Supply chain & logistics
Temperature control is one critical area that industry 4.0 technologies are making a difference.
internet-of-things (IoT) devices that track sensitive shipments through to AI that helps route planners predict storms and other obstacles. Considered together with even more esoteric technologies, notably around so-called digital twins, and those spectacular CAGR figures seem even less surprising. Not, of course, that the success of Pharma 4.0 is a foregone conclusion. Whatever the theoretical excitement for technology, it’s less clear how far humans have embraced it. Whether they like it or not, even industry giants are reliant on a tangle of partners, which raises difficulties around how exactly digital insights are shared. That hints at wider challenges too. It risks being lost in the flurry of think pieces and consultancy papers, but technology can’t fix supply chain problems all alone. Rather, success requires careful training, and worker uptake – and ultimately an appreciation that geopolitical complexity involves more than ones and zeros.
“I think technologies make it possible [for there to be] better information
flow...that would facilitate better decision-making among the business and business partners.”
Pulling the chain
Imagine you’re holding a pill between your fingers, for example a small single molecule drug like paracetamol, and you’re about to swallow it down. Pause for a second and reflect on where it came from. The active pharmaceutical ingredient, let’s say a type of bark, could well have come from a place like Puerto Rico, before being formulated in
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the Netherlands. From there, the packaging process could have happened somewhere like Greece, even as secondary packaging occurred in Japan. That packaging, in this case paper, was likely manufactured in China, even as your pill’s reagents were Belgian and its excipients American. Nor do we even need to stick to hypotheticals. Pfizer, for its part, boasts 36 manufacturing sites and 11 logistics centres, altogether employing some 31,000 manufacturing and distribution workers. To put it differently, today’s global pharma supply chain, now a $1tn dollar business, is bewilderingly complex – and with complexity comes inefficiency. Consider, for example, unopened vial wastage, with the National Academies of Sciences, Engineering, and Medicine’s reporting that spoilage in the form of heat exposure or damaged packaging causes $2.8bn of dumped medication each year. Theft is another problem. At the height of the pandemic, for instance, €500,000 worth of goods were stolen from EMEA supply chains every day. With rising regulatory hurdles, and the greater sensitivity of drugs like live cell therapies, it’s no wonder that Hui Zhao, associate professor of supply chain management, Smeal College of Business, Penn State University, should suggest that track and trace has become a “very hot topic” across pharma supply chains. Technology, the supply chain expert says, is absolutely central to these developments: “I think technologies make it possible [for there to be] better information flow – more timely sharing of the data – that would facilitate better decision-making among the business and business partners.” Certainly, it’s a point amply bolstered by external research. As one recent study uncovered, the digital pharma supply
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