Pharma Supply Chain Reinvented: Unlocking New Opportunities With Digital Transformation

The recent COVID-19 pandemic has brought to light the significant role of the pharmaceutical industry and its supply chain in enhancing people's health and well-being. As a result, and in addition to other factors, this industry has witnessed tremendous growth over the past two decades. The worldwide value of pharmaceutical products has grown up to sixfold, from $113 billion in 2000 to $629 billion in 2019, as stated in a report by McKinsey & Company. Let alone in 2022, the global pharmaceutical market was estimated to be around $1.48 trillion, as per a recent report by Statista.

The pharma industry's supply chain component is critical to function effectively. It is complex and multi-layered, involving several stakeholders, including manufacturers, distributors, logistics service providers, and retailers. The Covid-19 pandemic has highlighted the fragility of the global pharmaceutical supply chain. Disruptions caused in that period have shown the need for pharma companies to take a more resilient and agile approach to supply chain management.

According to a recent report by EY, "Pharma Supply Chains of the Future," greater localisation of supply chains could increase their resilience and reduce the impact of disruptions. To achieve this, pharma companies must embrace digital transformation and adopt real-time monitoring technologies.

The industry faces unique supply chain challenges as it grapples with disruptions to the distribution and safety of its products. Any challenges experienced during the distribution process can significantly affect a company's profits because every shipment, no matter its size, is valuable. More than ever, the supply chain must have greater visibility and deeper levels of insight for all parties involved in the process.

Data & Insights: The Need For The Right Information To Drive Actionable Decisions

Data collection is not a new concept in supply chain management, but the concern is whether it is accurate. The reliability, real-time tracking, accessibility, readability, and shareability of the data are all critical factors that impact supply chain management decisions.

To make meaningful decisions, stakeholders must understand how to leverage the insights gained from all of the data collected. Ineffective data management can cause serious problems in the supply chain, preventing companies from increasing efficiency, enhancing quality, and lowering prices. Gaining control through using accurate data to gain insights allows for improvement and identification of new valuable opportunities.

Pharma Technology Focus: Real-Time Tracking For Accelerated Distribution

Real-time tracking of pharmaceutical shipments speeds up distribution and helps solve frequent problems, such as compliance concerns. Supply chain executives are given the tools they need to solve challenges and gain insights that will help them make proactive decisions regarding operations thanks to customised tracking alerts and real-time data.

How Is The Pharmaceutical Supply Chain Tracking Towards Making Progress?

The pharmaceutical sector deals with a wide range of items, including prescription pharmaceuticals, over-the-counter medications, and medical equipment. For guaranteeing these medications are constantly accessible to patients in need, strict inventory control is necessary.

In the current context, many pharmaceutical companies employ sophisticated computer systems that monitor their products' movements across the supply chain to maintain inventory levels. It aids them in preventing shortages and the waste of out-of-date goods. To guarantee that raw materials and other necessary components are accessible when needed pharmaceutical companies also maintain strong relationships with their suppliers.

But there is still a chance for unexpected supply chain disruptions, like with the COVID-19 pandemic, which affected the global pharmaceutical supply chain. Companies have put in place backup measures to deal with these delays, including stockpiling essential products and seeking alternate raw material suppliers. Although it can be difficult to forecast supply chain disruptions, businesses should plan cautiously and retain 12 to 26 months (about 2 years) worth of inventory on hand.

Procurement of active pharmaceutical ingredients (APIs) and other raw materials is one of the biggest problems facing the pharmaceutical industry. It is challenging for businesses to guarantee the safety and effectiveness of their goods since many of these substances are supplied from nations with various regulatory frameworks and quality standards.

Additionally, trade restrictions and geopolitical tensions may have an influence on the availability of these essential components. This has prompted proposals for a more varied supply chain and more financial support for the manufacturing of APIs locally.

The Challenges & Opportunities Facing The Pharmaceutical Supply Chain.

Numerous stakeholders, including drug manufacturers, suppliers, wholesalers, and retailers, play a role in the complex pharmaceutical supply chain. This is why the industry is heavily regulated and must comply with various regulations, including Good Manufacturing Practice (GMP), Good Distribution Practice (GDP), and Good Clinical Practice (GCP). These regulations aim to ensure product safety, quality, and efficacy; however, it can also introduce complexity and increase costs.

In addition to regulatory compliance, the pharmaceutical industry faces numerous challenges in optimising its supply chain processes. These challenges include:

• Counterfeit drugs: The counterfeit drug market is a significant concern for the pharmaceutical industry, and it can lead to health risks for patients. Identifying and preventing the circulation of counterfeit drugs is a critical challenge for the supply chain.
• Supply chain visibility: Lack of visibility and transparency in the supply chain can lead to inefficiencies, delays, and errors. In addition, it's also difficult to track these products and ensure their authenticity. It is essential to have real-time visibility and tracking of inventory and shipments to ensure a smooth supply chain.
• Product recalls: Product recalls are an expensive and time-consuming operation. It results in a loss of revenue and damage to the brand. Robust processes must be put in place to promptly identify and fix quality concerns.
• Supply chain disruptions: Natural disasters, transportation strikes, or pandemics are just a few examples of supply chain disruptions that can significantly affect drug availability and drive-up costs.
• Complex inventory management: The pharmaceutical industry must manage a complex inventory of products with different shelf lives and storage requirements. It can introduce inefficiencies and increase costs.
• Data security and privacy: Pharmaceuticals deal with sensitive information such as patient data, intellectual property, and regulatory compliance. While implementing digital transformation in the supply chain, data security and privacy must be a top priority.
• Stakeholder collaboration: The pharmaceutical supply chain is complicated, comprising of several players such as manufacturers, distributors, wholesalers, and retailers. Implementing digital transformation requires collaboration and coordination among these stakeholders to ensure the effective adoption of new technologies.
• Temperature control: Many pharmaceutical products require specific temperature conditions during transport and storage. Maintaining the correct temperature is critical to ensure the quality and efficacy of the drugs.
• Cost management: The pharmaceutical supply chain involves various stakeholders, and managing costs can be challenging. Optimising costs while maintaining quality and safety is crucial to ensure the profitability and sustainability of the industry.

Despite these obstacles, digital transformation offers the pharmaceutical sector multiple opportunities to improve its supply chain.

For example, supply chain transactions may be recorded in a tamper-proof ledger using blockchain, increasing visibility and traceability. IoT devices provide real-time inventory tracking and lower the risk of product spoiling by monitoring and tracking items along the supply chain. Data analysis from multiple sources using AI and machine learning can yield insights that can be utilised to improve supply chain operations.

These opportunities are also available:

1. Enhanced visibility: Digital technologies such as IoT can provide real-time visibility into the entire supply chain, from raw materials to end-users, enabling greater transparency and accountability.
2. Reduced lead times: By automating and streamlining repetitive processes, digital technologies can significantly reduce lead times, resulting in faster product delivery and increased customer satisfaction.
3. Improved quality control: Digital technologies such as AI and machine learning can improve quality control by analysing large datasets and identifying patterns and anomalies, enabling proactive quality management.
4. Cost savings: By reducing waste, improving inventory management, temperature monitoring and optimising processes, digital transformation can result in significant cost savings for pharmaceutical companies.

Successful Digital Transformation Use Cases in the Pharmaceutical Supply Chain.

Digital transformation has opened new opportunities to streamline and optimize the pharmaceutical supply chain, improving patient outcomes and reducing costs. Here are some successful use cases of digital transformation in the pharmaceutical supply chain.

1. Track & Trace: One of the most significant challenges in the pharmaceutical industry is the need for end-to-end traceability of drugs. With the help of digital technologies like blockchain and IoT, pharma companies can track the movement of drugs from the manufacturing facility to the end user, ensuring the safety and authenticity of medications. Some leading pharma companies are already implementing blockchain-based track-and-trace systems. It monitors the supply chain and prevents counterfeit drugs from entering the market.
2. Real-Time Monitoring: Real-time monitoring of the supply chain is critical to ensure that drugs are delivered to patients on time and in the right condition. Digital technologies like IoT temperature monitoring sensors and RFID tags can now be used to track the temperature, humidity, and other environmental conditions of drugs during transportation. A top APAC based pharma company has embraced real-time monitoring by partnering with a specialised IT services and consulting company to implement a data-driven cloud platform that enables real-time monitoring of its supply chain. This platform allows the company to track the movement of goods and monitor conditions in real-time. As a result, the company could reduce the risk of supply chain disruptions and improve the quality of its products. This showcases the strength of developing partnerships in order to implement solutions to add further value to clients. This is demonstrated by our partnership with a cold chain packaging company to enable real-time monitoring for their clients. This furthers their own offerings in conjunction with our solutions.
3. Automation Of Repetitive Tasks: The pharmaceutical supply chain procedures can be streamlined with automation. Robotics and automation technologies enable businesses to automate monotonous processes like labelling and packaging, which reduces errors and boosts productivity. A leading pharma company has put in place a robotic vision system that scans and recognises the bar codes of different products before packaging. Additionally, it identifies items within larger shipment boxes using the company's database. The company's data-gathering procedures were improved as a result of this added level of industrial automation. It also helped to keep workflows consistent and minimise the possibility of human error. While reducing errors, it raised the calibre of its procedures and quality control.
4. Real-Time Asset Tracking: Having limited end-to-end visibility while their products are in transit is one of the issues that pharmaceutical businesses frequently deal with. As part of their compliance requirements, they must monitor these operations. It also needs to ensure that these goods don't get damaged by shock, temperature and humidity fluctuations, whether the vehicles are following the proper route etc. In the life sciences industry, a Fortune 500 company has partnered with Adapt Ideations to take advantage of their real-time asset tracking device Kelvin M200 for operational efficiency and to protect high-value shipments. Additionally, these devices provide real-time monitoring and end-to-end visibility of temperature-sensitive products that are handled by them. Analysing the insights generated from regular monitoring has helped the company improve their operational processes.

These successful use cases demonstrate the potential of digital technologies to revolutionise the pharmaceutical industry and improve patient outcomes. By embracing digital transformation, pharma companies can stay ahead of the curve and lead the way to innovation.

Future Of Pharma Supply Chain In The Digital Age.

Traditionally, pharmaceutical companies relied on complex and lengthy supply chains to deliver crucial medicines to patients. However, it has consistently remained at the forefront of innovation, refining its procedures and business practises to meet the worldwide demands of patients. Nevertheless, the industry has faced more difficulties recently, from regulatory pressures to shifting market dynamics. Pharma businesses are adopting digital transformation to streamline their supply chain processes and create new opportunities.

Emerging Trends In The Digital Transformation Of The Pharma Supply Chain.

The digital transformation of the pharma supply chain is driven by several emerging trends. The rising use of data analytics to improve supply chain operations is one of the most significant developments. Pharma firms can gain insights that enable them to make better decisions and increase operational efficiency by utilising data from multiple sources, including production facilities, transportation networks, and market demand.

Another development is the use of IoT tools to keep track of the humidity and temperature of medications while they are being transported and stored. IoT sensors can aid in the early detection of possible violations of set conditions enhancing the quality and safety of medicines. Adapt Ideations' temperature monitoring solutions utilise IoT technology enabling data to be transmitted to our secured cloud portal allowing all stakeholders to view data in real-time and receive alerts when violations occur.

Artificial intelligence has aided supply chain forecasting as well as demand planning. AI can uncover patterns and trends by analysing vast amounts of data, leading to more precise forecasts of future demand. By doing this, wastage can be minimised and accurate quantities can be shipped to suppliers improving product availability for patients.

Strategic Implications For Pharmaceutical Companies.

For pharmaceutical businesses, the digital transformation of the pharma supply chain has significant strategic implications. Companies must first invest in modern digital technologies and create the infrastructure required to support them. This can require substantial investments in cybersecurity, data analytics, and IT infrastructure. However, with the increasing demand for products enabling digital transformation they are now becoming more affordable and increasingly easier to implement with value-added services from suppliers.

Second, businesses should evaluate their supply chain models and how this may benefit from digital technologies. To support this, it may be necessary to collaborate with new partners to develop new solutions, like tech firms and logistical service providers.

Finally, businesses should look towards creating an innovative and flexible culture. The pharmaceutical supply chain is evolving swiftly. Therefore, firms need to quickly adapt to new technology and market circumstances.

To sum up, the pharmaceutical sector is on the cusp of a digital transformation that could fundamentally revolutionise how medicines are manufactured, distributed, and delivered to patients.

Companies can achieve better agility, transparency, and resilience in their supply chain operations by adopting innovative technologies and employing real-time monitoring solutions and data analysis.

In a global market that is continually changing, being able to swiftly identify and address disruptions, predict demand trends, and optimise inventory levels can give businesses considerable competitive advantages.

The pharmaceutical sector must seize the chances offered by digital transformation to open up new avenues and spur innovation throughout the supply chain. This will ultimately help the pharmaceutical industry to optimise its processes and how they handle supply chain disruptions.

Check out our innovative IoT-enabled asset tracking and monitoring solutions for your pharmaceutical supply chain operations if you're looking for emerging digital transformation technologies.