Digital Transformation in the Field of Pharma Supply Chain

Digital transformation is becoming the new norm of the pharma industry that aids the industry in achieving its business targets. It is a complete transformation from traditional practices, and at the same time, ease of technology, lower costs, and ready support make it affordable. 

What is Digital Transformation?

Digital Transformation is the implementation of digital technologies in traditional business and non-digital business functions. It changes how the entire business life cycle delivers value to its customers. The digital transformation's primary purpose is to improve existing processes regarding productivity, efficiency, quality, and cost effectiveness. Additionally, this technology is also being applied to the areas or departments, where traditional technology methods do not work, such as supply chain and sales.

The supply chain has definite value in the pharma industry, as does drug manufacturing. It manages the supply of everything involved in the industry. It is also responsible for solving problems, such as disruptions, during the entire supply chain life cycle.

The use of digitization tools is expanding rapidly in the pharma industry due to the advantages it offers, such as

· Ensuring regulatory compliance by monitoring & tracking manufacturing processes. 

· It helps to keep records and generate documentation.

· Digital tools enable the production process to follow approved & tested procedures to ensure high degree of quality & safety.

· Digital tools, such as data analytics, can be used to study historical processes & suggest improvements

· Digital tools can also help to develop new pharma technologies, enhance drug discovery, and increased effectiveness of production processes

What is meant by Digital Transformation in the Pharma Supply Chain?

Digital transformation is the name of utilizing the latest digital technologies in the pharma supply chain. It transforms the traditional supply chain into an effective method, where material handling and inventory are managed  to the highest benefit of the pharma manufacturer. It helps real-time tracking, automates manual processes, develops & maintains electronic records, enhances product security, and ensures regulatory compliance - all of which constitute the ingredient of a high tech digital supply chain.

Digital Transformation also enables the supply chain to coordinate and communicate with other departments to optimize inventory, prevent disruption and manage material shortages. It is able to understand the needs & requirements of different manufacturing areas, and can plan inventory levels or manage materials. At the same time it  prevents problems such as  over- or under-stocking.

Before we discuss the digitalization in the pharma supply chain, let's point out the challenges with the traditional pharma supply chain.

Challenges in the traditional pharma supply chain

Some challenges with the traditional pharma supply chain are described below.

No idea about the current state of the materials

Real-time tracking or visibility in the supply chain refers to applying technology to understand and know the current state of the pharma goods. It provides information about the material’s movement and indicates each stage. Tracking also includes utilizing digital technologies to monitor product-level  parameters, such as temperature.

The traditional supply chain cannot track real-time conditions and relevant data throughout the entire supply chain life cycle. This absence of real time tracking becomes critical for cold chains, where there is no method to determine whether required conditions for sensitive products (such as the temperature sensitive) have been provided or not. As a result, quality & safety of the product manufactured from the raw material will be affected.

Product Security

Product security refers to the capabilities of  a pharma product manufacturer & supplier to protect the product from theft, tampering, and counterfeiting. Pharma products are profitable due to their criticality in human health, criminals often take advantage of this by by breaching the product security in the from of 

· Stealing products during the logistics 

· Product counterfeit

· Tampering

Product security is another major challenge unresolved in the traditional pharma supply chain. It lacks a mechanism to track the product, monitor its route, determine if there has been alternation with the product or  its packaging, and track the product if it doesn't reach at specified time & locations.  Traditional procedures have only relied on physical measures, such as security hiring or banning stops at certain distances, but still  these measures have loophole and thieves can easily  manipulate.

Paper-based records

Traditional supply chains depend entirely on paper-based records and use manual systems to execute their function. Each process, big or small, requires manual processing every time the item is moved between individual stages.  Even if computers or storage are used, it requires the physical movement of these storage devices.

Above all, paper-based records are prone to human error, which could increase processing time, causing delays in routine supply chain functions.

Regulatory Compliance

Regulatory compliance is necessary in every pharma department's processes , including the supply chain. Compliance helps to increase customer trust in the product, provides a strong base for the market, and enables the ability to scale up in new markets.

For traditional supply chain practices, there have always been problems related to  regulatory compliance, such as

· Inability to track the real-time movement of goods making it difficult to detect problems in the supply chain.

· Difficult to establish an effective partnership with the suppliers, and hence makes it difficult to develop compliance requirements related to the suppliers.

· As mentioned earlier, manual processes are always prone to human errors, increasing the risk  of non-compliance and subsequently regulatory action.

Inventory Management Issues

Efficient inventory management is necessary for the organization to keep the business running while preventing material wastage and ensuring efficient resource management. It helps to manage & arrange material in time when required, while avoiding problems, such as over- and under-stocking.

Traditional pharma supply chains rely on manual based processes. The main disadvantage is its inability to track the existing level, location and status of the material, providing little visibility to inventory. 

Additionally, it also has the following limitations.

· Overstocking, where unnecessary inventory can pile up, leading to excessive storage costs, can result in the spoilage or expiry of material.

· Understocking, where the required material is not timely available, due to a lack of traceability, resulting in a breakdown in manufacturing operations

· Increases storage costs

· In accurate forecasts and thus rising of being losing the market

· Delays in material ordering and receiving

Technologies for the Digital Transformation in the Pharma Supply Chain

Industrial Internet of Things - IIoT

IIoT refers to the sensors that measure different variables & parameters and transmit them in real time to a suitable controller for analysis and decision making. IIoT technology is frequently used in all industries, and the pharma supply chain can also benefit from it.

For the pharma supply chain, IIoT sensors enable continuous monitoring of critical data such as the environment. It can also be developed to measure product-specific parameters, such as chemical properties. It can also be used to track individual products during transportation for different purposes, such as monitoring the product to estimate the arrival time or ensuring product safety reasons.

Artificial Intelligence - AI

Artificial Intelligence is a mechanism that uses a large dataset to assess future trends and make informed decisions. It analyzes historical trends of different processes, predicts outcomes, and identifies which persons or systems can be used to improve the process by overcoming deficiencies.

Pharma supply chains can benefit from AI by leveraging its capabilities to predict future outcomes, such as demand forecasting. It can predict product or material requirements before they actually occur on ground. This prediction can be used to make arrangements of materials or items before time and to prevent breakdowns.

It can also help to make cost-effective decisions by arranging the material at times of lower price, or when the material is in less demand.

Big Data

Big Data is the vast amount of relevant data fed to the AI for decision-making.  The higher the quality of data, the better the result of AI and the supply chain performance.

There can be different points of data collectors, such as suppliers and logistics. The data is then fed to the analytics, which analyzes it against algorithms.  The pharma supply chain can use big data for

· real-time tracking

· Understand the current state of the material and identify delays in delivery

· Efficient decision making

Cloud Storage

Cloud storage is a centralized storage that exists virtually and is owned by a third party. It is accessible over the network, without physical infrastructure at the user's location. Cloud Storage is used to store large amounts of data.

Cloud Storage in the pharma supply chain helps provide a platform accessible by all relevant users. It allows collaboration between different segments and departments of an organization as part of the implementation plan of the digital supply chain. 

Implementation plan for digital technology in pharma supply chain

Implementing digital technology in the pharma supply chain requires understanding the needs & requirements of the industry. Determining what type of digital tools can be best suited, and the scale of investment management that is willing to do.

Some procedures for implementing digital tools in the pharma supply chain are summarized below.

· What is the personnel's current understanding of digital tools, and how far do they go in implementing digital tools?

· Determine the current situation of the pharma supply chain, and are there any tools presently implemented? 

· Select appropriate digital tools in line with the requirements.

· Implementing these technologies by selecting relevant suppliers 

· Implementing change in existing supply chain procedures 

· Training of relevant human resources

· Monitor for identifying and mitigating faults.