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Supporting a Healthy Pharma Industry

The supply chain for pharmaceutical warehousing and life sciences is complicated and risky. It involves everything from managing distribution channels to increasing visibility, security, and safety. Here are some strategies and technologies that improve efficiency in supply chain management.

The market for biopharmaceuticals and pharmaceuticals is increasing, and this has driven the demand for logistics support. (Biopharmaceuticals) are drugs and medicines made from biotechnology or living matter, including cells and bacteria, in industrial processes. Grand View Research estimates that the global pharmaceutical manufacturing industry, which was valued at US$324.42 billion in 2019, will expand at a compound annual growth rate of 13.74% from 2020 to 2027. According to Grand View Research, the global pharmacy logistics market will increase by 8.5% annually from 2021 through 2028.

These medicines are a boon for patients and companies that supply them. However, it presents some challenges. It is difficult to accurately forecast demand while managing costs, complex transportation, and cold-chain needs, even when capacity is tighter. The fact that a truckload full of medicine can cost millions makes security a concern.
Several supply chain issues can arise when working with prescription drugs and other healthcare products. Jeffrey Tucker, Tucker Company Worldwide’s chief executive officer, points out that one manages the distribution channels. Tucker Company Worldwide is a leader in life sciences transportation.

Also, profits can be quickly affected by penalties that large retailers levy for shipments not delivered on time, in full (OTIF).
Tucker states, “It is vital to plan and execute transportation carefully.”

Technology in Moderation

Technology is playing an increasing role in the distribution and transportation of pharma products. The advantages of solutions that include artificial intelligence (AI), robots, automation, and the Internet of Things are more remarkable than many legacy systems such as conveyors or automated storage and retrieval systems, which require substantial upfront investments in money and management time attention and warehouse space. Jett Chitanand, global sales director for healthcare with Locus Robotics (a company that makes autonomous mobile robots), says that these solutions offer several benefits. These solutions are often designed to address a specific demand or need.

Chitanand claims that businesses and priorities can change, which makes these investments less attractive.

Many legacy supply chain monitoring software has tended to collect information in silos, leading to visibility being lost. WBR Research and Control recently conducted a survey. They found that 57% of those surveyed felt they had experienced the loss of visibility and bottlenecks as their supply chains of active pharmaceutical ingredients and raw material. Gisli Sherjolfsson, Controlant’s co-founder, says that despite the failures of many previously tried solutions, efforts to transform supply chains for pharmaceuticals were “slow-moving” compared to current ones.

But that’s changing. Per Hong, senior partner at Kearney in the strategic operations group said that the pandemic had “starkly exposed significant vulnerabilities in pharmaceutical and medical product supply chains.”

He adds that the pandemic is almost certain to reshape global supply chains in life science to increase resilience, provide access to more local resources of capacity and supply, and manage allocations for vital products.

The pandemic’s bright spot was, in fact, the urgency that drove industry players to work together to develop ultra-cold chains transport, logistics, controls, and control systems. This collaboration has resulted in ongoing innovations, says Anne Marie O’Halloran, managing director of Accenture’s industry X.0 supply chain and industry practice.
One example is the use of intelligent freezers. One breaks down, and a notification indicates that the freezer’s temperature rose or that a door was left open. Although this technology isn’t new, placing it in distribution, fulfillment, and manufacturing centers is.

Forecast Accuracy

According to Chitanand, forecasting supply and demand is more difficult when dealing with many pharmaceutical drugs. Stockpiling excess inventory is dangerous because it could cause it to expire before it is used. Supply chain leaders must have enough stock to meet anticipated demand.

As personalized medicines become more common, this challenge will only get more severe. Barry Heavey is the managing director at Accenture Life Sciences. He explains that new cancer treatments have smaller patient populations as they only treat a subcategory. These treatments can be expensive to create and manufacture, so it is important to ensure they are not stalled in any part of the supply chain.

Hong believes artificial intelligence can improve visibility and create better forecasting capabilities. This allows companies to respond to changes in demand and pivot accordingly.

Handling Labor Shortages

Technology is constantly evolving, but strong supply chains depend on people. Although the tight labor market isn’t exclusive to pharmaceutical products and biopharmaceuticals, the potential consequences of having too few employees can be severe, such as inaccuracies or delays.

Chitanand says, “If a healthcare provider isn’t given the right product at a timely time, it could delay care.”

Automation is becoming more popular in organizations to speed up operations, improve accuracy, and leverage data. Fortune Business Insights projects that the global market in logistics robots will increase by more than 16% each year until 2028 when it will reach $17.8billion. A Deloitte report entitled Intelligent Drug Supply Chain – Creating Value From AI states that tools such as machine learning and natural speech processing “will be key to minimizing human error, leveraging operational data for strategic insights and improving productivity and accuracy of processes.”
Despite the many challenges facing the pharmaceutical supply chain, it is still moving forward to solve them. This will ensure that drugs and other therapies are safely and efficiently delivered to their intended recipients.

This is what the companies featured here are doing.