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Using Pharmaceutical Supply Chain Data to Build Resiliency

While gaps in the pharmaceutical supply chain existed long before 2020, the COVID-19 pandemic has highlighted their significance. Pharmaceutical companies face complex challenges related to efficiently sourcing, tracking, and testing materials on a global scale. And these challenges will only grow as the industry does—according to the IQVIA Institute for Human Data Science, spending for this sector will hit $1.5 trillion by 2023. Harnessing pharmaceutical supply chain data can provide visibility and offer insights for mitigating bottlenecks and other problems. 

Potential Disruptions to the Pharmaceutical Supply Chain

As pharmaceutical sales have increased, so has the complexity and global nature of the supply chain feeding this expansion. 93% of executives recognize the risks involved in this complexity and plan to take steps to make their supply chains more resilient, according to a recent McKinsey Global Institute survey

Even when a pandemic isn’t occurring, there are plenty of other disruptions that wreak havoc on the pharmaceutical supply chain. Natural disasters, international trade tensions, civil unrest, and cyberattacks all present unique challenges to the resilience of individual suppliers that create single components for many critical drugs. 

Aside from macro-level disruptions, smaller contract manufacturers can pose a threat for the pharmaceutical supply chain. In an effort to spur growth and reduce costs, many pharmaceutical companies have come to rely on an intricate network of these contract manufacturers, scattered around the globe. But this dependence has elevated the risk of supply chain disruption since these smaller contractors are often more vulnerable to local or regional disruptions such as hurricanes, flooding, or political instability. Financial insolvency or serious lapses in quality control oversight can take one of these suppliers offline for months with little notice.

Additionally, new modalities such as regenerative medicines, including stem cell therapies and human antibody treatments, have further increased the complexity of producing and distributing medicines with compressed development timelines and shorter shelf lives.

Ways to Make the Pharmaceutical Supply Chain More Resilient

The COVID-19 pandemic has placed a spotlight on just how quickly unexpected events can cause complex, global supply chains to break down. This has increased the urgency for pharmaceutical companies to evaluate their own supply chains and identify vulnerabilities early on before they result in critical supply disruptions. Unexpected disruptions will happen, and it’s impossible to completely eliminate every threat to the supply chain. But there are concrete steps that pharmaceutical companies can take to shield their supply chains from costly disruptions.

End-to-end transparency

Having an in-depth understanding of your suppliers (and their suppliers) at each stage of production and how they’re interrelated is essential to proactively identify areas of weakness. Analyzing internal and external data sources can help planners evaluate risk factors such as the financial viability of suppliers, adherence to robust data protection and cybersecurity protocols, adherence to quality control standards, exposure to regional risks such as severe weather, and manufacturing and delivery performance metrics. 

Stress-testing and reassessment

Using data to model how potential supply chain disruptions would impact production helps decision-makers identify the best way to respond. Advanced simulations and scenario planning can be used to spot vulnerabilities such as overreliance on a single contract manufacturer or critical production capabilities concentrated in a single region. Once potential pinch points have been identified, structural changes can be made to create a supply change that’s more resilient.

Reduce exposure to shocks

There are a number of ways to reduce the impact of supply chain shocks. Diversifying the number of suppliers is one of the simplest and most powerful ways to soften the blow of an unexpected outage. Ensuring that suppliers are spread out over multiple regions reduces the overall risk of regional disruptions such as severe weather or political instability. Developing advanced analytics capabilities to detect threats to production earlier makes it possible to reroute key components and quickly pivot sourcing from one supplier to another. This same technology can also be used to rapidly shift production capabilities from one facility to another.

Prioritize supply chain resilience at all levels of decision-making

Developing a company culture that values and actively pursues supply chain resilience is key to the long-term success of any pharmaceutical company. Shocks to the supply chain will happen. So being prepared to pivot quickly is critically important. Developing internal management’s ability to use data analysis and planning tools to address potential risks at every level of supply chain and production ensures that the effects of local, regional, or global shocks are accounted for. 

Insights from Pharmaceutical Supply Chain Data

Supply chain data can be mined to uncover a wealth of insights that can help planners identify and address potential vulnerabilities. Here are five specific examples of how analyzing supply chain data can help pharmaceutical companies improve efficiency and strengthen their supply chains.

Demand visibility 

Being able to accurately forecast demand can help pharmaceutical manufacturers better match production with how quickly their drugs and therapies will be needed. This helps prevent oversupply and shortages. This data can also be used to calculate how long current supply on hand can last during a supply chain disruption, informing decision-makers how long they have to find a solution before serious drug shortages occur.

Inventory visibility

Advanced analytics can be used to more accurately predict how long a particular drug or other treatment will stay in stock before it’s sold and how much product is staying in inventory too long to be sold. This insight can help pharmaceutical companies make more-efficient use of their production resources. 

Transportation analytics

Through the application of data analytics, pharmaceutical companies can realize increased efficiencies that significantly reduce transportation-related costs. Using data to more efficiently plan loads, consolidate shipping costs, and improve visibility of in-transit goods all play a role in streamlining how individual components and finished goods are transported. 

Manufacturing analytics

Data analytics can be used to improve manufacturing efficiencies and avoid unplanned outages due to equipment failures. Data gathered from sensors mounted on manufacturing equipment can be used to accurately predict when equipment will need to be serviced. Inputs from scanners and other sensors can ensure that quality standards are maintained and detect critical quality control failures early on.

Network optimization

Network design is a data-driven modeling approach that can lower the costs of production, improve operational efficiency, and optimize supply chains to better withstand potential disruptions.

Snowflake for Life Sciences

Today’s pharmaceutical companies collect massive amounts of data on their supply chain. But often this data comes from myriad sources, and it’s typically siloed, unable to be easily analyzed by decision-makers. The Snowflake Data Cloud allows data from multiple sources to be integrated on a single platform, making it easy to run advanced analytics tasks designed to uncover actionable insights for improving operational efficiency, cutting costs, and developing a more resilient supply chain. 

Snowflake allows near-unlimited storage and computing capacity that enables faster analytics queries. Sensitive data is stored securely with built-in security and governance that supports HIPAA, HITRUST, SOC 1 and 2 Type II, PCI DSS, and FedRAMP (medium) requirements. 

Explore Snowflake’s capabilities for the pharmaceutical supply chain and see what it can do.