Supply Chain Vulnerabilities in a Post-Pandemic World

Publication
Article
Pharmaceutical TechnologyPharmaceutical Technology, March 2022 Issue
Volume 46
Issue 3

Although the bio/pharma supply chain has vulnerabilities that still need to be addressed, the COVID-19 pandemic has left lasting effects—some of them for the better.

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AdobeStock_271261047

The bio/pharmaceutical supply chain has been put to the test in recent years. While no one could anticipate the challenges and changes the world would face, industry experts must now seriously consider how their role in the supply chain can be supported to strengthen and stabilize an imperfect supply chain. But what could that look like?

“In an ideal world, I’d like to see life sciences supply chains break down the linear and functional siloed approach that exists today to become a dynamically connected ecosystem that integrates the full supply chain network in a collaborative and optimized way,” says Stephanie David, vice president, Pariveda. “A dynamically connected and integrated ecosystem can enable life sciences supply chains to finally be patient-centric and purpose-driven.”

David describes a patient-centric supply chain as relying on an interconnected digital network that puts the patient at the center of the supply chain and enables real-time, end-to-end visibility of the movement of drug products and other goods within the supply chain network. This way, organizations can quickly sense, react, and predict changes to the demand and supply.

Editor’s Note: This article was published in Pharmaceutical Technology Europe’s March 2022 print issue.

Similarly, Glenn Koepke, GM, network collaboration, FourKites, believes greater end-to-end visibility and smarter paths to patient communities need to be harnessed to reduce waste and accelerate patient outcomes.

“[An ideal supply chain] would master the control tower concept, stitching together complex and siloed supply chains, so organizations have greater visibility and better insights to help them run more efficient operations,” says Koepke. “Real-time visibility platforms are the connective tissue that enables excellence.”

Heather Zenk, RPh, PharmD, president, distribution services and supply chain operations, AmerisourceBergen, adds that a supply chain would ideally have a standardized set of methodologies and infrastructure to share data across the private and public sector supply chains.

“I say this because when AmerisourceBergen and other private sector partners were operationalizing programs with the federal government at the beginning of the pandemic, one of the biggest issues we encountered was that there wasn’t a common language shared between us. Allocation and shortages, for example, take on different meanings depending on where you sit within the supply chain,” says Zenk. “In addition, the public and private sectors were building data sharing capabilities at the same time we were all trying to collectively manage the crisis. So, we took on the effort together and spent the time to build software systems and portals—to create this infrastructure that didn’t exist pre-pandemic—to share information across these two sectors. If we can standardize methodologies, data processes, language, and information sharing for both the private and public sectors, that will help tremendously when the next crisis hits.”

Significant supply chain vulnerabilities

Being proactive, rather than reactive, is a considerable challenge the industry faces to address current supply chain vulnerabilities. Without proactively addressing vulnerabilities, organizations could go into “survival mode,” as David puts it.

“[M]ost, if not all, supply chains are set up primarily for cost efficiency and not resiliency or agility,” says David. “Sourcing of raw materials and lack of visibility into supplier risks, capacity limitations, and cybersecurity are some of the most critical vulnerabilities organizations are being challenged with. Without the ability to effectively illuminate the extended supply network end to end, many life sciences organizations have no other choice than to shift into survival mode and/or incur costly measures to prevent a breakdown in the supply chain that can leave patients without access to their therapies.”

David adds that while organizations have invested in supply chain management systems, many are still relying on spreadsheets and manual processes.

In addition to inherent flaws in the foundational setup of the supply chain and the need for fewer manual processes, there are functional shortcomings as well—particularly with regards to cold chain storage and distribution.

“The biggest vulnerability in today’s bio/pharma supply chain is product protection and loss as a result of temperature fluctuations or security breaches. Temperature has been a particular focus during the pandemic,” says Koepke. “But cold chain failure in the supply chain can be catastrophic for COVID vaccines and beyond. Pharmaceutical executives have identified up to 20% spoilage rates for non-COVID-19 vaccine wastage due to temperature failures in transport. The World Health Organization (WHO) reports that more than half of vaccines are wasted worldwide, and the United Nations claims that smarter cold chain management strategies could have saved a billion vaccines during the pandemic” (1).

Other supply chain vulnerabilities, according to Koepke, include product protection; supply and demand fluctuations; operating costs and penalties; and freight traceability.

Where the industry is getting it right

Although there are vulnerabilities that need to be addressed in the bio/pharma supply chain, there are other areas where the industry is tackling challenges head-on.

“Pharma and biopharma companies are very robust with enterprise resource planning (ERP) technology and are often highly integrated globally. This is driven by government regulations and requirements,” says Koepke. “In addition, these companies invest heavily in network planning to create as much consistency as possible. While this allows for as much mitigation as possible, even companies that have created a buffer will face disruptions.”

Additional headways where the industry has taken steps to improve the supply chain, according to David, include achieving end-to-end, real-time visibility; having enriched external data; digitizing parts of the supply chain; and streamlining supply chain processes by using artificial intelligence (AI), sensors, and analytic solutions.

“But more importantly, I believe that the supply chain’s robustness will depend on the appetite for innovation and the ability of life sciences supply chain leaders and the skills of their organization (people) to drive the acceleration and adoption of digital capabilities required to effect change across the end-to-end supply chain,” says David. “Because the supply chain is the operational backbone of life sciences companies, it is important that supply chain leaders can connect and clearly articulate the value and business outcomes of these initiatives to the wider enterprise—sales, marketing, operations, finance, etc.”

Positive impacts of COVID-19

The pandemic shook up the global supply chain, highlighting problem areas that needed to be addressed. But once these pain points were illuminated, the industry got to work.

“Before the pandemic started, the life sciences supply chain was already a fragile ecosystem due to the heavy reliance on outdated and manual-human intensive manufacturing and supply chain processes and systems,” says David.

According to David, existing systemic challenges and vulnerabilities that the pandemic exposed include fragmentation along the value chain, lack of shared data and information, lack of supplier visibility, and insufficient implementation of next-generation planning systems and capabilities. David adds that the old supply chain model relies on “foreign operations with tax advantages, dependent intellectual property, and inventory buffers as a strategic response to manage supply chain risk and long lead times.”

Turnaround time is one key area impacted by the COVID-19 pandemic for the better.

“The pandemic has catapulted pharmaceutical supply chains forward to move faster. The pharmaceutical supply chain is making a sharp pivot from a just-in-time model to a test in agility, resilience, and disruption that goes far beyond vaccinations to navigate fast-growing industry complexities,” says Koepke.

AmerisourceBergen, specifically, pivoted to launch therapies on a shorter timeline, having gone from a product launch with an 18- to 24-month timeline for manufacturing to 30–45 days. Zenk adds that therapies with COVID-19 indications may have a quicker turnaround time.

Other changes within AmerisourceBergen focused on improved communication. The company took steps to build relationships with federal agencies, nonprofits, and other private sector supply chain partners since the start of the pandemic, according to Zenk.

In addition, AmerisourceBergen changed its approach to sourcing and risk management, particularly for products that are finished abroad or have key starting materials, which have had limited availability throughout the pandemic.

“For example, we’re working with a diverse set of partners and built a database to ensure our sourcing of products isn’t overly indexed from one particular country or one part of the globe,” says Zenk. “We also rethought our allocation methodology. Pre-pandemic, distributors used a ‘fair share’ allocation model. We quickly shifted to more dynamic allocation procedures, which allowed us to respond more directly to the evolving situation and stabilize inventory across heavily impacted points of care.”

The prioritization of the supply chain has also been positively impacted by the pandemic.

“A few ways that life science supply chains have improved or rather changed since the start of the COVID-19 pandemic include that supply chain is now a key priority for the C-suite and that companies have adapted the supply chain footprint and adjusted effectively to new ways of working, boosted inventories, and ramped their digital and risk-management capabilities,” says David.

Zenk adds: “There have been countless lessons learned, and it’s critical for supply chain stakeholders to carry these lessons from the pandemic forward so we can shorten the learning curve for future issues.”

References

1. D. Cameron, “Covid-19 Vaccine Delivery Will Present Tough Challenge to Cargo Airlines,” WSJ online (Oct. 5, 2020).

About the author

Meg Rivers is a senior editor for Pharmaceutical Technology Group and BioPharm International.

Article details

Pharmaceutical Technology Europe
Vol. 34, No. 3
March 2022
Pages: 23–24

Citation

When referring to this article, please cite it as M. Rivers, "Supply Chain Vulnerabilities in a Post-Pandemic World," Pharmaceutical Technology Europe 34 (3) 2022.

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