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Moving from life sciences supply chains to patient-centric value networks

In contrast to a traditional life sciences supply chain, how does a patient-centric value network operate?

Overview


The traditional life sciences chain can’t keep up with the challenges and opportunities of the industry. Many companies are confronting expired patents and less profitable product extensions. Mergers, acquisition and divestitures occur with great frequency. Patient needs are changing and new therapies, devices and products are emerging. Costs and inventory levels are up; so are regulatory controls. Competition has increased, as has the pressure to expand into emerging markets. On the pharma side of the house, it’s not the same old, small-molecule kind of chemically based industry anymore. Patient therapies have grown increasingly complex, involving a convergence between products and services and between different players within the healthcare value chain. Patient-centric therapies and personalized medicine are on the rise. New technologies are enabling rapid advancements in medical devices.

This means that the traditional supply chain model must evolve. A dynamic, sense-and-respond market and patient-centric supply chain is now needed as a core prioritized strategic capability. Rather than focusing on the traditional product “push” of supply, life sciences companies must focus on the “pull” of the needs and wants of patients and healthcare providers. The traditional linear model of a supply chain in life sciences companies today must transform to enable a “value network”—a set of chains that is patient-centric, dynamic and responsive to market demands.

Key Findings

Life sciences companies looking to implement a patient-centric value network should focus on several key factors and activities:

Look for and translate the insights that improve patient outcomes
Effectively designing and deploying a patient-centric value network begins with an analysis of the insights and data required to understand the demand characteristics of each product and segment. Supply chain leaders invest wisely in the collection of critical data, and integration with partners, suppliers and customers to share plans and information that allows everyone across the end-to-end system to collaborate and plan more effectively.

Establish supply strategies to ensure predictable, compliant and secure supply when and where the patients need it
Supply strategies must be evaluated in the context of demand and market trends to ensure that the right capabilities are built in the product supply network that ensure reliable and compliant supply of materials from the manufacturing and operations process.

Put in place a cloud-based control tower to enable end-to-end visibility and analytics across the value network and ensure that products and services are efficiently delivered to the patient
To compete, companies must start moving away from their traditional IT system and data silo integration and architecture approach to a cross-enterprise, process-oriented digitized value network.

31% of our survey respondents noted that a limited ability to translate data into business insights was a major obstacle to implementing an effective supply chain strategy.

Recommendations

Building a patient-centric value network requires thinking about a set of factors and enablers that differ from those in traditional supply chain planning and execution:

  • Connecting market insights and patient outcomes back to commercial and financial processes.

  • Connecting commercial and financial processes through integrated business planning, into the supply planning network including contract manufacturers, suppliers and contrast research.

  • Planning for digitization and for the Internet of Things, where many devices, processes and assets can be connected into the digital value network for analytics purposes.

  • Upgrading skills, talent and organization structure based on the state of process maturity of the evolving, end-to-end supply chain.

  • Managing the significant organizational changes involved to ensure take-up of new processes and new ways of working.


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