As life sciences companies struggle with limited visibility into their supply chain – as well as their partner’s supply chain – their ability to deliver products to market more rapidly, reduce capital expenditures and manage risk is significantly curtailed.
By Bill Romano, Solution Specialist, CSC Life Sciences
According to sobering findings from analysts, an average $1 billion company spends 1,000 hours every week managing suppliers and their information, and at least a quarter to a half of that time is spent on supplier information management alone – or the equivalent of six to eight full-time employees for a large company. It all starts with the ability to have in real time information about where products are in the supply chain ecosystem.
Not only can the supply chain be the major contributor to a life sciences company’s costs, but it also controls 100% of the inventory and provides the foundation for the majority of the revenue generation. Furthermore, the industry is heavily impacted by regulations, counterfeiting and limited shelf life; meaning life sciences companies need technologies that can provide end-to-end visibility of their products across all parties in the supply chain. In a complex and global supply chain environment, companies need to go beyond basic track and trace functionality to gain real-time visibility into all the processes and participants in the supply chain, and create a seamless flow of end-to-end transactions.
Overcoming the Barriers
Supply and demand must be tightly coordinated in conjunction with the synchronization and visualization of the movement of product across the entire supply chain.
To improve visibility it’s important to understand the most challenging issues companies face with their supply chains. According to “The top ten health supply chain issues: Perspective from the field,” the three major barriers are:
- Lack of complete supply chain visibility/coordination, particularly beyond tier 1 suppliers
- Product demand visibility, making it difficult to stock product to feed demand
- Shipment visibility, creating challenges when it comes to driving compliance
Poor supply chain visibility can severely impact life sciences companies through:
- Unnecessary inventory fluctuations
- Higher freight costs
- Decreased productivity from manually intensive processes
- Loss of revenue from product shortages
- Increased risk from global events
A 360-Degree Supply Chain View
Real-time visibility can provide insights into activities beyond your control. It also provides the ability to tie all points of data together to create a single, cohesive story as to where products are anywhere in the world and what effect events (such as natural or made-made disasters) will have on those products, sites and the supply chain.
With visibility of products – where they were, where they are now and where they are going – you gain insight into product demand across all geographies. With the ability to track all of your products in real time, through the entire supply chain, you can begin to monetize and analyze the impact of inventory and profitability.
Key capabilities of a real-time visibility platform should include:
- Managing multiple product lines, across multiple distribution channels, in multiple regions and with multiple collaborative partners — all from a centralized location
- Expected-time-of-arrival modeling that compares actual to expected performance
- Exception dashboards that identify products that are not moving according to plan
- Shipments rerouted to get the medicine to areas they are needed
- Managing sudden shifts in demand
Most supply chain executives are already inundated with information, and having complete end-to-end visibility is of limited value unless it is combined with the ability to rapidly and automatically respond to this new information. Real-time visibility should provide a 360-degree view of your entire supply chain: from your suppliers, giving you a view into production risk; your facilities; as well as your products in both transit and at final disbursement. This 360 degree view will enable the supply chain to accurately manage financial exposure and risk, drive continuity, optimization, planning and product security. Such visibility makes it possible to influence results in real time, automatically, by changing the schedule, point of release or route from a remote dashboard. It’s about getting the right product to the right location at the right time.
Into the Future
This ability to have a cohesive, 360-degree view will become even more crucial in the future as medicinal products and market dynamics impact the supply chain in different ways. Many treatments of the future may require totally different distribution techniques from those used to distribute products today. For example, more and more products will be delivered to the patient directly, requiring that the supply chain is able to harness the most efficient “final mile” distribution networks in order to deliver medicines to the door as economically as possible.