Benefits of Digitally Transforming Supply Chain Planning in the Life Sciences Industry
Today’s life sciences supply chain is constantly changing as complex market forces including regulations, advances in technology, continued globalization, and ever-increasing customer demands combine to create new challenges. Life sciences companies are especially susceptible to changing market forces which necessitate constant evaluation of new processes and technology to ensure robust and agile supply chain capabilities. Supply chain organizations are under immense pressure as their decisions could impact the health and well-being of millions of people around the world.
While new medicines and medical devices are designed using sophisticated digital technologies, many of today’s supply chains are run in a quasi-analog/digital world with outdated tools that limit collaboration. It’s time for a digital transformation; to operate in a digital world utilizing all available information and resources. (Read more in the eBook: 5 Tips to Take Your Life Sciences Supply Chain Digital)
Supply chain digital transformation is all about the effective use of ‘Big Data’ through the application of advanced solutions to simplify, automate, optimize and accelerate supply chain operations while minimizing costs, reducing lead times and increasing agility. All while delighting the customer AND exceeding corporate goals. One of the objectives of a digital transformation is the ability to create a digital copy or ‘Digital Twin’ of the physical supply chain that accurately portrays the current state of capacities, capabilities, orders, inventory, assets, etc. This ‘Digital Twin’ can be displayed and used to analyze and plan supply chain operations based on near real-time information.
Digitization can turn the supply chain into an enabler of corporate strategy to enrich the lives of customers around the world while simultaneously driving profit and market share. Digitization enables a number of benefits including:
- Automation / Augmentation: With complex factors affecting profitability, life sciences companies need to eliminate excess cost and inefficiencies from global supply chains by automating the routine and focusing resources on value-adding activities. Digitizing the supply chain provides a foundation for automation through advanced capabilities like artificial intelligence, machine learning and natural language interfaces.
- Risk Mitigation: Life sciences companies are innovation machines operating in a difficult and risky landscape. Whether involved in discrete or process manufacturing, right-sizing inventory is critical to minimizing risk and maximizing opportunities. Accurate and real-time digital inventory information provides the input for inventory optimization. Multi-Echelon Inventory Optimization (MEIO), for example, can determine the optimal buffer locations and quantities of inventory across all interdependent stocking tiers to optimize customer service while minimizing costs. MEIO allows you to shrink inventory buffers, reduce costs by as much as 30% while providing high-levels of product availability. Essentially helping to reduce business risk.
- Multi-Plant Optimization: Life sciences companies are pressed by market forces to produce greater product variety including patient specific products. Shifting to ﬂexible production capabilities enables efficient production of a greater variety of products, but adds complexity of multi-facility scheduling. Digital information for plants, suppliers, partners and transportation lanes lays the foundation for system-wide manufacturing optimization.
- Improved Company Synchronization: It is extremely challenging to align supply capacity to variable demand for thousands of items in a regulated environment while meeting corporate objectives. The potency of ingredients changes over time, technological advancement is swift, product life-cycles are limited and market share is won or lost based on how well a company predicts market shifts and how fast they react to them. A supply chain ‘Digital Twin’ enables advanced sales and operations planning (S&OP) capabilities like ‘what-if’ scenarios and simulations that facilitate tactical and strategic decisions to minimize risk and maximize company objectives.
The availability of advanced supply chain technologies in the life sciences industry is going to continue to accelerate over the coming years. To take full advantage of technology advances, life sciences companies will need to invest in digitizing their supply chain. Waiting to react to changes in the supply chain is no longer feasible and can be disastrous to company performance and patient health. To be successful, life sciences companies must embrace digitization of their supply chains and build the ability to anticipate change. By doing so, the life sciences industry will be better positioned to efficiently and effectively meet future challenges.
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