June 12, 2017
Time to be bold, but pragmatic
By: Brad Pawlowski

The life sciences supply chain has evolved into a critical, strategic element, making it possible for many companies to reach their growth and competitiveness targets. However, digital disruption is creating a necessary pivot point to transition from the traditional supply chain to digital supply networks. Many factors and specific triggers are influencing this move.

Products and therapies are becoming increasingly complex and specific which drives up costs and lead times. In addition, patient service expectations are rising to the point where delivery models must be more sophisticated. This shift increases the cost of capital and elevates levels of excess and obsolete product. But to properly tackle the extensive change required, life sciences leaders need a new mindset that recognizes the complexity of this new supply chain environment and can boldly embrace the steps necessary to capitalize on the market potential.

Although the shift to a digital supply network may represent a comprehensive change, it is still founded on the same supply chain fundamentals of service, inventory and cost. Digitization makes it possible to converge traditional supply chain elements into true supply networks which are a seamless integration of talent, physical, information and financial supply chains. Digital supply networks leverage cloud-based platforms and control tower set-ups. They connect scale, and ultimately integrate data from several sources, such as consumer devices, multiple points of sale, and internal and external data warehouses.

Although the concept of control towers has been around for years, Accenture views the new approaches to control towers as core to a digital supply network. Companies introducing digital capabilities, such as artificial intelligence, analytics and mobility, can break down the walls of traditional supply chain functions. Demand and supply planning can be combined to focus on true network planning. Customer service and order management can be managed as one function. Deployment and transportation can also be managed as one function. Defining cross-functional metrics such as perfect order and total cost to serve support better behaviors than more traditional, siloed metrics that do not optimize work across functions.

A digital supply network not only represents a new paradigm for the supply chain, revolutionizing the way that companies serve patients and customers, but is also a necessary cost of doing business today. Life sciences companies should focus on more sophisticated technologies but not bolt new technology to an old model, which would realize only a fraction of potential value. New business models focused on patient outcomes mean that supply chain organizations and operating models need to be re-evaluated in addition to the new digital capabilities. After examining their operating models AND high-impact technologies, leaders must embrace the bold moves needed to support the business of today and tomorrow.

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