The vital importance of robust supply chains and distribution networks has been foregrounded over the past year as the world struggled to ensure supply of PPE, medicines, diagnostics, and vaccines to fight the COVID-19 pandemic. With logistics and distribution now at the forefront of the global pharma conversation, key players in the field have recently spoken to PharmaBoardroom about how the operations – and positioning – of their industry might change post-pandemic.
From Service Suppliers to Important Partners
Eric ten Kate, VP for Global Life Science at Agility, on the ways in which the pandemic may prove transformative for Agility’s business model.
I hope the healthcare sector starts seeing logistics players as important partners rather than mere service suppliers. The closer we can be, the better the services and solutions we can deliver
“The Internet of Things will definitely be transformative for us. I think it is very clear that visibility is key, and we need to plan to ensure visibility. Agility has always been at the forefront of technology. In a way, we are an IT company that does logistics. You order from Amazon and you can see exactly when and where your products are and when they were delivered. I think we should have that same visibility and service from 3PLs. We want to incorporate blockchain solutions as well. For instance, some COVID vaccines require two doses. Companies, governments, and patients need to be able to track when someone has taken the first dose and when they would need the second dose. And we all need to be confident that the data is current, accurate, secure and can’t be tampered with. Blockchain gives us that ability.
“Pharma companies are already investing in technology for serialization and other track-and-trace solutions, but so far everyone seems to be working in silos. There is a lot of potential if we can work together to establish the industry standards that will strengthen the supply chain. This could also provide more visibility into costs, which is also important to pharma companies, especially generic companies.
“I also hope the healthcare sector starts seeing logistics players as important partners rather than mere service suppliers. The closer we can be, the better the services and solutions we can deliver. We try to understand our clients’ products and needs as much as possible, but it is always easier if we are brought in from the start to work on the project together. For instance, we had a discussion with a vaccine producer yesterday. The producer needed everything shipped from the same suppliers because of US FDA regulations. They decided to hand the entire project to us to coordinate, and that is going to allow us to save them a lot of time and trouble and make things more efficient. A lot of pharma companies start as biotechs or R&D-focused entities, so they do not really have strong supply chain capabilities.
“In addition, I do see a trend towards regionalizing supply chains. Today, supply chains are very globalized. For pharma raw materials, for instance, the world is heavily dependent on China and India. But companies and even governments are starting to think about regionalizing their sourcing, manufacturing and supply chain.”
Building More Resilient Supply Chains: A Public-Private Effort
The COVID-19 pandemic has compelled many governments and other institutions to reevaluate their approaches to previously underfunded pandemic preparedness efforts. Larry St Onge, DHL’s president for Life Sciences and Healthcare looks at how DHL can support these types of strategic planning initiatives at the governmental and institutional levels.
What is absolutely imperative for all of us is the need to build a collaborative public-private framework that can drive a focus on the creation of a more resilient supply chain globally. We need more data tools to be able to map, manage and retain visibility of the flows of products
“We have published a White Paper on ‘Delivering Pandemic resilience’ in September, where we highlighted some key points and opportunities for the world to prepare for a better healthcare supply chain in the event of another pandemic and also regarding how public and private sectors can partner for success in the delivery of COVID-19 vaccines.
“What is absolutely imperative for all of us is the need to build a collaborative public-private framework that can drive a focus on the creation of a more resilient supply chain globally. We need more data tools to be able to map, manage and retain visibility of the flows of products. This might come in the form of a blockchain-enabled platform, for instance. Ultimately, the goal is to connect the supply chain all the way from labs to patients, so as to speak.
“We also see an important opportunity for the private sector to be of value to the public sector here. Governments have found themselves quite challenged and stretched at various moments during the pandemic, and this is a result of them lacking the ‘intellectual sweat equity’, as I would call it, when it comes to understanding and dealing with the stringent requirements and standards of the life sciences and healthcare industries. We are talking about critical aspects like Good Distribution Practice, Good Manufacturing Practice, compliance, and so on, that are incredibly complex.
“But DHL has invested heavily in solutions for all types of medical supplies and products, including high-value drugs, cold chain capabilities, and so on, so we can provide that expertise and that knowhow to public institutions and government entities. Right now, the focus is on deploying the COVID-19 vaccines and hopefully the world will return to some semblance of normalcy by the second half of next year, but beyond that, we need to keep pushing and rebuild a stronger global supply chain infrastructure for the world.”
Digitalisation: Crucial for Future Competitiveness
Joe Lewis, Deloitte’s managing director for its Life Sciences Supply Chain Practice outlines the key aspects in digital transformation that pharma logistics companies should be aware of.
We are seeing clients pursuing digital transformation across multiple fronts. You can say it is the right step to take but you can also say it is the only logical step to take in order to stay competitive
“We are seeing clients pursuing digital transformation across multiple fronts. You can say it is the right step to take but you can also say it is the only logical step to take in order to stay competitive.
“We are helping companies improve their visibility of their upstream and downstream suppliers and contractors. We are helping clients identify and then prioritize leading-edge technical capabilities that enable them to move product through to market with higher efficiency and less waste, and waste can be product, carbon emissions, and anything that costs a business.
“We are helping clients shift their workforces away from more manual and labor-intensive processes, leverage the digital capabilities that exist to drive decision-making for the business, and move away from operations that do not add value.
“Where Deloitte is really stepping in is to help clients not just define their future in this digital state but also helping them execute that vision pragmatically. We excel in that space. Many of our clients have what I consider a mature vision of where they want to be, and they just need help with organizing and driving alignment around that vision. Other clients do need a thought partner and an external organization that can challenge their thinking and bring new ideas to them.
“In terms of digital transformation, a really important question clients are asking is, do I need to own and operate that specific capability internally or can I rely on an external partner? Increasingly, the client answer is, no, so that is an area where Deloitte is increasingly stepping in in order to provide these requested services.”
Ching Kiat LIM, managing director for Airhub Development at Changi Airport Group highlights how the pandemic has increased the urgency with which the airport has had to push digital initiatives through.
Digitalisation plans and initiatives have been in place for a long time, but the COVID-19 environment gave us even more urgency to push them through
“Digitalisation plans and initiatives have been in place for a long time, but the COVID-19 environment gave us even more urgency to push them through.
“On the passenger side, at the outset of the pandemic we realised how sensitive people were about cleanliness and touching equipment. Therefore, we quickly converted all the passenger-facing technology to minimise this. We converted our check-in kiosks from a button-based system to a contactless one and switched the thumbprint-based border control measures for facial recognition. Today, the entire check-in and boarding process at Changi Airport can be done without any contact.
“On the cargo side, things are a little more complicated with a network of third-party providers in charge of different parts of the process, some of which are more mature in their digital journey and some not. This has been an area in which we have long been aware of a need for improvement, even pre-COVID.
“With our community, we have embarked on a digitalisation effort in cargo, for example rolling out a truck dock slot booking platform. This is a digital portal for slots booking and management, to even out cargo lodgement and collection at our cargo handler’s airfreight terminals. We believe it will reduce the waiting time and smoothen the facilitation for cargo pick-up and delivery, providing greater insights into booking and freight details. It will also improve resource optimisation for both the truckers and cargo handlers and at the same time, reduce CO2 emissions, which promotes environmental sustainability with less truck waiting.”
A New Era of Customer Service
Leonora Lim, DHL’s Asia-Pacific VP for Life Sciences and Healthcare, Customer Solutions & Innovation, examines the long-lasting changes from the pandemic on how supply chains operate.
We are beginning to see customers looking for a more direct approach. Instead of going through hubs or middlemen, there is an uptake of interest in areas like e-commerce
“From the customers that I have talked to, I do not think we will ever go back to the way we were before. The pandemic coincided with the beginning of a long conversation we had undertaken about changes in the way we work.
“Generally, one of the key supply chain topics that came up was nearshoring since companies are beginning to look at how they can bring their suppliers closer instead of sourcing from multiple suppliers in different parts of the world, far away from where the manufacturing is. For the pharma and medical device industries, from my experience, a lot of the products are made in the US and Europe and then imported into APAC.
“Another trend that has come up during the pandemic is the way we service our customers. In DHL’s healthcare and life sciences division, the patient is at the very heart of what we do. We do not just move products from point A to point B. We must ensure that patients receive therapies at the right quality, under the right conditions, and we are beginning to see customers looking for a more direct approach. Instead of going through hubs or middlemen, there is an uptake of interest in areas like e-commerce. We will have to attune ourselves because we were used to shipping in bulk and B2B.”