May 17, 2020

Origin: The pharma supply chain of the future

Supply Chain
Rich Quelch, Global Head of Ma...
5 min
Rich Quelch, Global Head of Marketing at Origin, shares his insight into the global trends facing the pharmaceutical industry and how today's market can meet tomorrow's challenges.
Rich Quelch, Global Head of Marketing at Origin, shares his insight into the global trends facing the pharmaceutical industry and how today's market can...

Rich Quelch, Global Head of Marketing at Origin, shares his insight into the global trends facing the pharmaceutical industry and how today's market can meet tomorrow's challenges.

In an industry that evolves every day, having first mover advantage is a must for any pharmaceutical manufacturer looking to compete. Knowledge, infrastructure and foresight are key to remain efficient and agile as the industry faces numerous forces which are reshaping and dictating the direction of the market.

However, for too long, many in the pharmaceutical industry have relied on supply chain networks which are neither flexible or cost-effective. A radical overhaul of pharma supply chains is long overdue and if left in their current state, we risk slowing the delivery of innovative new products and increasing poor health outcomes.

So, where and why are pharma supply chains falling short and how can stakeholders work together to increase efficiency in the design, manufacture and distribution of pharmaceuticals and medical devices?

The trends shaping tomorrow’s market

Globally, the pharmaceutical industry is being faced with numerous stress-factors which are, in most cases, becoming more intense. To overcome the roadblocks today, it’s important to look at the key trends shaping tomorrow’s market and consider their collective impact.

One major driver of change is that product lifecycles are becoming shorter with the rise of biological and genomic medicine. As a result, the market is evolving away from traditional small molecule and solid dose products towards larger bio-engineered, complex and technical products. This is placing increasing pressure on supply chains to deliver sensitive medicines within tighter timeframes.

Pharma is also becoming an increasingly global market as demand grows from developing regions and BRIC economies (Brazil, Russia, India and China). Within these countries, governments are increasingly committed to improving healthcare access and outcomes, incomes are growing, and so-called “lifestyle” diseases such as certain types of cancer and Type 2 diabetes are becoming more prevalent, significantly widening the customer base for pharma products.

To fully unlock the potential of emerging countries, pharmaceutical manufacturers need to invest in and implement truly global manufacturing and distribution networks.

The industry is also under increasing pressure to remove falsified medicines from circulation, slow the rate of antimicrobial resistance which is a grave risk to global public health, and protect children from accidental ingestion of medicines while making advances in senior-friendly packaging in response to ageing populations. Not to mention, the industry is also facing stricter environmental controls as part of the international drive to reduce carbon emissions.

Combined, these forces represent a huge challenge for modern pharma. As the frontier of drug innovation evolves, so must manufacturing and distribution systems. Linking the laboratory to the marketplace, the supply chain deserves the same focus and investment given to the discovery, development and marketing of products.

Supply chain consolidation

Historically, big pharma has relied on a network of hundreds of suppliers to manufacture, package and deliver different products to market. As a strategy, this is complicated, inefficient and expensive.

To facilitate the new pharmaceutical landscape, a fresh and agile approach is needed, one which leans towards an all-in-one solution which isn’t restricted to one manufacturing location or field of expertise.

Teams on the ground need to be capable of creating any solution, to any problem, at any time, anywhere to increase productivity and profitably. However, at the moment, it’s common for multiple teams to be managing multiple international supplier sites.

Consolidating the supply chain “under one roof” brings a large range of benefits including, but not limited to: reduced risks and overheads, greater innovation, assurance of supply and compliance, tighter quality control and local availability via regional distribution sites on a global scale.

These cost-saving and efficiency gains will simultaneously help the industry fulfil its social responsibilities, including the need to both pioneer more sustainable manufacturing processes and produce more effective and safer medicines the entire world can afford.


Becoming smarter with data

As pharma supply chains become increasingly digitised, larger amounts of big data are being generated. However, most companies still lack a structured process to capture, evaluate and act on the big data opportunities in their supply chains, held back by legacy IT systems, skillsets and a lack of integration.

When end-to-end visibility is the goal, fragmentation is the enemy. It’s not an overstatement to say data holds the key to creating efficient, compliant and demand-driven pharma supply chains, ultimately increasing profitability across the sector and improving health outcomes.

So, how can pharma establish reliable information management systems with robust security and privacy measures in place?

Pharma 4.0 demands the gap between the digital and physical is closed, allowing for a 365-degree view of business operations. In a global supply chain, this can be difficult to achieve.

A major trend in global pharma is shifting operations from enterprise resource planning software to the cloud, allowing for any organisations in the supply chain to connect to a shared system regardless of their own IT infrastructure; a virtual supply chain if you will, making it easier (and cheaper) to achieve faster collaborations.

Intelligent cloud software is also more secure, using machine learning to provide risk-based conditional access based on the user, location (geo-location or IP address), device and application with a single sign-on, avoiding any unnecessary disruption.

Platforms also offer real-time threat detection, using advanced analytics to scour global intelligence and provide the necessary high-speed responses when needed. In a constantly evolving threat landscape, this is something an over-burdened IT team simply wouldn’t have the resources to do alone.

Big data can also give pharma companies a more granular, real-time picture of events taking place along the supply chain, from manufacture to the shop or pharmacy floor. Advanced tracking systems, built into primary and secondary packaging, is an exciting area of innovation. By managing and recording all the typical activities that occur in the supply chain or designed to cover special requirements, tracking chips can log events or raise queries that occur across a products lifespan remotely.

This is invaluable information for anti-tampering strategies, allowing companies to locate and interrogate a product anywhere in the supply chain. For example, the geographical location of a product and the route it took to arrive there can all be captured and stored, thus revealing any unauthorised journey routes or interventions. Collected data can also highlight inefficiencies and bottlenecks which can be addressed to streamline processes and drive cost-savings.

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Jun 9, 2021

Upgrading RFID and Automated Track and Trace Solutions

Elise Leise
5 min
Why do decades-old tech like RFID remain relevant despite digital disruption - and which recent innovations can accelerate traceability and SCM?

During the COVID-19 pandemic, global supply chains faced the challenge of rapidly adjusting their business priorities to new customer preferences. Local supplier backlogs, winter storms, and the Suez Canal backup in March underscored the need for efficiency and visibility across the supply chain. 

According to Christof Backhaus, Digital Lead Product Supply and Smart Label Project Lead at Bayer, companies must now place critical importance on tracking and tracing their products. “All large enterprises in the world dealing with finished goods,” he said, “seek functional and technical solutions to real-time channel inventory.” 

Indeed, RFID’s real-time tracking data allows executives to make quick, well-informed decisions in moments of supply chain crisis - and rather than unfolding across days or weeks, it only takes a matter of minutes. 

Why does RFID remain relevant despite digital disruption? 


Essentially, RFID uses radio frequency waves to transfer data wirelessly between a scanner and a tag. In contrast to barcode technology, which requires a stationary scanner, RFID tags can be pinged from anywhere in the world, allowing companies to track real-time movement through the supply chain. RFID tags can also scan unique SKU numbers and distinguish between varying product sizes, colours, and styles: a critical feature for increasingly personalised end-user products. 


Though the first patent for RFID tags appeared in 1973, higher accuracy rates, lower costs, and advances in sensor and data technology have made it newly accessible to a wide range of companies. Today, the technology is used in logistics networks, manufacturing and delivery networks in the pharmaceutical industry, and any business where efficiently tracking and monitoring product location is critical: raw materials, consumer products, cars, electronics, retail, and agriculture. 

What are the key benefits? 


Overall, automated track and trace solutions keep labour costs low, optimise operating costs, mitigate security risks, use capital effectively, and assist companies in adhering to regulatory requirements. 

Below are three in-depth dives into how RFID benefits major industries: 


  • Pharmaceuticals: RFID tags help manufacturers safeguard sensitive products such as vaccines, tracking where they are and when they will arrive in real-time. Sensors closely monitor temperatures to ensure regulatory compliance. If anyone tampers with a shipment, the sensors alert the company. 
  • Logistics: RFID identifies process gaps and frequent anomalies by monitoring a product’s lifecycle from shipment to delivery. This data helps decision-makers predict the most efficient routes and therefore optimise their distribution schedules. 
  • Retail: Sensors help guard shipments against theft and provide critical intelligence when shipments go missing. Before adopting RFID technology in 2203, UK retailer Marks and Spencer relied on barcodes to scan inventory. When they made the switch, their productivity increased from a maximum of 400-600 items scanned per hour to up to 15,000 items scanned per hour. Building on their initial success, the retailer expanded the use of the technology and is still using it today. 

Regardless of the industry, RFID promotes accuracy, immediacy, and efficiency. Companies reduce human error by automatically scanning products, keep track of inventory even in geographic locations with poor connectivity, and help streamline warehouse operations by identifying exact product locations. 

Which recent innovations have changed the game? 


With recent developments in cloud technology and IoT, a multitude of cloud-based alternatives have emerged to challenge traditional RFID technology. One of these cutting-edge solutions is Sony’s Smart Label - an intelligent shipping label that runs on AT&T’s global cellular network. 

As with any good innovation, Sony’s proprietary technology started with a customer need ready to be solved: the Bayer Crop Science Division lacked an international IoT solution that could track seed products from start to finish throughout its distribution channel. Millions of dollars of revenue stood at stake, so Bayer turned to Sony to develop a smart label that would set the organisation up to manage its supply chain with end-to-end visibility. 

Sony’s printable and disposable adhesive label allows companies to track the condition and location of their products worldwide and act upon the vast amounts of data it collects. The process is simple: the label activates when attached to the package, connects to AT&T’s secure LTE-M network, and sends data to the Smart Label Cloud in real time. 

In sharp contrast to other smart label solutions that place trust in a patchwork combination of Wi-Fi, radio-frequency identification, and other limited coverage connections, the Sony Smart Label connects solely through a secure and universally-available cellular network. “Working with Sony,” says Robert Boyanovsky, the vice president of Mobility, IoT and 5G at AT&T, “we provide full visibility of every item shipped.” 

Most importantly for companies on the edge, the Smart Label integrates with existing enterprise systems to achieve full visibility, thus adding value without disrupting supply chain process flow. 

Why is this important now? 


Companies that previously delayed introducing RFID and other automated track-and-trace technologies can capitalise on recent developments that lower costs, improve accuracy, and supercharge traceability. 

Clearly the technology has value in today’s uncertain global marketplace, and can help decrease the costs of tracking goods. To quote Christof Backhaus, the Project Lead at Bayer, “the Smart Label indicates how much product is in the market, from the packaging line to the end customer.” Companies no longer have to spend a small fortune to take advantage of recent IoT developments. “Due to the technical composition [of the label],” Backhaus explains, “we don’t require additional infrastructure, manual scanning, or other expensive tools.” 

Over the decades since RFID was first introduced, support for introducing it to company supply chains has also improved. AT&T’s IoT Professional Services Organisation, for example, supports companies through the end-to-end design and integration process--from installation to deployment and project management. 

Companies that invest in traceable and visible supply chain solutions stand the best chance of survival, adjusting in real-time to natural disasters, shipping backups, and slowed-down supplier turnarounds as a result of the global pandemic. “Smart Label promises to help businesses like Bayer realise the full potential of the IoT,” says AT&T’s Boyanovsky. “[We can] deliver improvements in revenue and cost savings and make supply chains more efficient.” 

Certainly, company executives will be hard-pressed to ignore recent innovations. In an age of uncertainty, RFID and its challengers herald a welcome sense of supply chain security. The next step? “Our sales team,” Boyanovsky adds, “is prepared to engage with prospective customers now.” 


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