Future-ready supply chains
The COVID-19 pandemic has several lessons for India Pharma Inc as it embraces new strategies and technologies to rebuild and fortify its supply chain
The COVID-19 pandemic underscored the need for a radical overhaul in supply chain management, especially in the life sciences sector. Faced with challenges unprecedented in scale and scope, the sector had to reassess its approaches and strategies to contain and mitigate the impact of the pandemic on its global supply chain.
Over a year after the onset of the coronavirus pandemic, as the world starts to plan for recovery, it is time to revisit the lessons learnt about supply chain reliability and risk and take stock of the measures being undertaken by the pharma industry to build supply chain resilience.
Especially so, since it is becoming evident that disruptions are likely to increase in regularity and scale, caused by varying factors including emerging pathogens, geopolitical events, climate changes and public health disasters.
The supply chain of the future will be defined majorly by the following characteristics:
Flexibility and agility
As closed borders, nationwide lockdowns triggered fears of drug shortages on a global scale, highlighting the dangers of over-reliance on few sources of supply, the pharma and healthcare sectors were forced to adapt and innovate to develop local capacity and secure local supply.
The importance of improving operating and supply chain models were also highlighted since increasing volatility across the world demands a supply chain that has the flexibility to tackle spontaneous or sudden challenges or opportunities. At the same, it also has to evolve continuously to stay relevant in an ever-changing landscape.
Thus, a key lesson for supply chain management was the need to create and implement agile strategies which will help in eliciting a rapid and effective response to changing market demands; have the capacity to tailor products and services delivered to customers, the ability to produce and distribute products cost-efficiently, curb manufacturing costs and boost competitiveness.
Interestingly, since the onset of the pandemic, there are also several instances in India’s pharma sector wherein companies began to repurpose their capacity to start manufacturing products that are in high demand. For instance, India became one of the key global suppliers of sanitisers, PPE kits and hydroxychloroquine, once touted as a game-changer drug against COVID-19.
As Sudarshan Jain, Secretary-General, Indian Pharmaceutical Alliance reminds, “The COVID-19 pandemic has put the pharma industry on a transformational journey. As a trusted global healthcare partner, India has shown tremendous reliability to ensure a continuous supply of quality medicines, including those essential for the treatment of COVID-19. No drug shortages were reported domestically, and Indian pharma companies were able to meet global demand as well.”
This business agility will be crucial to success but to make such turnarounds easily possible companies should take concrete steps to improve their capacities and capabilities.
As Rishabh Bindlish, MD, India Life Sciences and Global Generics Lead, Accenture advocates, “In crises such as the COVID-19 pandemic combined with macroeconomic and regulatory risks, supply chain planning and execution of operations need to be tightly integrated to drive business value. Building resilience with robust scenario-based planning and execution capability will be vital for business continuity and growth.”
In the present day, customers have to be at the centre of every business strategy. This is true in the case of supply chain transformations as well. The COVID-19 pandemic has underscored the importance of a responsive and adaptable supply chain for the life sciences sector with different endpoints of delivery and information sharing, to ensure that drugs and daily necessities reach those who need them at the right time. And, this would be possible only by comprehending the changing expectations of customers.
A report from Accenture titled, ‘A license for growth: customer-centric supply chains’ informs, Supply chains have traditionally been seen as drivers of efficiencies and scale, providing competitive cost advantage. In recent years, though, the role of supply chains has evolved beyond efficiency to growth.”
It adds, “In the aftermath of COVID-19, we expect customers to continue to demand an experience in which supply chains respond with a higher purpose.”
Bindlish elaborates, “Given the current challenges, customer-centricity of business is no longer an option but a necessity. This becomes even more critical for the supply chain as it plays an important role in connecting customers and the operations team. A customer-centric supply chain is a key to unlocking differentiated service offerings that drive revenue growth, improve EBITDA performance, and meet unique customer needs.”
“A customer-centric supply chain helps pharma companies innovate better by using data as an insight generation engine to design new products and services around the customers’ needs. It enables companies to connect with external parties for real-time, end-to-end visibility and integrated planning and execution. It can further optimize day-to-day operations using analytics, performance monitoring and continuous innovation. This approach enables a service-oriented operating model that leverages a hybrid workforce for improved customer experience. Additionally, it helps configure the supply chain into an asset-light ecosystem that delivers customer experience in unique microsegments,” he adds stating that intelligent, customer-centric supply chains powered by digital can help pharma companies create efficient, resilient, and profitable operating models.
Even before the pandemic, the importance of this aspect was understood and acknowledged. But, the pandemic has reemphasised its criticality to deal with complexities and challenges in supply chain management. It has proven that visibility and transparency across the supply chain are pivotal to decision making, be it for inventory planning, selecting the right partners, deciding the delivery points, or optimal logistical processes. It is important for cost control and customer satisfaction too. Be it inadequate inventory management, communication gaps, or slip-ups and holdups – most of the issues can be traced back to a lack of visibility. Thus, it is essential for all other supply chain functions.
This was one of the key topics under discussion when the world was preparing for the COVID-19 vaccination drive too. Even now, many of the hurdles in this massive endeavour stem from a lack of adequate traceability.
As Ashutosh Mayank and Prajakt Raut-Managing Partners at Supply Chain Labs, Lumis Partners explain, “Pharma and medical equipment supply chain, warehousing and logistics were always a specialised field with specific requirements, including regulatory compliances. However, the distribution and administration of COVID-19 vaccines have complexities of a different level – think of it as the complexity and scale of holding elections across the country. Given that multiple doses of the vaccine are required adds to the additional trace and track of not just the products but the persons receiving it as well.”
Luckily, we are witnessing a lot of activity on this front. As Jain elucidates, “COVID-19 accelerated innovation in the pharma industry. Facilitating remote monitoring to enable operational continuity became an important aspect for a resilient supply chain. Digitisation and data traceability helped in supply chain risk monitoring and management by receiving real-time updates while ensuring the correct conditions for delivery. The pandemic also presented the need for greater collaboration among all part of the supply chain management. This helped in ensuring better efficiency in responsiveness while monitoring developments in real-time.”
Mayank and Raut update, “The changing environment will create a favourable and enabling environment for more innovators to enter the field. Not just in pharma and life sciences, adjacent opportunities to build efficiencies in the entire supply chain – from distributed procurement, manufacturing, warehousing, logistics and reverse logistics – corporations and governments are looking at innovations and technologies to build efficiencies, transparency and visibility in the entire supply chain.”
Startups like StaTwig and its solution, VaccineLedger is a case in point. Siddharth Chakravarthy, CEO, StaTwig informs that VaccineLedger is an open-source blockchain network that has been internationally recognised by UNICEF and Gavi as innovative and critical.
It ensures the safety and quality of the vaccines in the supply chains by tracking them from manufacturer to beneficiary using digital IDs. VaccineLedger is powered by the data that is collected at several stages in the supply chains such as warehouses, airports, manufacturing plants and other touchpoints. As the data is stored on a blockchain ledger it provides tamperproof records of all vaccines.
He also states that pharma and other industries will learn a lot about traceability and security of products in the supply chain through COVID-19 vaccine distribution.
Thus investment, innovation in supply chain solutions and technologies to provide end-to-end traceability will continue to grow.
To cite an example, JB Chowhan, Founder & Chairman, Vardhman Health Specialities informs that the VHS Group has already started investing in digital technologies, platforms, tie-up with manufacturers and with other stakeholders of the pharma supply chain, over the last two years. He further explains that the Group’s venture, VHS LogiTech focuses on connecting customers or patients to manufacturers in an end-to-end traceable manner using its patent-pending technologies on IoT and Blockchain to ensure safety, compliance requirements and maintain the integrity of pharma products since this would help to keep the not-of-standard quality and spurious drugs at bay.
Most of the other providers are also making significant investments in improving their traceability and visibility across the supply chain. Changing behavioural patterns of consumers, regulations and policies etc are also fueling this development.
Supply chain processes must be compliant with regulatory requirements and must ensure the safety, efficacy, integrity and quality of the products. Moreover, appropriate security measures to reduce the potential for theft, loss, tampering, etc must also be taken as the market landscape continues to evolve. To enable this, the