The pharmaceutical industry’s efficiency woes have been put under a spotlight as consumer prices for prescription drugs continue to sky rocket. While academics, politicians, media and industry professionals debate various health care reforms, a significant opportunity, not in policymaking, for improvement remains largely untapped—its supply chain.
The pharmaceutical supply chain is one of the most complex in the world. For decades, it has also been traditionally resistant to technological change. While digitization has taken over nearly every imaginable process in other businesses, such as the automotive industry, it has yet to bring the pharma supply chain to its full potential.
Imagine the ability to analyze performance throughout every step of the testing, manufacturing and distribution process, or to forecast and respond to demand in real time. While these abilities previously have seemed impossible, they now are within reach as cloud and big data technologies advance.
Supply chains across all sectors struggle to effectively manage inventory, but when one zeros in on the pharma industry, its challenges are even more pronounced. McKinsey estimates that the pharmaceutical industry could recover $25 billion through inventory reduction alone.
Additionally, lengthy cycle times exacerbate the inventory problem.
Fifteen years ago, companies had few, if any, resources at their disposal to slash excess inventory or shrink cycle times. They had zero insight into global inventory, information that’s traditionally spread across—and stuck beneath—countless legacy IT platforms. With recent advancements in data analytics software, centralized visibility into such an information-intensive process as prescription drug production, pharmaceutical manufacturers can more quickly identify levels across suppliers, track external market changes, and make fast, informed decisions that optimize impact on inventory. These decisions can then be shared immediately with suppliers, contract manufacturers, other partners, and even regulators to ensure alignment.
When information is visible across a network, all entities are better positioned to avoid overages (as well as shortages) within their own supply. In turn, they each are better equipped to reduce cycle time for the greater whole and optimize inventory for the end product.
To learn more about the affects technology could have on the pharmaceutical supply chain, read the original article here.
