The COVID-19 crisis has exposed fundamental weaknesses in the healthcare supply chain, reports Roddy Martin, Chief Digital Transformation Officer at TraceLink
The ongoing COVID-19 crisis has exposed the fragility of the global healthcare system and is shining a critical light on the importance and capabilities of a digital, end-to-end, patient-centric networked supply chain.
Healthcare and pharma’s leaders are on a steep learning curve as their organisations and partners adapt and respond to the evolving crisis. A few things are becoming clear:
The healthcare supply chain has changed forever: COVID-19 is exposing fundamental weaknesses related to issues such as supply and demand visibility, test kit availability, test kit security, healthcare infrastructure capacity and the reliable availability of critical supplies. These gaps highlight the need for urgent transformation before we have any more future possible disruptions.
The supply chain strategy is now the business strategy: Regardless of what businesses were planning as their priorities for 2020, the crisis is resetting business priorities … and supply chain capabilities are at the top of the list.
The chief supply chain officer (CSCO) has emerged as a key member of the business executive leadership team. The supply chain leadership role has expanded well beyond moving products and cutting costs.
Healthcare is transforming to a patient-driven digital supply network: Richer downstream data will enable supply chain efficiency and transparency, allowing patient, market, usage and downstream insight data to be more prominent and, at the same time, orchestrate successful patient outcomes, improve inventory planning and enable higher demand forecast accuracies.
Healthcare and business transformation to a digital operating model is well on its way: Digital success depends on strong top-down cross-functional leadership and teamwork — and clear alignment between internal and external business stakeholders, including the technology teams.
Supply chain leaders and their teams must confront new challenges as the pandemic continues to unfold. This means continually learning and tracking the state of the pandemic as it evolves. The need for leaders to act locally and think globally has never been truer.
Three weaknesses have come to light in the pandemic. These provide the basis for actionable advice on where to start framing a comprehensive response to unexpected future disruptions.
A major deficiency is end-to-end patient-centric collaboration and visibility. Partners across the healthcare network cannot share data to collaborate and be responsive with the larger partner network to responsively meet patient needs.
We know from historic pharma operating models that they relied on safety inventories to meet patient needs because of poor forecast accuracy. Long asynchronous lead times, shortages of critical packaging components and APIs, together with poor forecasting, is no longer a viable operating model for Big Pharma.
These are major drivers of the need for transformation in preparation for personalised medicine and pharma supply chain transformation post-COVID-19.
Leaders must start by changing the pharma supply chain model and reprioritise their traditional supply chain strategy. Think “end-to-end” and analyse from “patient-back to supply.”
In these analyses, the business operating and digital operating models need to consolidate the architecture and eliminate fragmented data silos to enable the connection between end-to-end processes and leverage harmonised data between collaborating partners.
Without clean harmonised data providing clear visibility across the supply chain, it is difficult to orchestrate secure and reliable patient-oriented services across the network. To add complexity, all partners become part of the patient-centric digital platform network, including those partners and countries in the external global healthcare network.
To build transformation momentum, the business must build a guiding coalition of technology and digital transformation experts and together with supply chain leadership, orchestrate investigations into deploying a digital network platform that will support the new healthcare network operating model.
The time has come, as in other industries (such as consumer goods and electronics), to investigate patient and usage data and use those insights in the supply chain together with the right augmented analytics capabilities. This will provide the end-to-end insights needed for a collaborative supply chain and improved performance business operations measured at the customer or patient.
This will enable the fundamental pivot from supply driven pharma to demand-driven pharma.
Patient safety, product security and regulatory compliance are challenged because of the fragmented and disconnected nature of the end-to-end supply chain and its data. Security has become a significant factor as we prepare to globally deploy hundreds of millions, if not billions, of COVID-19 test kits and vaccines in the coming year.
Crisis has always prompted “bad actors to act” and the 2020 pandemic will likely provide an opportunity for new and sophisticated schemes to produce, distribute and divert counterfeit goods and services.
The healthcare system must build in the security, visibility and transparency of digital technologies and serialised products to eliminate and prevent any attempts to game and falsify the system.
As we all hopefully transition to a post-COVID-19 world, we need to reassess supply chain operating models and revitalise our digital supply chain efforts and initiatives.
Our response needs to be elevated, not only to mitigate the effects of the crisis at hand, but also to improve the safety and efficacy of the end-to-end supply chain to serve patients better, orchestrate outcomes both now and during future potential crises.