IBM Study Finds Lapses In Healthcare Supply Chain

Pharma, bio-tech, medical device, and consumer healthcare companies are far ahead of many others in supply chain planning with their suppliers. But the industry falls behind when it comes to collaborating with customers on demand planning, forecasting, and replenishment, IBM has found in a survey of top supply chain executives. 

These are critical steps for rapidly responding with new vaccines in the event of pandemics, and to ensure that demand does not outstrip supply. Yet more than 50% of executives at leading healthcare industry firms say their companies fail to respond quickly enough to pandemics and other emergencies because of supply chain lapses, according to IBM’s “The Smarter Supply Chain of the Future: Life Sciences Edition” survey.
 
The survey sought answers on how well firms are doing at planning, logistics, procurement, and coordination through the life cycle of their products.
 
While tracking every step in the manufacture and distribution of drugs are key priorities for over 70% of companies, they must work to improve their ability to keep wholesalers, hospitals, and pharmacies stocked with the product needed to meet patient demand, the study says.
 
 As a highly globalized industry, particularly in the area of research and development, the life sciences business faces daunting capacity, quality, lead time, and delivery issues. More pharmaceutical companies are selling drugs, devices, therapies, and services supplied by different partners.
 
Seventy-six percent of respondents suffer quality issues linked to global sourcing.
Fifty percent reported increased sales from their global expansion stemming from growing populations of consumers in rapidly developing markets.
 
Among other key findings:
 
64% reported rising customer demand for designer drugs or specialized packaging as a major challenge.
 
With growing supply chain complexity, monitoring risk to prevent counterfeiting, recalls, and loss of intellectual property is a priority for 75 percent of executives.
 
Though three-quarters deploy surveillance programs, anti-tamper devices and special labeling, results have been mixed.
 
As 65% collaborate with suppliers on demand planning, only 31% do so with customers. And though 46% consider vendor-managed inventory for customers extremely effective, only 4% use it to ensure they are precisely meeting demand.
 
More intelligent supply chain systems that connect suppliers, manufacturers, distribution, and customers can support more effective inventory allocations around the world, real time adjustments in production and distribution, and avoid costly stockpiles. These efficiencies can be attained with the use of sensors and other smart devices for communicating and sharing information, the study says.
 
Smart pallets, for example, can sense what and how much product they carry, monitor refrigeration and storage conditions, and automatically signal when replenishment is needed.
 
“As industry faces a time of transition, supply chain executives are outsourcing more business processes, turning to emerging markets and becoming more globally integrated, all while actively managing risk,” says Dr. Philippe Cini, life sciences supply chain management partner, IBM Global Business Services.
 
“The companies we spoke with said they are looking to a different kind of supply chain—one that gives the insight to react instantly to risks and threats, is much smarter and able to provide them the insight and agility necessary to compete in a changing marketplace,” he adds.
 
 
 
 
 
 
 
 
 
 
 
 
 
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