Digital Catch Up

Alf Goebel looks at what the pharmaceutical sector needs to do to ensure it is fit for digital purpose and takes its place at the top of the digital maturity rankings rather than hiding away at the bottom.

6 min read

For a sector that is generally advanced in its application of technology to ensure it sits efficiently at the centre of a smooth supply chain and can produce global levels of medication in a cost-efficient manner, the pharmaceutical industry is surprisingly poor when it comes to overall digital maturity in its day-to-day operations.

As PwC’s consulting group Strategy& points out, the pharma industry has – up until now – been cautious in applying digital technology to improve manufacturing and supply chain operations. However, that caution is now becoming a hindrance. The sector faces growing challenges – including globalisation, great supply chain complexity, price and cost pressure, and the advent of personalised medicine. Digitalisation will be at the centre of helping companies meet these new developments.

However, are pharma companies flexing enough digital muscle to cope with these changes? A recent study by McKinsey sees the pharma sector languishing far below industries including travel and tourism, banking, retail and telecommunications. When it comes to points out of 100 for digital maturity, pharma can only manage a humble 27, coming in behind travel and hospitality on 49 points, retail on 42 and banking on 32.

As you might imagine, it is the digital sector itself that is leading the pack, with an average score of between 70 and 80. This is not surprising – after all, if technology-based companies are not showing the rest of us how it is done when it comes to digital maturity, there must be something wrong!

Using digitisation to be prepared

One of the overriding reasons for the global vulnerability seen over the past 18 months is a basic one. Most industries, governments and countries were simply not prepared for such a devastating pandemic that appeared seemingly out of nowhere. The world was placed into lockdown to prevent the virus spreading, but this led to major logistical issues. Problems with sourcing the quality and quantity of supplies needed, and ongoing problems with getting them distributed across the globe, are still being experienced now.

While we might not be able to prevent another virus if one flares up in the future, continued digital investment will sit at the centre of our sector’s ability to mobilise itself quickly, efficiently and effectively. We have seen significant progress made since the start of the pandemic, but this should only be seen as the start of an especially important, complex journey that needs to continue, especially with Industry 4.0 on the horizon.

The recent, COVID-driven, digital journey

The advent of the COVID pandemic has ensured the pharma industry has collectively re-evaluated the technology it needs, versus the systems that were in place.The machinery driving the actual serialisation processes was, as would be expected, of the latest generation and latest specifications.

However, in line with almost every other business sector across the globe, pharmaceutical track and trace companies have also had to invest in systems that are conducive to complementing what is likely to become the new working norm.

With agile supply chains and complex data exchanges now reliant on the latest technology, the sector has seen a quiet, behind-the-scenes digital revolution recently, one which will stand it in strong stead for the future. However, this must be seen purely as a scene-setter, something to whet the overall appetite for a much-improved collective digital push, especially as we collectively work to implement the new ‘fourth industrial revolution’, or Industry 4.0 manufacturing concepts.

Digitisation will sit at the very heart of Industry 4.0. It will connect everything, creating new levels of transparency and adaptivity for a digitalised plant floor, incorporating cyber-physical systems, Internet of Things, cloud computing, cognitive computing and artificial intelligence.

The continued repatriation of supply chains

Digital systems will sit behind a continued change in how supply- chains are structured. One of the major issues highlighted by the pandemic was the fact the globe had become overly reliant on just one geography – namely China – for the supply of medication and medical equipment. Not only did this cause a damaging bottleneck, placing an inordinate amount of stress on the rigid supply chains connected with Chinese production, it placed an unrealistic demand on resources. While China is, of course, a major global pharmaceutical producer, even it was finding it tough supply the rest of the planet through its established, rigid supply chain.

Fast-forward to today and while there is a still an overwhelming reliance on geographies such as China for the supply of much of the globe’s medication, the COVID pandemic has seen this pattern starting to shift, a pattern that is being driven by the latest technology and systems.

We are now seeing a move towards local production and sourcing through the repatriation of supply chains into Europe and the US. This repatriation is a big deal for the future of the pharmaceutical sector. It signals confidence in the capabilities of Europe, resulting in ongoing investment into the continent.

This will result in job creation and a renewed interest in the brand name of Europe as a global centre to produce essential pharmaceuticals.

This will be of major importance should the globe need to spring into action again in the face of another pandemic. An agile supply chain, local sourcing, local production and various centres of production will mean we are in a much better state than we were just 18 months ago.

Continued track and trace cooperation

The advent of the virus has highlighted the importance for product track and trace to work together, resulting in a supply chain which will minimise costs for pharmaceutical companies and lead towards a new standard of openness and cooperation.

Indeed, we are already seeing the implementation of agile supply chain regulation which will require a strong industry-standard open interface and interoperability. To do this, the hardware and the software among different vendors needs to be much more aligned and should work much closer together, resulting in much more open and cooperative serialisation processes. Machines need to speak to each other in a common language, regardless of the manufacturer.

The importance of this cannot be overstated. To be able to track every single item, at every single stage of the process from source to supply to consumer, is essential.This will be particularly important for the everyday production of personalised medication. It will give all concerned – from the producer through to the end consumer – the confidence their individual needs are being met and will enable complex prescriptions to be produced as a matter of routine.

Conclusion: the need for digital investment

It is quite feasible that another pandemic could rise again – or even that the current one could re-present itself in another more dangerous format. We might not want to think about such things right now, but it remains a possibility.

It essential to ensure our systems are fit for purpose. The complex regulation for the pharma sector should not be used as an excuse to be so slow on innovation and digitalisation. Indeed, recent developments should be used as a springboard to kick-start an innovation investment cycle in order to use technology as a strategic weapon.

Blockchain for data exchange, cybersecurity programs to protect shopfloor hardware items, Business Intelligence for ‘Big Data’, open system architecture to support agile supply chains and open plug and play integration to have seamless application integration are just some of the initiatives. In practice, there will be many more developments which will sit behind Industry 4.0. which will help to position the pharmaceutical sector in its rightful place as an innovation leader.

View the original article here.

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