Life sciences digital supply chain planning will help the industry meet growing challenges more efficiently and effectively.
When ranking supply chains that impact people’s daily lives the most, healthcare products usually pop up in the top three, behind food and water. The life sciences industry has managed to deliver critical advancements on a global scale, including vaccines to combat pandemics and a wealth of other drugs, treatments, medical devices, and over-the-counter cures that improve lives worldwide.
But for products so important, out-of-control pricing of healthcare treatments and prescription medications are taking a toll on the market. A recent Gallup survey reported that 46 million American patients are so financially insecure that they cannot afford to follow their healthcare provider’s recommendations to the fullest extent. In addition, one in eight surveyed adults cut back their spending on necessities such as food, clothing, and utilities to pay for them.
Researching and developing new products and ensuring regulatory compliance is inescapably capital-intensive. Yet, the economics of life sciences digital supply chain planning – from which every process runs smoothly from the lab to a commercial or clinical pharmacy’s shelf – can help these companies reduce prices while driving better profits.
Digitalizing Supply Chain Planning
While new medicines and medical devices are designed using sophisticated digital technologies, many of today’s supply chains run in a landscape that’s part analog and part digital, with outdated tools that limit collaboration and visibility. And as a result, the accuracy of supply chain planning is particularly susceptible.
Constant shifts in market forces, regulations, globalization, and demand must be routinely evaluated against internal processes, suppliers, warehousing and logistics partners. Looking at this information from the same view helps optimize production capacity, improve value chain efficiency, and accelerate response to emerging patient needs.
The objective in life sciences digital supply chain planning is the effective use of data to simplify, automate, optimize, and accelerate supply chain operations while minimizing costs, reducing lead times, and increasing agility. In return, the supply chain organization enables the business to delight the customer and exceed corporate strategic goals and revenue growth.
To further advance supply chain planning capabilities, companies can create a digital copy, or digital twin, of their physical supply chain. This technology accurately represents the current state of all aspects of the supply chain, such as production capacity, business capabilities, customer orders, available inventory and operational assets. Using this information in near-real time, companies can test new scenarios, analyze their impact, and implement the change in their active supply chain operations confidently.
Making Life Sciences Digital Supply Chain Planning More Beneficial to Everyone
As digital technologies continue to advance, life sciences companies have a tremendous opportunity to create supply chains that are increasingly cost-effective and responsive. But more importantly, they can turn their supply chain into a strategic enabler of driving profit and market share while enriching the lives of people worldwide.
By continuously embracing the full potential of digital supply chain advancements, planners can offer numerous advantages, including:
1. Process automation and augmented insight
With complex factors affecting profitability, planners can help eliminate excess costs and inefficiencies from global supply chains. They can automate routine processes and analytics and focus more on value-adding activities through intelligent technology, such as artificial intelligence, machine learning, and natural language interfaces.
2. Proactive risk mitigation
Whether involved in discrete or process manufacturing, right-sizing inventory is always critical when mitigating risk and taking on new opportunities. Multi-echelon inventory optimization (MEIO) leverages accurate and real-time digital inventory information to determine optimal buffer locations and quantities of inventory across all interdependent stocking tiers to enhance customer service and minimize costs. As a result, MEIO allows planners to shrink inventory buffers, reduce costs by as much as 30%, and provide high levels of product availability – all hallmarks of a low-risk supply chain function.
3. Multi-plant optimization
Today’s market dynamics create extraordinary pressure to produce a greater variety of finished stock, including patient-specific products. By shifting to ﬂexible production capabilities, supply chains can deliver on that expectation more efficiently. But in the meantime, planners must limit the complexity of multi-facility scheduling by leveraging information from all plants, suppliers, partners, and transportation lanes.
4. Company synchronization
Aligning supply capacity to variable demand for thousands of items in a regulated environment is challenging. Ingredient potency 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. Yet, a digital twin can help planners get ahead of these challenges by supporting an advanced approach to sales and operations planning (S&OP). In return, planners can take advantage of what-if scenario planning and simulation capabilities to make tactical and strategic decisions that mitigate risk and maximize company outcomes.
Optimizing the Value of Innovation in a Difficult and Risky Landscape
Undoubtedly, life sciences companies are under immense pressure as their decisions could impact the health and wellbeing of millions of people around the world. These innovation machines compete in an environment where the reward of improving people’s lives worldwide is high and innovating breakthroughs is remarkably difficult and risky.
But as the availability of advanced supply chain technologies continues to accelerate over the coming years, the entire industry has an opportunity to meet future challenges efficiently and effectively and deliver more affordable healthcare products.