Karen Taylor (00:00:04): Welcome to “Life Sciences Connect”, Deloitte’s Podcast on the Life Sciences industry. This series features conversations with leaders from across the Healthcare ecosystem sharing their insights on the critical issues facing the industry today.
Karen Taylor (00:00:28): Hi, my name is Karen Taylor and I lead Deloitte’s Center for Health Solutions, an independent research hub that supports Deloitte Healthcare and Life Sciences industry teams in their work. One of the most fascinating aspects of my job is being able to explore with industry leaders their views on the critical challenges that are affecting our clients and to explore potential solutions to these challenges. Over the past 12 months, we’ve been exploring the ways that artificial intelligence can impact the biopharma value chain — from the potential of AI to improve drug discovery, to its role in accelerating the clinical trials. Today we are discussing the role of digital transformation across the biopharma supply chain and how AI can help improve value and manage risks more effectively. During the course of our research the challenges presented by the COVID-19 pandemic became increasingly apparent. Our report, therefore, also considers the role that AI can play in helping the supply chain to Respond, Recover and Thrive. During the podcast, we will explore some of the innovations that are now transforming the biopharma supply chain, some of the challenges presented by COVID-19 and solutions to speeding up the implementation of digital transformation. I'm delighted today to be joined by James Gregson and Bruno Pfeiffer. James?
James Gregson (00:01:40): Hi Karen. Hi everybody. My name is James Gregson. I'm a partner based in London and I lead our Life Sciences Consulting business here in the UK. I spent 25 years of my career working in supply chain.
Karen Taylor (00:01:53): Bruno?
Bruno Pfeiffer (00:01:54): Hi everyone, I am Bruno Pfeiffer. I am the lead partner for our supply chain practice. I have been working in Life Sciences for now a decade — mostly on transformation and more recently on digitisation.
Karen Taylor (00:02:09): Thank you. As we've seen protecting the biopharma supply chain is really a high priority for all of our governments as to ensure that access to Life Sciences, saving a life enhancing products are available, but the need for digital transformation has come to the fore as never before and what is needed is intelligent, insightful monitoring and management of that supply chain. While many Pharma companies have explored this, we are yet to make consistent, sustained and bold moves to take advantage of new capabilities. What are the key challenges you are seeing in the biopharma supply chain, James?
James Gregson (00:02:46): Well, I think what's fascinating to me in terms of this transformation curve is how much has changed in the last 10 years. I think any of us working in pharmaceutical supply chain 10+ years ago would have been primarily focused on access growth compliance. And those are really the sort of the key drivers but I think as we've seen through sound investment for products change and the complex nature of the portfolio starts to come to the fore we’ve really seen a broadening and deepening of the scorecard for most biopharmaceutical supply chain businesses, really having to be a lot more cost and quality conscious and of course now starts to look at sustainability. So I think to answer your question about complexities a lot of these businesses are dealing with a huge legacy of large heavy footprints in terms of their supply chain and very much concerned by not losing access and not risking the regulatory authority that they have to deliver. So changing from that legacy into this new world is a large undertaking and only now are the businesses starting to measure performance in a different way, made more complex by some of these new products.
Bruno Pfeiffer (00:04:01): Yes, I think that's spot-on really. We see with the new type of therapies the need for entirely new operating models. We see that volumes are going down and with the personalisation the therapies are much more tailored to the individual. So the supply chain is, as you said James, becoming increasingly complex. But at the same time there's a need for a lot more automation. So there's a need for a capability to manage more complexity actually at a lower cost and I think we will reach a point where the manual management, as we know it, of a supply chain will just be prohibitively costly so that the only option that we have is really solve it with technology.
James Gregson (00:04:53): Just to add to that, the complexity is both a driver and a curse in terms of the ability to transform. It's a compulsion that has to happen, but it makes that transformation that much harder.
Karen Taylor (00:05:06): And what about the role of digital transformation? What are you seeing are the challenges that companies are facing in relation to actually adopting technologies in the way that other industries have done in the past?
Bruno Pfeiffer (00:05:18): So really our expectation was and — I'm interested in your view James — that the digital adoption in pharma, not just biopharma, but pharma in general would be a lot faster than it turns out to be. And why that is? Well, we do think that it is a combination of the needs for digital adoption not being as high yet as they are in other industries. So the pressure is not as high as in other industries and frankly the industry taking a stance of taking it step by step and really testing the options and testing the technology before going in big. What do you think James?
James Gregson (00:06:04): That’s absolutely true! I think there are probably four or five different areas to that point. The first point is that most operations environments in pharma haven't gone through global singular transformations like this before. So there's not much muscle memory or capability to necessarily do it. So it feels like a very new journey. I think the second thing that I've noticed is that the underlying technology used in pharma has been badly under invested for many many years, and so it's a complex legacy infrastructure to try and work with. And everyone knows that there are mountains of data that provides opportunity but clearly provides complexity too. I think the last point I would make is really around the lack of skills within the industry to really take on something like this and what qualifies you as a highly competent supply chain practitioner in biopharma tends to be a relatively discrete task, it tends to be quite technical in nature not necessarily using a sorts of skill sets that are required to drive through a transformation of this kind.
Bruno Pfeiffer (00:07:10): And if we think about the transformation along the lines of a maturity model what we have seen already is that use cases were tested. So there was a need to understand what is the value of digital transformation and also AI, and when we say AI that includes machine learning and data science. We are now entering in a state of understanding, companies start to understand where the value can come from and at the same time, they recognise that use cases alone or pilots alone will not get them onto a firm and solid transformation roadmap. So now it becomes the question of capabilities, infrastructure, data capabilities, operating model. There is a recognition that there needs to be a data science team in order to scale anything digital at all. So I think that's where we are right now. We start to see more fundamental transformation and we believe that in the next two to three to five years will see a massive scale up in digitisation and also specifically in the use of AI.
Karen Taylor (00:08:29): So those skills that you just mentioned, they are much sought after across all Industries and they aren't traditional skills that pharma companies have needed to invest in. Obviously, there are different approaches. What are you seeing, what's working for your clients in terms of acquiring some of these skills?
Bruno Pfeiffer (00:08:49): So this is absolutely spot-on! These skills are in high demand and pharma companies are not necessarily the first ones that attract the talent. What we do see is that our pharma clients, they actually turn to other companies — like Amazon and Google — to find the right skills, to bring them into the organisation and to give them the leeway to start building teams, building capabilities, building a new operating model in fact.
James Gregson (00:09:18): Yeah, I agree with that. I think the first word that came to mind is the ecosystem word. I think pharma supply chains and manufacturing environments are becoming far more inclusive — having to become more inclusive — bringing in those sorts of skills from the outside and partnering more effectively with technology organisations that can bring both the solutions and the skill sets to come with them. And I think the other interesting part of it is that we're seeing increasingly movements for these skill sets being developed above site level. More global capabilities as we are seeing the supply chain footprint being more consolidated with global level, is providing the opportunity to look for how teams and capabilities can be built in specific locations that are more dedicated to that skill set — something which has been only partially done in the past in pharma.
Karen Taylor (00:10:06): And if we think about what we're seeing happening over the past 16 weeks or so and the impact that the COVID pandemic has had. The complexity and the global nature of the pharma supply chain and how has that responded? How is that being able to continue to work in this highly complex and challenging time?
James Gregson (00:10:29): I think there are two sides to that Karen. I think you know supply chain has been thrust to the forefront of mind for an awful lot of people and governments and society. I think there are two quite distinct sides to it. The first is the challenge that we've witnessed in terms of supply and demand balancing a lot of pressure to ensure that supplier resilience is in place to make sure the product actually reaches where it should be reaching but also just unprecedented volatility in terms of demand signals for those products which has brought great complexity. But I don't think that's really, to your question, I don't think that's really the underlying topic and as it relates to this, I think the operational challenges that we've seen in the supply chain world during this period of time internally just in terms of keeping sites going, dealing with workforce challenges, really understanding and reacting to opportunities in a timely manner and — this last area actually which has been fascinating to see — the resilience of how pharma manufacturers and supply chain organisations have coped and done much better than I think we expected by really reprioritising and empowering lower tiers of management to take control and make more rapid decision-making. And that's a legacy I very much hope that we will continue going forward.
Karen Taylor (00:11:50): Bruno, is there anything that you're seeing that is giving you sort of confidence in the way forward?
Bruno Pfeiffer (00:11:56): Yes. So if we look at where was AI desperately needed in the time during the crisis. It was actually in two areas — one was to gain insights and to understand what is happening, be able to manage vast amount of data. One example is a platform that we have actually built for specifically the scope of understanding supplier risk — illuminating the supply side of the equation, understanding up to 13 tiers of suppliers across globe, identifying risk only on the back of publicly available data. So that is something that can really only be accomplished with the use of AI and vast amount of data. So that is one area that has proven to be extremely helpful and necessary in the times of crisis. The second area is speed, speed in operations, using AI and machine learning and also simpler technologies like RPA to automate and speed up operational processes as much as possible to get the human interaction out of the equation which ultimately means that in times of social distancing, in times of lockdown, is a key capability to keep operations going.
Karen Taylor (00:13:33): In health care, we've seen a real acceleration in the adoption of digital technologies to respond to those exact situations the problem with social distancing the need for access, but without being physically present. So are you seeing that same acceleration in pharma?
James Gregson (00:13:55): I think possibly. I mean I think at the moment — which I am sure Bruno would agree — but if there was one topic, one area where people have been most focused is around the idea of control towers and creating better visibility. Ultimately, you know, the crisis has created a need I think for better scenario planning. How do I test and understand what decisions I should be taking? How do I prioritise my options and that's required a real harnessing of analytics and data, end-to-end throughout the supply chain? And I've seen a real focus from a lot of supply chain businesses on how they rapidly deploy that capability or enhance it from an early adoption standpoint. I think what's second behind that is Bruno's point. I think there's been an incredible focus on the supply base coming into manufacturing and supply chain and all sorts of unusual arrangements being put in place in haste. And it's raised the question, I can see a lot of programs starting up — just as Bruno said — that are starting to now assess the resilience, strength and appropriateness of the supply bases that now support and starting to build out better contingencies going forward. But I think that the true sort of final step of this transformation into more of a touchless and virtual environment — that is something that will take a little bit more time, but I'm seeing those journey starting now. I don't think they're going to come straight hot off the heels of the pandemic but I think there is enough change and demand for change that’s instigating some of those programs and speeding up them getting underway.
Karen Taylor (00:15:32): And more generally what sort of legacy do you think we will take from the last 16 weeks and what we will need to go through in the recovery phase. What are the legacies that you hope to see as a result of the reaction over the last few months?
Bruno Pfeiffer (00:15:50): So even once we reach a state that we call the ‘Next’ or the ‘New Normal’, I believe that some effects of the crisis will stay with us. And those are a situation of much more difficult demand prediction and a much more volatile situation on the supply side as well. So any technology that has been built to help with fast demand sensing, with understanding illuminating risk on the supply side, I believe would be a differentiator going forwards.
James Gregson (00:16:26): Yeah. I think I definitely agree with some very well made points there by Bruno. I think what I would add in terms of a legacy Karen is that I hope that it starts to change the perception of relationship with the regulators as well. And by that, I mean two things. First of all, regulatory compliance has always been an excuse for not changing. There's always been such caution about that and we saw during the pandemic some really accelerated dialogue between regulators and pharmaceutical businesses. And I think we saw a lot that can be done and I hope that kind of resets people's expectations and their ambitions. I think specifically, in talking to some of my clients, topic of tech transfer got completely changed during this time of very expensive and long-running process, but it shows that actually in a crisis if we collapse down some of the traditional ways of working in some of the bureaucracies on both sides, the decision making can be a lot more efficient and I really hope that agility is a legacy that comes in a spirit of time.
Bruno Pfeiffer (00:17:35): We also see an increase in demands around digital twins and digital threads, the capability to actually model visualise digitised physical operations and to your point James whether it is being able to manage tech transfers in a much faster way, whether it is to understand the risk in operations in a much better way, but also to increase efficiency. We haven't talked yet about the fact that we might be seeing a rethinking of global supply chains in the sense of — is the strategy to go for low-cost countries, is that the right one, is that the only strategy that will drive supply chains in the future, or will we see that digital technology will actually help to build regional models, to increase resiliency, reduce the dependency on certain countries as a source and a hub of operations. So I believe we will see a lot more digitisation in the years to come.
Karen Taylor (00:18:48): I suppose in a way that brings me to sort of one of the last points whilst the pandemic has consumed a lot of our attention one of the issues that was there before hand and will continue to be there is sustainability and the impact that this industry does have on climate change and the need to be able to demonstrate the carbon footprint of a company and how that is impacted by the supply chain. So I don't know if there's any observations you would like to talk about in respect to that but I think that is something that's going to be with us for some time to come.
James Gregson (00:19:25): No, hundred percent. I think this is such a key point. I think there's a lot of people recognising as we come out of this pandemic it's reset society’s expectations as well. And I think that that carbon and sustainability agenda is going to shoot to the top and be a really really sort of pivotal parts of everyone's score cards over the next few years. And absolutely I think if you look across our industry at the moment, you see a real diversity of maturity when it comes to awareness and focus on the sustainability topic there is such a huge opportunity — if not compulsion — actually, frankly that this has to be addressed and whether it's exclusively the use of electronic vehicles, whether it's the connectivity there are huge huge opportunities, and I'm very excited about that. I think the digital transformation or the digital capability will be a real key to unlocking some of the legacy challenges around it because things will have to be done differently and that will require new technologies, new ways of working together.
Bruno Pfeiffer (00:20:29): And to add another aspect to what James said. These things do not happen in isolation. Building these capabilities has a massive need for other capabilities to grow with them at the same time. If you think about digitisation, you're introducing potentially vulnerabilities on the digital side. So cyber security becomes a very important topic. Digitalisation doesn't work, a digital twin cannot be built without data. So data capabilities, data management capabilities become very important. Data architecture, cloud, cloud strategies being implemented, cloud infrastructure. So in essence digitisation is a joint effort of quite a few parts of the organisation. It is the business side. It is the supply chain side. It's the commercial side together with IT, together with compliance. And to orchestrate that transformation that is one of the key challenges really.
Karen Taylor (00:21:39): And that really brings me probably to the last question, which is what you described there Bruno is almost the sort of dissolving or the removal of the barriers that have traditionally been there between the different silos of a company and how they come together in much more multidisciplinary teams, and the planning is involving many more people than traditionally. Are there any messages you'd like to leave our listeners with around the transformation and digital is a tool but actually this is about change management. So what sort of messages would you like us to leave our listeners with?
Bruno Pfeiffer (00:22:19): I think this is an excellent question Karen. I think it comes back to leadership in the sense of who takes the need. I have been part of quite a few conversations where this question is not quite clear or is not answered. Within a corporation, there's the expectation — well, if it is digitisation should then perhaps IT take the lead. IT of course puts the question back to business and raises the question — well, what is the business case. And there is, you know, there is no right or wrong but I think that is one of the of the questions that need an answer, that need someone to take charge, someone to lead the transformation. And with that many things will have to follow.
James Gregson (00:23:06): I think if I might add to that Bruno, I am not sure if you agree, but I think going back to one of the points that you made earlier on about proof of concepts is, it requires a certain fortitude and boldness to go and build and transform. Control experiments are very popular in biopharma world, proof of concepts are being run all over the place. There's thousands of them but it takes little bit more commitment, leadership as u say, and focus on boldness to put operations at the heart of the biopharma transformation that's happening at the moment. To really and I think coming back to what we were saying before the next wave of therapies, the next generation products and therapies that are coming through will probably be a catalyst because it will have to happen. I mean if we're led to believe that the overall portfolio over the course of the next four years will be around about 50% biological orientated therapies, products and solutions out there. Then that will demand this level of transformation. So there's something about embracing that compulsion being bold about it, and being prepared to create a plan a narrative and excitement around a broader transformation than just little pockets around the fringes feeling like they're doing something digital but not achieving a great deal.
Karen Taylor (00:24:23): Thanks. It did really emphasise that the need for that resilience in your leadership as well as being clear about who is taking the lead. So I think that's probably the end of our conversation for today, but there’s lots of food for thought and of course the supply chain is so critical to the delivery of medicines and to the improvement of health all around. Thank you to our guests Bruno and James for sharing your insights today and thank you to our listeners. I hope you'll join us again for our next episode in the Life Sciences Connect podcast series.
