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Digital supply networks

A new imperative for life sciences

Without the advantages of digital, leaders in life sciences could lose competitive ground that can’t easily be regained.

March 8, 2018

A blog post by Stephen Laaper, principal, Supply Chain and Manufacturing Operations and John Allen, senior manager, Supply Chain and Manufacturing Operations.

Life sciences companies are usually not considered market leaders in the race to embrace new technology and digital transformation. Whether deserved or not, this reputation—and the reality—should change. Without the advantages of digital, leaders in life sciences could lose competitive ground that can’t easily be regained.

It’s an urgent call to action, but also a huge opportunity. Specifically, digital supply networks may present an opening for incremental or wholesale digital transformation that can achieve two important goals at once. First, they can help life sciences companies maintain or increase their competitive advantage. Secondly, digital supply networks can address some of the significant forces affecting life sciences, including pricing pressures, the emergence of value-based and personalized medicine and products, and the changing expectations of customers and regulators.

What are digital supply networks and how can they deliver value in life sciences?

Digital supply networks represent a dramatic shift from linear, sequential supply chain operations to an interconnected, open ecosystem. This makes it possible to collect and analyze data in powerful new ways, providing insights that can help improve business results and patient outcomes.
Based on advanced technologies such as machine learning and additive manufacturing, digital supply networks can provide data flow and analytics, connectedness, and electronic tracking. They also can bridge physical and digital worlds. These capabilities can help life science organizations reduce costs, improve efficiency and capacity, and create value in key areas such as:

  • Optimal management of inventories
  • Increased reliability and visibility of products moving across the supply chain
  • Enhanced ability to identify and achieve operational efficiencies
  • Improved product yield
  • Enhanced speed and quality of product innovation and delivery
  • Improved compliance processes and outcomes

Good news: There is low-hanging fruit

Digital supply networks should encompass all components of a supply chain, but implementation can begin without disrupting existing processes. When we work with clients, we begin by helping teams adopt a mindset of “think big, start small, scale fast.” From there, we can take on the transformation in bite-sized chunks. While life sciences tend to lag behind other industries in the adoption of technology, that can create an opportunity for fast movers. Some companies might implement high-investment, high-value transformations that impact long-term revenue. But a competitive advantage can also be achieved with tactical, shorter-term projects that bring more immediate value.

Discrete projects that can increase efficiency and drive down operational costs may be a good place to start. Capabilities that have been proven in other industries include asset and material tracking, predictive maintenance, and inventory visibility and management. Digital supply networks can greatly improve transparency around data, providing full visibility and traceability across the lifecycle of a product through track-and-trace capabilities and lifecycle quality management.

Beyond operational improvements, digital supply networks can be leveraged for quality and compliance. This can require a longer-term investment and implementation, but it can be a powerful way to address these perennial challenges for life sciences organizations. In product manufacturing, digital supply networks can help reduce rework and improve quality through the use of proactive quality sensing and augmented reality for instructions.

These more modest implementations can be part of an overall transformation, or they can be steps along the way to more challenging long-term applications of digital supply networks, such as business strategy and value-based care through personalized medicine. For example, the design and production of customized medical devices or machines through the use of data analytics and 3D printing can help provide customized care to patients at a fraction of the cost and time than ever before.

The first step: Understand your options

For many industries, digitizing the supply chain has already demonstrated significant potential for improving business outcomes. Learn more in our recent publication, The digital edge in life sciences: The business case for digital supply networks, where we focus specifically on opportunities for life sciences organizations to address some of their most pressing challenges through digital transformation.

This blog was first published in A view from the Center: Deloitte's Life Sciences & Health Care Blog

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