The Supply Chain of the Future A LogiPharma Report
logipharmaeu.wbresearch.com The Supply Chain of the Future 01 A LogiPharma Report
“ LogiPharma is without doubt the number one industry supply chain conference in Europe. The combination of high-quality presentations and opportunities to network with peers from
other companies makes it unique. “
Arie Moruanx, Global Surgery Planning Excellence Director
Contents
Introduction 02 Getting ahead of the game in supply chain 03 United Cargo 04 OM Movianto 05 Part 1: Challenges and Opportunities 06 Part 2: Investments and Actions 12 Part 3: Supply Chain Visibility 18 About E2open 22 About OM Movianto 22 About United Cargo TempControl 22 About WBR Digital 22 The Supply Chain of the Future A LogiPharma Report 02 Introduction
Now, perhaps more than ever, Supply Chain is at the very heart of success for the world’s most important pharmaceutical companies.
As a result the hunt is on for innovative ways to transform the supply chain to enable on-time delivery in the most cost-efficient manner possible. Although this may seem a modest proposal, it presents significant challenges.
From rapid shifts in supply and demand, to impending regulatory changes, disruptive technologies and, of course, the need to maintain supply chain integrity, there are plenty of stress-factors to be aware of – and solutions to be found.
In advance of the LogiPharma 2017 conference, we wanted to investigate some of the issues which are driving transformation in the pharmaceutical supply chain today.
We approached 100 senior decision makers in the industry, with job titles like Vice President of Supply Chain Management, Global Head of Supply Chain, Director of SCM & Procurement, as well as others of a similar standing to compile this research report.
The results of our research have been aggregated, anonymised and are presented here to give you an insight into how your peers are responding to these challenges.
Additional contributors
Patrick Lemoine Mark James Mary Tussing Vice President Vice President Manager Product Marketing OM Movianto Global Business E2open Europe Development United TempControl The Supply Chain of the Future 03 A LogiPharma Report
Getting ahead of the game in supply chain
Patrick Lemoine, VP Product Marketing, E2open
The pharmaceutical industry recognizing that this new setup When companies deploy such has been one of the best- requires advanced solutions. approaches, the benefits are performing industries of the past substantial: decades with pharma companies Leading pharma companies are, excelling at many disciplines to a large extent, leveraging the l Up-to-date, supply chain – research and development, experience of other industries visibility – “one version of the manufacturing, sales and while taking into account the truth” shared across all marketing – while maintaining specifics of the pharma industry. partners of the extended the highest safety and quality The new approach is to run such supply chain standards. Today the pharma a multi-enterprise supply chain l Full quality control of CMOs industry is going through major through a supply chain operating changes: the rise of generics network such as that provided l as required for traceability and the resulting competitive by E2open. The foundation is a and serialization intensity, an ever-growing business network that connects product portfolio, demanding all partners in real-time for l Higher on-shelf availability, customers and retailers, and true end-to-end visibility and generally with lower inventories new regulatory requirements. collaboration. Such a network also allows companies to have l Through smarter channel The supply chain function has a deep visibility into the operations allocations, better margins key role to play to help address of their contract manufacturers and also ultimately higher the new challenges. In particular, to capture quality as well as batch market share increasingly global and information – so companies can outsourced supply chains bring trace quality issues even if they The early adopters in the pharma additional complexity and many outsource production. Once this industry are already capturing pharma companies struggle platform is in place, dedicated these benefits, putting themselves to run increasingly “virtual” supply chain solutions provide the ahead of their peers. supply chains. Today’s virtual required insights and decision- supply chains require a much support to supply chain teams. higher degree of coordination and alignment across all supply A key area that has emerged chain partners and activities. is the importance of better Achieving better supply chain managing the downstream part visibility and collaboration across of the supply chain, where new the entire supply chain is not technologies like demand sensing something ERP systems or – first adopted by consumer goods traditional business applications companies – can dramatically can solve because they only focus help pharmaceutical companies on what’s happening inside a increase their on-shelf availability, company’s four walls. As a result, in hospitals or at retail locations. pharmaceutical companies are 26954_Ad_LogiPharma_TC_v2b.indd 1 SM ©2017 United Airlines, Inc. All rights reserved. right temp right right time, safeguardyour pharmaceuticalvaluable TempControl’s specialized processes shipments from start to finish. friendly unitedcargo.com 2/2/17 10:55 AM
The Supply Chain of the Future 05 A LogiPharma Report
Healthcare Dedicated Solutions
Over recent years there has for the pharmaceutical industry OM Movianto’s international been significant polarization and has the capability to clients benefit from a pan- of pharmaceutical products handle the most demanding European network, a broad range requiring increasingly complex of specialised product order of healthcare logistics services, and flexible supply chain management, storage, handling the know-how of the local solutions. From basic regulatory and distribution requirements. markets and uncompromising compliance and temperature quality standards like ISO 9001 control through to special OM Movianto is part of US-based and ISO 13485. The company has handling, monitoring and security O&M Inc., headquartered in expanded rapidly over the last few arrangements for sensitive and Richmond, Virginia. With a diverse years. More than 1,900 teammates specialised products together product and service offering, are managing over 275,000 pallet with diverse final mile distribution O&M Inc. serves hospitals, locations spread over a network of requirements, the pharmaceutical integrated healthcare systems, 20 wholly owned warehouses in 11 industry faces increasing supply group purchasing organisations, European countries. chain challenges. healthcare supplies and the federal government. Today OM Movianto operates As a healthcare dedicated in three regions in Europe solution provider OM Movianto OM Movianto is dedicated to being with capabilities in: West offers strategic supply chain the preferred European healthcare (United Kingdom and Eire), management to overcome these solutions partner with best-in-class North (Belgium, Netherlands, hurdles with best- in-class quality for the pharmaceutical, Germany, Switzerland, Denmark, logistic solutions, adhering biotech, medical device and Nordics, Poland, Czech Republic to highest quality standards, diagnostic industries. We offer and Slovakia), and South in excess of basic GDP and outsourcing services along the (France, Spain). GMP regulation, designed to supply chain such as warehousing, maintain the brand promise transportation, active temperature of the manufacturer to their control logistics as well as Value customer or patient. OM Added Services; order to cash Movianto continues to position and sourcing. itself as an essential partner Part One: Challenges and Opportunities The Supply Chain of the Future 07 A LogiPharma Report
Supply Chain eyes Asia Pac for market access capability
Which region do you think provides supply chain with the greatest opportunity to influence the market access capability of your company?
16% Latin/South America % % 15 16 Rest of Asia Russia & CIS
18% Eastern Europe % % 25 3 Asia Pacific Middle East & North Africa 7% Africa The Supply Chain of the Future A LogiPharma Report 08
Increasing forecast accuracy is a “ major challenge Mastering the
What are the biggest challenges you face today? distribution side of the business remains Innovating the distribution channel strategy to remain a top priority for competitive 23% 20% 30% 21% 6% pharma companies, reflecting the focus Increasing forecast accuracy of achieving high 23% 39% 31% 6% 1% product availability at a reasonable cost. Increasing performance of new product introductions Also related is the 20% 21% 40% 17% 2% importance of improving the forecast Managing the supply chain following a merger or acquisition accuracy, a key driver
18% 39% 27% 13% 3% in increasing service Balancing cost management levels. “ versus providing excellent customer service Patrick Lemoine Vice President, Product Marketing, E2open 12% 26% 41% 17% 4%
Improving quality and trace- ability across your entire network 12% 43% 29% 11% 5%
Managing the supply chain for a rapidly changing portfolio 10% 28% 44% 17% 1%
1 2 3 4 5 The Supply Chain of the Future 09 A LogiPharma Report
“ More than 50% have launched direct- Direct to patient to-patient distribution channels, or distribution channels are set to launch them in the next year have the probability of How far along is your company in implementing direct-to- increasing complexity patient distribution channels? in the supply chain 32% and therefore also We will be implementing it in increasing costs. the next 1-3 years Working with healthcare specialist 5% logistics experts We are actively discussing it but there are no plans to can improve the implement just yet understanding of the trade-offs between 26% Fully operational – we have different models been distributing by direct- to-patient channels for and options, and over a year can ensure your distribution channels deliver on your
37% objectives. “ Deployed – we started distribution in the last 12 months Mark James Vice President, OM Movianto Europe The Supply Chain of the Future A LogiPharma Report 10
Supply chains operating from “ the cloud Not surprisingly,
To what extent is your company driving change in the supply cloud computing chain using these technological innovations? in the supply chain function is already a Cloud Computing fact for the majority of 0% 1% 3% 39% 57% pharma companies. They are attracted by
Supply Chain Data Analytics the IT cost savings
0% 1% 22% 39% 38% but also highly value the rapid deployment and therefore faster Customer Data Analytics innovation that cloud
1% 2% 33% 41% 23% solutions enable. “
Patrick Lemoine Vice President, Product Marketing, E2open Digital Technology (e.g. mobile apps) 0% 22% 40% 30% 8%
No plans to implement
Maybe in future, but not now
We’re actively discussing it
We’re in the process of implementing it
It’s already working for us The Supply Chain of the Future 11 A LogiPharma Report
“ Supply Chain set to have a much Supply chain greater impact on the bottom line management Which one of the following changes is the most likely to occur continues to be seen in 10 years’ time? as a key driver of the bottom line – increasingly so. It is 30% Direct to hospital and pharmacy distribution a reflection of the will be significantly more common need for pharma companies to excel at 3% the operational side Supply chains will be
far more segmented
and specialized according of the business. “ to product
Patrick Lemoine Vice President, Product Marketing, E2open 25% Supply chain will have a much greater influence on market access
42% Supply chain will have a much more significant impact on the bottom line of the company Part Two: Investments and Actions The Supply Chain of the Future 13 A LogiPharma Report
“ Building better supply chains should Collaboration should be a collaborative activity not just be with other Do you think your company should collaborate with others to pharma companies. achieve a more effective supply chain? Specialist healthcare logistics providers 33% Possibly, but it depends on the situation can bring industry wide expertise and knowledge on to how to make your supply 3%
No – supply chain should
be used to differentiate chain more effective. “ from competitors
Mark James Vice President, OM Movianto Europe
64% Yes absolutely – it’s important to work with other pharma companies to develop a more effective supply chain The Supply Chain of the Future A LogiPharma Report 14
Streamlining the transportation service “ provider roster is a major priority The consensus
What do you think the number one investment priority for around the most meeting GDP guidelines should be? important investment priority for meeting GDP guidelines 15% Investing in active solutions remains fragmented, with the top spot 3% this year moving to Investing in passive solutions consolidating/finding
new transportation service providers. “ % 15 Patrick Lemoine Risk assessing and adapting Vice President, Product Marketing, E2open transportation routes
40% Consolidating or finding new transportation service providers
27% Reassessing and changing strategy for freight – sea vs. air. vs. truck vs. rail The Supply Chain of the Future 15 A LogiPharma Report
“ Digitalization is a major priority for There is a significant Supply Chain need and shift in the Is ‘digitalization’ a priority for you? market to quicker speed of business through mobile apps. 10% No – mobile apps & devices will not be used in supply chain – data analytics As a result of this, could be important though mobile apps are set to become an 14% important feature Yes very much so - the digital patient, wearables, smart for transportation packaging and the smart pill, mobile apps & devices and data analytics will be impacting pharma providers who seek supply chain imminently, if not
to better serve their right now customers. “
Mary Tussing Manager, Global Business Development, United TempControl 39% Yes – mobile apps & devices, data analytics are all extremely important to the supply chain
37% Yes, somewhat – data analytics and an information-enriched end-to-end supply chain is important The Supply Chain of the Future A LogiPharma Report 16
The IoT and Industry 4.0 expected to “ shake things up in the next 10 years Industry 4.0 and the
Which of these disruptive technologies will have the biggest Internet of Things are impact on supply chain over the next 5 years? technologies that have immediate 2.07 applications in the 3D Printing supply chain space and are therefore seen as key disrupting 2.92 technologies. It is Artificial Intelligence interesting to note that blockchain is also
2.99 seen as important,
Wearables, mobile apps for patients more than big data. “ & care professionals Patrick Lemoine Vice President, Product Marketing, E2open
4.19 Big Data
4.29 Blockchain Technology
4.54 Industry 4.0 and the Internet of Things The Supply Chain of the Future 17 A LogiPharma Report
“ Only a quarter are ready to comply With respect to with the EU’s Falsified Medicines the serialization Directive requirements, How prepared is your company for the global serialization companies have made requirements outlined in the EU Falsified Medicines Directive? significant progress 15% but only one out of Not very prepared, it would be good to find out how other companies are four is ready today. managing this One complication is how to get quality 26% and traceability data Very prepared – we have all of our processes and when part of the technologies in place manufacturing is outsourced. This is why companies have turned to E2open
to gain visibility into their CMO. “
Patrick Lemoine Vice President, Product Marketing, E2open 59% Somewhat prepared, but we are still developing our processes and technologies Part Three: Supply Chain Visibility The Supply Chain of the Future 19 A LogiPharma Report
“ Supply chain visibility is very good for Supply chain visibility half of respondents is no longer a vision, How would you rate your visibility across your entire it is a fact for a supply network? majority of pharma
% companies today. “ 14
Patrick Lemoine Vice President, Product Marketing, E2open Excellent
49%
Very Good
29%
Good
8%
Fair
0%
Poor The Supply Chain of the Future A LogiPharma Report 20
Visibility is broadly good, but is better “ downstream than up Downstream visibility
To what degree do you have visibility into the following tiers of to the DCs and all the your supply chain? way to the customers (Please indicate the degree from 0 = none to 4 = clear view) is the area in supply chain visibility that Raw material / API suppliers still somewhat
0% 3% 27% 48% 22% challenging. “
Patrick Lemoine Vice President, Product Marketing, E2open
CMOs / Packaging
0% 6% 18% 42% 34%
DCs
0% 8% 28% 36% 28%
Distributors/customers
0% 9% 30% 37% 24%
0 1 2 3 4 The Supply Chain of the Future 21 A LogiPharma Report
“ Being responsive to changes in global Transparency and demand is a major priority a willingness to What are your key priorities when implementing end-to-end collaborate with all supply chain visibility? stakeholders is an (Please rank each 1 - 5. #1 is the biggest challenge) absolutely essential Being more responsive to demand changes component of success. 30% 27% 26% 16% 1% We truly believe that through partnerships and Building better relationships with customers
open communications, 23% 21% 33% 17% 6% we all win. “ Being more responsive to Mary Tussing supply changes Manager, Global Business Development, United TempControl 17% 28% 39% 12% 4%
Improving quality and traceability 14% 29% 40% 14% 3%
Building better relationships with suppliers 12% 23% 40% 19% 6%
Better managing CMOs
10% 31% 34% 19% 6%
Enabling control tower-type capabilities 10% 39% 39% 10% 2%
1 2 3 4 5 The Supply Chain of the Future A LogiPharma Report 22
About: E2open Founded in 2000, E2open provides the largest and most comprehensive Supply Chain Operating Network, including a broad suite of collaborative supply chain solutions. Leading global enterprises, including pharma and biotech companies, rely on E2open to provide greater end-to-end visibility, more accurate data and insights, and real-time business process orchestration across complex, multi-enterprise trading partner networks.
For more information, visit: www.e2open.com.
About: OM Movianto As part of US-based Owens & Minor Inc., we are a healthcare dedicated pan-European network operating in over 15 European countries with a diverse product and service offering.
OUR Vision is to connect the world’s leading life-science companies to the point of care to enable better patient outcomes.
OUR Mission is to remain fully focused on delivering healthcare services and solutions. We seek to understand the volume and technical demands of our clients product portfolio to ensure we enable flexible and customised patient centric solutions, through a pan European platform that offers consistency, reliability and resilience of service underpinned by a total focus on our quality management systems. For more information, visit: www. movianto.com.
About: United Cargo TempControl TempControl is United Cargo’s premium service for pharmaceuticals and other commodities requiring temperature-sensitive transport. TempControl’s customer-focused approach features both standard and customized SOPs and a network of 67 certified handling locations worldwide. Temp Control’s volume of business, along with our investment in facilities, teams and product development, continues to grow each year. United Cargo delivers shipping solutions via the cargo capacity of world’s most comprehensive route network – 4,500 flights a day to 339 airports operated by United Airlines and United Express. United operates a mainline fleet of more than 720 aircraft, including 170 wide-bodies, on which United Cargo carried 1.44 billion pounds of cargo worldwide in 2016. For more information, visit: www.unitedcargo.com.
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