousing and transport facilities to ensure temperature stability to the last point of delivery and use. Combining digital applications with each operational step in the supply chain and raising awareness through training programs for evolving processes and protocols is a must.
Route validation for new lanes, Green Channel and direct port delivery custom clearance should also be evaluated and established to guarantee all medical cargo arrives safely and reliably at the destination.
Pharma companies should have a strong last mile distribution from the wholesaler to the points of dispensing (e.g. pharmacy, hospital, clinic, dispensing doctor and others) as it ensures on time, high quality, effective and safe delivery of products.
The ultimate result should be an efficient supply chain process that is less capital intensive and, consequently, reduces an organization’s operational costs.
On-time in-full (OTIF) delivery has quickly become an industry standard in the pharma domain and real-time, end-to-end data insights is key to meeting OTIF delivery commitments. In your opinion, how can pharma companies mitigate the risk of OTIF delivery failures?
Pharmaceutical cold chains do not have a margin for errors. Most pharma shippers and logistics providers are known to use passive data logging devices that record data for downloading upon retrieval. In pharma, OTIF is a top priority and an all-or-nothing proposition: delivering on time but not in full, or in full but not on time, is equivalent to not delivering at all.
It is imperative today for pharma companies to have a right logistic network strategy that augments go-to-market and in turn meets delivery timelines. Real-time, end-to-end data insights and visibility from a trusted source are critical to collaborating and managing in-transit shipments, to meet OTIF commitments.
To cater to the rising demand of the pharmaceutical trade, end-user industries are availing cold chain logistics.
Having reliable logistic service providers with appropriate warehousing and transport infrastructure contributes significantly to meet market dynamics. In addition to this, creating real time visibility with first paying customers, keeps them informed about delivery schedules and product arrivals, resulting in better customer satisfaction and buyer experience.
To move up the value chain, increasing the resilience and agility of supply chains, with technology as a pivot, is crucial for the pharma sector. Pharma companies are now emphasising the importance of digitisation and its benefits for various business functions, especially in operations and logistics. Digital interface along the entire supply chain management process plays a major role in maintaining OTIF KPI’s.
The perishable nature of drugs makes it harder for companies to maintain safety stocks. How can pharma companies find the right balance to optimize their inventory levels based on their product portfolio and previous demand figures?
To maximize revenue of high-margin products and drive customer satisfaction, pharma companies usually maintain high levels of safety stock. Robust demand planning supported by predictive analytics through AI and IOT coupled with market insights can help in optimizing inventory levels. Accurate demand forecasting improves the efficiency and robustness of production processes (and the associated supply chains) as the resources will be aligned with market requirements leading to reduction of inventories and wasteful stock piling.
Today when supply chain disruptions can be of global significance, it is imperative for pharma players to collaborate and partner with vendors who understand their manufacturing cycles, and procurement of raw materials to meet demands on time. Selection of manufacturing sites and an agile manufacturing network are key for reducing delivery cycle times and ensuring On Time InFull (OTIF) delivery.
Data-driven demand forecasting and planning have thus increasingly become key for logistics planning and pharma companies are gradually investing in data storage and analytics that offers them abundance of quality data for predictive analytics.
Pharma is one of the most regulated industries in the world and navigating compliance at each step of supply chain in the industry is a complex process. How can supply chain leaders in the pharma domain keep abreast of the ever-evolving regulatory framework in the industry?
In the current times, end-to-end transparency across the supply chain is utmost critical. Highest level of quality consistency and patient safety makes it essential for pharma domain players to remain abreast of regulatory frameworks that are evolving so swiftly.
These are some of the measures that pharma companies can collaboratively take to ensure better enforcement of regulatory standards:
- Routine internal audits by local and global audit and compliance committees to ensure best practices are followed.
- Engagement with industry associations and government to support evolving business needs.
- Awareness through funded training programs on core topics, pharma quality summits, and best practices sharing groups, and FDA readiness workshops.
- Increase focus on training through high-impact programs in partnership with educational institutions and development firms to enable employees to meet global standards.
Technological advancements have been a game changer in so many industry verticals. In your opinion, how has technology helped the pharmaceutical supply chain to improve its efficiency? Also, what are some of the latest technologies supply chain leaders should incorporate into their pharma business?
Pharmaceutical supply chains in India are very complex in nature. However, implementation of technologies and digital transformation has led to streamlining processes and ensuring better customer satisfaction. The global pandemic has made pharma companies relook at the technological upgradations that enhance business and ensure better access to medical products across the globe.
Tech-enabled supply chains in the pharma industry provide end-to-end real time visibility that allows us to monitor the route of the goods and their exact location at any given point. Access to this data not only increases the efficiency and quality of medicines distributed, but also encourages patient-centered care. Technology also helps pharma companies provide customer-centric supply chain management policies wherein the focus is on the customer experience through all operations.
Incorporating data and analytics into decision-making cycles can bring transformative impact on business decision-making and deliver more customer-centric products. Many organizations have seen the benefits such as improved B2B communication, order processing and inventory management automation, autonomous supply chain operations through Robotic Process Automation and Robotic Desktop Automation thus streamlining overall operations.
Supply Chain Digital Twin, SnOP Evolution, Control Towers for Track-n-Trace and Blockchain are some of the latest technologies that will help pharma companies achieve global supply chain optimization, greater efficiency, smarter security, and patient-centricity.
What are some of the major changes and innovations you foresee happening in pharmaceutical supply chains that will improve quality and streamline operations?
Collaboration and consolidation at each leg of the value chain right from traditional warehousing partners to 3PL/4PL and B2B partners will be an important aspect of supply chain in the pharma domain. Beyond medicines, pharma companies need to focus on developing innovative delivery systems and advancing go-to-market models through pioneering in contracting, increased use of real-world data and addressing health disparities.
Rapid growth of the internet coupled with the convenience of e-commerce has led to medicines being sold through e-pharmacies, a segment that has opened a plethora of opportunities.
Pharmaceutical e-commerce can enable easy, efficient, and transparent prescription drug buying, inevitably leading to higher demand for such offerings across the board in B2B and B2C segments. It is crucial for pharmaceutical vendors and manufacturers to prepare now to keep up with and successfully compete in this fast-growing market. Lastly, pharma leaders must ensure vigilant quality control through the entire gamut of production and supply chain activities to ensure the safety, efficacy, and dependability of every product.