Pharmaceutical Track and Trace: Sharing the Right Data for a Competent Supply Chain Management

Pharmaceutical Track and Trace: Sharing the Right Data for a Competent Supply Chain Management

Data-sharing is crucial for any supply chain activity. But for drug manufacturing and the pharmaceutical sector it has to be top notch because the process is multi-layered and complicated. Considering the DSCSA guidance with the aim to combat circulation of counterfeit medicines, information-sharing in this particular sector should not just be streamlined but also be fast and secured. While error-free serialization is a pre-requisite for pharmaceutical track and trace under DSCSA compliance norms, information in the form of data encryption is a mandate to increase the efficiency and security of the pharmaceutical supply chain.

It must be remembered that while pharma manufacturers are struggling to meet DSCSA compliance, they are also striving for a profit, which fails to make any sense if data is lost or misplaced. It must also be considered that the competition is no longer restricted between companies, but in between supply chains. Data-sharing the right way not only increases your probability to stay ahead of your competitors with reduced inventories and smooth production, but also helps in reducing the friction within the supply chain, eliminating probabilities of error or drug duplication, ultimately leading to a high customer satisfaction.

But, before we jump into the right ways to share information, let’s dig deeper into the necessities to do so and the challenges drug supply chains are facing in this aspect.

Why is sharing data necessary?

Data-sharing in the pharma context relates to the extent to which information can be shared between the levels of a supply chain. Clearly speaking, shared information can be transparent or oblique, depending on whom it is being shared with. Data can be used for tactical purposes, for instance in purchasing, operation scheduling or logistical purposes; or for strategic purposes, which include long-term corporate objectives, customer service or for marketing.

Research by experts have shown that effective information sharing can enhance the visibility of trading partners and the underlying uncertainty that governs any supply chain operation. An effective communication can also work collaboratively to remove the inefficiencies of a supply-chain, thus impacting the relationship between the buyer and the supplier in a positive manner.

The pharma industry is agile and so a supply chain has to adopt measures to ensure that they keep up with the demand and the supply variations. The market is rapidly shrinking product lifecycles which needs a firm judgement on the part of each of the levels to ensure that the demand for drugs is met (as per the DSCSA guidance) and is always replenished to ensure that there are no shortages. This step would be impossible without the help of adept information-sharing. And because of the very lack of transparency, the pharma industry is forced to face challenges.

Bottlenecks:

Psychological barrier or competitive apprehension: These are some of the key concerns that supply chain levels face. Facts that giving away too much could ruin the brand integrity and too little could stall supply chain performance are often realized, but rarely addressed. While expert analysis is a must, it would be inconclusive without the help of technology.

Technology integration: Technologies empowering supply chain stake-holders with rapid data interchange help in collaborative planning, replenishment workflows and forecasting. In fact, these DSCSA software form a barrier to data leakage, creating an interoperable and secured base, which acts as a reference point for all the levels of the supply chain. Easy to integrate to any dynamic environment, these software can be merged over and above the existing assets, making data-sharing 40% faster, reliable and secured. These technologies can also manage the inventory workflow with ease, reducing wastage by notches.

Lack of real-time data: The performance of an SCM gets better with the availability of real-time data from each section of the drug supply chain. But owing to the psychological barrier (as already discussed), developing a feasible plan at the manufacturing level comes to a grinding halt. Unavailability of detailed and accurate plant information complicates the supply management at all the levels because stakeholders do not get a clear picture.

Manual error: A simple challenge that can crash the entire system down. Imagine a scenario where a human has to endure number crunching at a great scale on a daily basis. Errors are bound to happen. And one small mistake can turn the tables for the entire pharmaceutical supply chain system. While it seems to be a more lucrative option for entities less familiar with the benefits of technology here, it is a sure shot way to failure at one point or the other, which inadvertently influences pricing and the cost of production.

The bull whip effect: A major cause of uncertainty among manufacturers, this effect is not just crippling but also unprofitable. Quite similar to the ripple effects of a long whip, the manufacturers who are the farthest from the customers bear the brunt of overstocked warehouses.  All the segments of a supply chain try to defend their own inventory point to meet an increased customer demand. So, in between the customer and the manufacturer, there exists close to 7 inventory points, altogether stocking 6-month worth of buffer inventory. Imagine if there was a sharp decline in the demand of the drug, these stocks will find their way to the landfill, billing the manufacturer thousands of dollars, not to mention the carbon footprint that it will leave behind.

The Solutions:

Supply chain partners require maintaining competitive inter-organizational systems for quick response to customer’s changing demands.

DSCSA-guided software that enable multi scanning, vision scanning or rapid screening need to be integrated at every stage of the supply chain. For successful integration, the capacity of the firm, the complexity of the product and the corporate culture must be considered to gauge scopes of customization.  Integration should be done on the basis of how much information should be shared, whom it should be shared with and why it should be shared.

A 4 to 5-stage pharma supply chain comprising customers, retailers, distributors, wholesalers and manufacturers should have increasing degree of data-sharing to reduce the inventory levels at the wholesaler stage. This is particularly useful when the demand is highly variable, for example in the case of prescription drugs. Of course, variations must not be ignored when it comes to data-sharing for other supply chain settings in the pharma industry.

Implementing operational data hub (ODH) is another way to increase efficiency. This helps in breaking down data silos, providing the much-needed visibility between cyber-physical systems. An ODH enables efficient data analysis across supply chain operations because data-sharing through the platform can lead to efficient, comprehensive batch tracking and genealogy. ODHs bring together data from all the segments of the supply chain, but allowing access to only the necessary data for a particular segment. This provides pharmas a better oversight of processes and inventory, reducing functional inefficiencies and scrap. ODH platforms also make end-to-end visibility possible, making the pharma supply chain a transparent process, eliminating all possibilities of counterfeit or duplicate drugs.

Clearly, the benefits of data-sharing can be summarized as follows:

• With adept information sharing at the inventory levels, forecasting data, sales trend can reduce the cycle time
• Data sharing can fulfil orders more quickly without fewer bottlenecks
• Cut down on excess inventory, saving millions
• Improve forecast accuracy and enhancing the customer experience
• Improved delivery reliability, shorter delivery time, and greater service quality

Measures taken toward effective data-sharing all lead to reduced cost, which is an important aspect of business. Revenues generated by supply chains are governed by a simple calculation: The money derived from customers minus the cost of supply chain process. So, lesser the cost of producing a drug, more the profit margin. Rough estimates show that data sharing can reduce 40-50% of the loss disposed by price, reduced inventories by 10-15% and can save cost upto 20%.

We will go farther in our next chapter discussing the elements that data exchange should have, which can then be used for creating unique serial IDs on drug packages.