@Risk

Life sciences companies today offer more than pharmaceuticals. Many are also selling targeted therapeutics, such as diagnostic tests, monitoring mechanisms, delivery devices, and various support services.

That means supply chains for life science companies are now global, often interconnected, and exceedingly complex.

IBM recently took an in-depth look at the supply chain challenges facing life science companies, and released its findings in the new report, “The Smarter Supply Chain of the Future; Life Sciences Industry Edition.” The analysis summarizes data collected in a survey of executives at pharmaceutical, biotechnology, medical device and consumer health care industry companies who are responsible for planning, logistics, procurement and coordination throughout the life of a drug or medical device.

Here are a few of the key findings contained in the 32-page report:

• More than half of those polled said their companies fail to respond quickly enough to pandemics and other emergencies because of lapses in their supply chain.
• 64% reported rising customer demands such as requests for designer drugs or specialized packaging as a major challenge.
• 75% said monitoring risk to prevent counterfeiting, drug and device recalls, or even the loss of intellectual property are priorities, as margins become slimmer and supply chain complexity rises.
• Three-quarters have risk and performance initiatives such as surveillance programs, anti-tamper devices and specialized labeling, but with mixed results.
• 46% consider vendor-managed inventory for their customers extremely effective, but only 4% use it to ensure they are precisely meeting customer demands for products.
• 65% collaborate with suppliers on demand planning, but only 31% do so with customers, often resulting in an overstock of supplies or missed sales targets.

Both the life sciences industry and the FDA have roles to play in securing the safety of the medical products supply chain.  But, as IBM states in the report, in order to meet today’s challenges, drug manufacturer supply chains need to be more interconnected –and more intelligent. For instance, new sensors and other smart devices (RFID tags, ,e.g.) can help the supply chain respond more efficiently to fluctuating conditions in production and distribution.

“As the industry faces a time of transition, supply chain executives are outsourcing more business processes, turning to emerging markets and becoming more globally integrated, all while actively managing risk,” says Dr. Philippe Cini, IBM Global Business Services, Life Sciences Supply Chain Management Partner. “The companies we spoke with said they are looking to a different kind of supply chain — one that gives the insight to react instantly to risks or threats, is much smarter and able to provide them the insight and agility necessary to compete in a changing marketplace.”

You can download the full report, as well as others in the IBM “Smarter Supply Chain of the Future” series, here.