The ongoing pandemic has created a global shortage of life-saving drugs and supplies, just as social distancing has hampered the life sciences supply chain. Meanwhile, the postponement of nonessential procedures has reduced demand for products such as those used for vaccinations and ophthalmology. How should life sciences companies respond?
These impacts expose weaknesses caused by a reliance on third-party manufacturers and just-in-time (JIT) inventory — without the risk management and resiliency provided by cloud-based visibility and collaboration platforms, and the redundancy provided by a broader base of suppliers.
Long-term success in the post Covid-19 world will require shifting from an extensive reliance on far-flung manufacturing partners as well as prioritizing risk mitigation over cost reduction. Life sciences companies must rethink their supply networks and JIT practices. They must also improve their ability to quickly sense and respond to sudden changes in supply, demand and inventory levels.
Planning for the New Normal
Cloud-based supply chain platforms can help life sciences companies more closely coordinate with these new, more diverse partners, influence which companies to work with and how, and balance efficiency and cost optimization against new priorities (such as the resilience of supply networks and risk management).
Among the changes we suggest are:
- Improve collaboration with and visibility into suppliers, including real-time performance and supply chain capacity data to make informed tactical and operational decisions and to better match supply with demand. This requires agile tools that provide near-real-time visibility, as well as enhanced risk modeling and scenario simulation and data-driven decision making.
- Reassess every link in the supply chain — from demand and inventory to supply, manufacturing and logistics — using a risk and resiliency lens. Understanding the current state of the supply chain is essential to making the best use of assets such as capital investments and manufacturing capacity as conditions change. Revamped supply chain processes should include more risk scenarios, more what-if analyses, and more complete risk responses and business continuity plans.
- Consider re-segmenting product lines and prioritizing limited raw materials and manufacturing capacity based on metrics such as a product’s role in preventing the further spread of disease, its profitability and regulatory requirements.
- Make greater use of automation not only for data-driven decision making, but to implement and monitor safety. This may involve using thermal cameras to monitor employees’ body temperatures, ensure social distancing and confirm that work areas are properly sanitized.
- Increase cloud usage not only for greater scalability and real-time access, but to enable shifts from paper-based to electronic record keeping in order to speed data collection and prevent infection.
- Increase automation across operations from workplace monitoring and tracking to the provisioning of hardened desktops or laptops. Reengineer network and information security to facilitate remote working.
To learn more, please visit our Covid-19 response page or go to our Life Sciences section.