Having surpassed $1 trillion already, the global pharma market is expected to grow at an annual growth rate of 6.3 by 2020. The pharma industry is an important entity in the healthcare sector. Pharmaceutical companies supply medicines throughout the country based on demand. Efficiency in Pharma Supply-Chains is crucial in the delivery of these medicines as it can help save patients. Although pharmaceutical companies have adopted digital solutions in manufacturing and research, they are yet to fully embrace the digitization of supply chain and logistics. Digitization of supply chains can be advantageous to pharma as digital supply chains can seamlessly function at a quicker pace.
Digitization of Supply Chain in Stages
There are four stages where digitization can be used in to increase efficiency in Pharma Supply-Chains management:
- The planning stage
- The sourcing stage
- The manufacturing stage, and
- The delivering stage.
Planning processes can be digitized using cloud platforms and data analytics applications and help collaborative planning between stakeholders such as suppliers, manufacturers, trade partners, logistics partners, pharmacies and hospitals(customers). Cloud-based technology can help integrate all the planning systems of various supply partners and enable total transparency. In short, digitization can enable real-time monitoring of supply chains, near-real-time scheduling, demand management, inventory replenishment, compliance management and supply chain optimization.
In the sourcing and procurement stages, digitization can change how pharmacies engage with their suppliers. Digitization means using procurement applications and software that can be used for alerts, online approval of purchase orders, seamless invoices and touchless order processes. It further ensures data analysis of the sourcing and procurement stage to help companies make better decisions in the future. In the manufacturing stage, digitization can enable the use of the latest technologies and production techniques like robotics, continuous manufacturing, 3D printing and enable personalization of medicines. Digitization can in the future enable dynamic and integrated manufacturing systems with flexible production lines. It can help optimize manufacturing through production floor monitoring, real-time analytics and process monitoring, thereby increasing output and lowering machine downtime.
The last stage in the delivering stage of digitization, can automate warehousing and distribution. Technology can be used for automation in the distribution process and help build digital barcoding. RFID tagging will ensure patient safety and control drug supply. It can enable end-to-end product visibility, automated product stocking, automated inventory and delivery via drones as well as better logistics through the use of automated guided transportation devices. For instance, drugs are already being delivered to far-flung areas through drones. A start-up is testing the delivery of drugs via drones to hospitals in Rwanda.
Digitization to increase Efficiency in Pharma Supply-Chains
One of the biggest benefits of digitizing the supply chain in pharma is preventing the distribution of counterfeit drugs. Detailed tracking of the process starting from the testing stage to the manufacturing of a drug, to its supply to a stock keeping unit, to patient adherence can help in deeper insights. Digital testing and simulation techniques can be used in research and development of a drug, data analysis used by clinics, labs, apps and social media to determine the usefulness of a drug after distribution, adjust drugs based on demand using real-time data, advanced analytics in marketing to understand consumer needs and behaviour. These are some key areas where digital pharma can aid supply chain efficiency.
Digitization can help facilitate collaboration both within a company and using different tools throughout the supply chain and integrate processes throughout the supply chain. It can open up new avenues in terms of data and analytics to understand what’s happening in terms of demand, volume, gross margin, manufacturing absorption and targets. Digitization can help pharma companies reduce costs and improve cash flow as the faster a supply chain, the less capital is stuck in the supply chain. They can increase the speed of distribution, ensure the supply of the right drugs at the right time, efficiently fulfill demand, collaborate easily with other stakeholders like vendors, suppliers and partners. It can also be used to improve production processes and manage performance in real time.
Digitization also comes with risks, as cybersecurity is a key concern for pharmacies planning to digitize their supply chain solutions. Security of sensitive data like demand, supply, pricing and contract information while using cloud-based services is also a concern that needs addressing. Enough security must be in place to prevent hackers from gaining access to digitized assets, data, and machinery. Companies must use experts to help them with any challenges they may face while digitizing their operations. Regulatory bodies must ensure that they keep up with the technological advancements and be open to changes as more pharmacy companies embrace digitization.