Consulting News

Digitisation can make backend pharmaceutical operations more effective and efficient

by Mustafa Khan on 17 Jun 2021

The digitisation of the pharmaceutical sector is accelerating and the next wave of the digital revolution appears to be geared towards transforming pharmaceutical operations.

The digital revolution has been disrupting the pharmaceutical sector for years – but now – the pace of digitisation is accelerating and it seems that the next wave of the digital revolution is geared towards transforming pharmaceutical operations. Digitisation has been contributing to the overall sustainability and success of the pharmaceutical industry by engaging with various aspects of the industry. For instance, product development is significantly accelerated through digital methods and as we will see, so are backend business operations.

 

Digitisation increases manufacturing efficiency and productivity

Survey results from the past year suggest that the industry’s roadblocks may derive from the application of outdated supply chain and manufacturing processes. Digitising supply chain processes and backend operations can catapult the pharma industry into the modern era and help drive innovation – this may have been the solution that pharma had needed for years to elevate its operational processes!

The pharmaceutical sector has traditionally been hesitant to apply digital solutions in improving supply chain operations due to fears of high costs. However, as the challenges for pharma continue, now exasperated by the pandemic, digitisation offers tremendous opportunities to help companies overcome their hurdles by increasing manufacturing efficiency and productivity.

In a recent interview, Novartis CEO Van Narasimhan claimed that for far too long digital investment ideas had been perceived as “nice-to-have experimental areas that may transform us in five years”. However, the pandemic made digital investment “fundamental” for the pharma giants. Digital solutions offer pharma the ability to collect data in real-time after which they can test performance analytics that produce instant results. This is an important aspect of the operational process, as manufacturing tools are limited in what they offer if they are working with incomplete and faulty data.

 

Digital supply chain transformation

Figure 1: source

Research shows that manufactures and vendors largely agree that plant floor production could benefit the most from digital investment. Additionally, a quarter of pharmaceutical manufacturers believe that supply chain management could improve heavily from increased digitisation.

According to Dr. Marcus Ehrardt, an adviser on life sciences strategy:

“Digitization allows companies to fully integrate their supply chains and improve operational processes, making them more adaptive and responsive. As a result, planning accuracy, manufacturing efficiency and productivity, inventory levels, and service levels improve.”

However, companies are sometimes cautious to invest because of risk factors such as cybersecurity. Potential hacks and bugs could disrupt all operations for the pharmaceuticals, which is of critical concern if products are prevented from reaching patients in time. Another key reason is high margins that result in a stronger emphasis on product development and sales as opposed to optimising operations. Despite this, it has become clear to experts that the competitive advantage offered through digitization outweighs the potential risks and costs.

 

Overcoming the obstacles of pharma through a digital supply chain ecosystem

Building a supply chain ecosystem can improve all stages of the operations value chain: plan, source, make, deliver and can help companies overcome several roadblocks such as:

  1. The demands of global markets that require companies to operate across various regions, making supply chain management more complex. 
  2. The growing competitiveness of price and cost pressures that require more efficient supply systems. 
  3. Increasingly personalized medicine demand greater supply chain segmentation 
  4. Calls for increased visibility and more efficient quality control as regularity controls increase throughout the globe.

Digitising supply chain operations can fundamentally boost productivity and enable the following:

 

Globally integrated supply chain networks and greater network scalability. 

Pharma companies have complicated supply chains that include suppliers of raw materials, wholesalers, distributors to pharmacies, patients and hospitals. Digital methods such as cloud computing enable pharmaceuticals to link all actors through one integrated system, making networks global and more scalable.

 

Shorter lead times and reduced stockouts.

Sensors within the supply chain system can relay continuous information, enabling operational leaders to make quick decisions as conditions change. This can reduce lead times from months to days, which has the potential to reduce stockout, ultimately saving patients’ lives.

 

Improved overall equipment effectiveness (OEE) and automatic corrective actions. 

Digitisation can reduce the downtime of pharma plants by 30 to 40 percent, which can drastically elevate equipment effectiveness. Furthermore, digitisation enables machine-to-machine learning systems that allow for predictive maintenance and increased efficiency through automatic correction actions.

 

Increased efficiency for production and productivity gains. 

According to McKinsey, digital advancements have created “opportunities for change” in pharmaceutical laboratories. Digitally enabled labs use:

“Advanced real-time data analytics and ongoing process verification to track trends, prevent deviations or out-of-specifications, and optimize scheduling”.

Moreover, they improve productivity by eliminating 80 percent of manual operational work and automate manual and schedule which optimizes the use of equipment, personnel and materials.

The transition to digitally powered labs is vital for pharma given that laboratory efficiency depends heavily on the elimination of human error, which is known as the biggest weakness in pharma. Statistically, even humans working in a top laboratory are only 92 percent accurate. This eight percent margin of error can result in severely hinder laboratory productivity and can destroy the credibility of the research. Digitisation offers laboratory more efficient methods, for instance, digital methods allow researchers to remotely manage every device in the laboratory, The experimental output can then be streamed into a digital format, which not only reduces the chance of human error but also saves researchers significant effort, time and money.

 

Digitisation accelerates various processes in the pharma industry

Digitisation works as a growth accelerator for various aspects of the pharmaceutical industry: helping companies meet consumer’s needs, optimising product development and making business operations more efficient. Digital disruption has paved the way for new opportunities in the pharmaceutical field and benefits the long-term sustainability and success of the industry.

 

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