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Pharma Companies Must Move to Digitally Connected Supply Chain Ecosystems

Pharmaceutical supply chains require drug manufacturers to interact with large numbers of suppliers. Operations are typically spread across multiple production, manufacturing, sterilization and distribution locations, creating significant visibility and tracking challenges. Further complexity arises from the need to closely monitor controlled substances and active ingredients.

If technology-enabled visibility isn’t built into the pharma supply chain today, then manufacturers, distributors, wholesalers, shippers and pharmacies risk significant losses.

Most companies are focused on optimizing business processes inside the warehouse. While warehouse management software systems have continued to evolve, the basic functionality of a WMS is still to control storage and movements within the four walls of the warehouse. Yet it’s equally important to look across the wider supply network, including customers and vendors, to enable signals that can manage operations more efficiently and on a real-time basis.

At a time when mobile devices are ubiquitous, and data is available across global networks, it makes sense for all parties to share key critical information, including point-of-sale, order and shipment data; forecasts with suppliers; production schedules between vendors and customers; advance shipping notice from customers and vendors, and critical events.

Currently, most pharmaceutical companies and their partners in a supply-chain ecosystem operate across centralized enterprise resource planning (ERP) or legacy systems, connecting through electronic data interchange (EDI) or even spreadsheets sent via email. The result is a highly inefficient operating environment. Ideally, participants in the extended supply-chain ecosystem should be connecting in real time, with complete trust in the data being exchanged.

Here are some questions that pharma companies need to be asking themselves:

How ready are our warehouses for digitization? How far along are we with the use of barcode labeling and scanning? This can range from running a manual operation based on paper-based processes and phone calls, to barcodes and scanners that track changes in chain of custody while third-party partners have goods in transit.

How far along are we in the use of radio frequency identification (RFID)? Again, this can range from no usage to the full deployment of RFID to track the movement of goods, material-handling equipment and workers.

How far along are we in the usage of mobile devices? This can run from limited usage with manual calls, emails and texts to systems that monitor current workflows and anticipate future needs.

To what extent do we have real-time inventory visibility? The absence of such capability leads to the need for frequent manual inventory checks, using paper-based systems. Warehouses today need complete visibility of inventory on hand in all selling channels, as well as with vendors or suppliers, at distribution centers and in transit.

To what extent do we collaborate with supply-chain partners, and require them to use technology for ordering and receiving? Reliance on paper-based systems and visual checks on order quantities leads to inaccurate orders and receipts. Business partners must manage a fully automated inventory replenishment system, and require mobile integrated advanced shipping notices.

How automated are our operational workflows? This can range from manual operations to systems that capture critical data in real time. The latter allows companies to make critical business decisions and enable optimal performance.

It’s becoming increasingly important for organizations to evaluate their fulfillment operations, to determine how ready they are to interact digitally with the extended supply-chain ecosystem.

TK Subramanian is director of supply chain transformation services with Tata Consultancy Services.

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