Since regulators around the world began introducing serialization and track and trace regulations, the pharma industry and all its supply chain players have devoted significant resources to achieving compliance, with many adopting the position that it was yet another legal burden, and an unusually costly and complex one.
 
However, with the major compliance deadlines passed for the U.S. and Europe, serialization will soon become business as usual and companies will continue searching for opportunities to create business and operations value.
 
In this Q&A with Roddy Martin, chief digital strategist at TraceLink, we ask what is now possible with digital interventions and what the future holds for a serialized pharma supply chain.
 
Contract Pharma (CP): What is underpinning the discussions in the life science industry about using serialized and track and trace data to create additional business value?
 
Roddy Martin (RM): Systematic serialization is the ideal opportunity to create an end-to-end value network that uses serialized data and processes to create a Digital Network Platform that improves visibility and transparency across the end-to-end life sciences supply chain. The inherent capability that underpins every value-based digital initiative and digitally enabled transformation is visibility, with visibility defined as true end-to-end business process transparency and not just visibility achieved from software systems.
 
Many companies have spent billions of dollars on enterprise resource planning (ERP) software thinking that they would achieve end-to-end integrated visibility of their operations. This has not been the case. The fragmentation of end-to-end supply chain stakeholders; clinical trial suppliers, contract and own manufacturers, distributors, warehouses, hospitals, pharmacies and patients, has resulted in a lack of end-to-end transparency in healthcare and impacts efficiency and collaboration capabilities. Stakeholder data is in different formats across multiple systems and companies often have multiple sources of data without one agreed “single version of the truth.” Today, serialized data with defined track and trace processes have created the unique digital thread—also referred to as digital twin—that runs across the business and healthcare ecosystem enabling cross-functional bridging of this information and process silos to improve transparency and collaboration opportunities.
 
Recently, especially in medical devices (for now), discussions around interoperability as a regulatory requirement will further enable integrated visibility. However, with multiple versions of the truth, silo’d harmonization of processes and data across projects and functions, a lack of overarching data and process governance, and integration with partner systems; achieving end- to-end visibility remains a challenge. Strictly controlled serialization and standardized track and trace process capabilities achieve this by design and will also lead to improved interoperability. Where leaders have improved end-to-end cross-functional transparency and visibility, they have been able to improve performance of market and patient-driven Integrated Business Planning (IBP), also known as Sales and Operations Planning. IBP is the holy grail capability and alignment for Business Operating Models, but to successfully improve business performance, IBP must be based on accurate and harmonized master data and reliable visibility of supply, demand, operations, and business performance. Serialization and track and trace have forced organizations to prioritize their management of standards, master data, and processes; fortunately in the process, they have laid the foundation for improved IBP when supply chain, regulatory compliance strategies, and digital initiatives such as advanced analytics and AI converge.
 
CP: What is the value of this kind of visibility to the life sciences?
 
RM: With a number of trends including the loss of patents, mergers and acquisitions, technology-driven disruption, growth in generics, and the shift in the development pipeline to personalized and rare/orphan treatments; the need for streamlined, integrated, and more responsive end-to-end supply chains is increasing. 
 
Many of these trends are increasing supply chain and business operating model complexity and businesses across the industry are facing pressure on responsiveness and margins.
 
Price pressures, combined with serialization regulations have changed the way many pharma companies operate. With improved visibility and product controls, companies have significantly reduced the amount of standing stock levels held compared to the past. Together with advanced IBP capabilities and evolving sophistication of orchestration analytics and AI, the most effective way to achieve accurate inventory planning and “win safely at every patient” is by focusing on visibility into a drug’s entire end-to-end supply chain. The evolution of a Digital Network Platform provides the technology and process foundation to build this capability across the healthcare ecosystem.
 
The growth in personalized and rare/orphan treatments will create similar cost and responsiveness challenges. Shipping a specialized product to a small number of patients (one in some instances) is forcing supply chains to be designed and operated with increased agility, scale, and responsiveness. An end-to-end, patient-driven, efficient, and lean supply chain that is compliant, serialized, and designed for tracking and tracing of products even for small volumes of products is hard to achieve, but key for future competitiveness and patient-facing effectiveness.
 
For new product sponsors, developers, contract research and development, and manufacturing organizations (CROs & CDMOs), taking several years to develop and launch new drugs that are extremely costly is no longer acceptable—the commercial pressures on drug companies to launch new products to market and achieve peak sales quickly are simply too high. In response, supply chain and digital transformation strategies are increasingly looking at ways to integrate processes between R&D, CROs, CDMOs, and sales and marketing as well as distributors, warehouses, and 3PLs to reduce costs and improve responsiveness. In many cases, new disruptive digital applications such as multi-sided Digital Network Platforms are improving visibility and collaboration across the network of partners. This trend is essential if costs are to be trimmed and network scale achieved.
 
CP: What role do you think supply chain leaders should be playing in serialization?
 
RM: Chief supply chain officers have been buying technology-based visibility for years in the form of network design and planning tools, Control Towers, and ERP systems; however as of yet, they haven’t fully realized the potential that the convergence of track and trace and end-to-end supply chain processes and serialization hold. Supply chain and regulatory compliance leaders don’t necessarily sit around the same table except in cases where special products have unique needs (like cold chain). The new serialization and track and trace leader—previously generally someone in compliance—will ultimately morph into the supply chain team when the business realizes that serialization delivers the data and digital twin needed to deliver growth and achieve efficiencies.
 
With increased importance of IBP and the Digital Network Platform as the focus in the coming years, end-to-end visibility of supply and demand across all segments of the pharmaceutical supply chain will enable new ways of working and improve patient safety and service.
 
CP: Where do you see the life sciences supply chain in 5–10 years?
 
RM: In the next five years, we’ll see the increasing digitization of end-to-end supply chains and network markets. Digital Network Platforms, big data, advanced analytics, and machine learning will increasingly come into the strategic capability equation. 
 
The underlying challenge is that life sciences and pharmaceutical companies have traditionally been risk averse, tend to follow the “tried and tested” herd, and don’t like to be the first to try something new; transformational change will be hard. Life science businesses have years of dealing with heavy regulatory control; and often innovation and progress has been stymied as a result. Businesses tend to see compliance as restrictive controls and an obstacle to moving quickly enough. In order to deliver transformative change, this mentality will need to shift. Leaders will need to reimagine what a supply chain is, change the mental model from supply- focused to end-to-end patient-focused, and build the digitally enabled network platform that will improve capabilities and performance.
 
In the past, analytics have traditionally been delivered on a transactional basis with Manufacturing Execution Systems (MES) and ERP systems and the focus has been on answering questions businesses know they already have. The questions are often around shipping and inventory records e.g., “how many products did we ship, and where to?”, “How many products did we discard and why?”, “Do we have any quality issues?” However, the answers are often derived from multiple versions of the truth, leading to inaccuracies and poor decisions such as excess inventories.
 
Advanced analytics will change this historical paradigm and will allow us to look for new questions that need to be answered; companies will use models to identify new patterns in the system and use these to plan differently. This provides the capability to ask questions businesses never knew they could answer. The availability of track and trace visibility and process data, together with serialization data and transactional business data (e.g. costs, resources, capacity) will allow them to identify new patterns and make breakthrough decisions off insights that were not possible before.
 
Beyond this, in the 10-year timeframe, we will see the digital operating models and Digital Network Platforms as the norm throughout the life science community. Businesses will plan and operate off orchestrated data and algorithms that are built on Digital Network Platforms, where every entity, partner, and business process is part of a networked ecosystem. Achieving this network effect will dramatically improve responsiveness and collaboration across the healthcare ecosystem which will lower total costs, improve overall supply chain efficiencies, and ultimately yield better patient outcomes. 

Roddy Martin will be discussing this topic further at FutureLink Barcelona, taking place this week, 11-13 June 2019. The event will see leaders from across the life sciences industry gather in Europe to reimagine the future of healthcare delivery and explore how data-driven innovation is transforming business and patient outcomes. FutureLink Nashville will be taking place 2-4 October. For more information and to reserve a seat, please visit here.
 
Mr. Martin brings more than 36 years of experience in engineering, manufacturing, supply chain, digital technology, sales and marketing, strategy and operations consulting, research, and analysis. He also has executive leadership experience from South African Breweries, SABMiller, Accenture, Oracle, and AMR Research/Gartner. Mr. Martin works closely with senior executives from global life sciences, CPG and hi-tech companies and has experience with several global clients in end-to-end supply chain strategy, digital transformation, segmentation, best practice benchmarking and leading and managing change as part of business transformation initiatives.