Alessandro de Luca, the Chief Information Officer at Merck Healthcare of the Merck Group, says all the buzz around AI is justified. He’s leading Merck Healthcare’s efforts to build an autonomous, intelligent supply chain.

This year is Merck’s 350th anniversary. At this milestone, what role does digital and technology play for Merck?

ALESSANDRO DE LUCA: We’re at a fantastic moment for the healthcare industry, for life sciences, and at Merck. Several trends are converging. One is the capabilities of digital technology. Now we are gathering information to process data about health in real time that allows us to get a wide understanding of health matters from a broad population. This information will enable the pharma industry to personalize treatment, making it more effective for patients and less costly for society overall.

What is the impact?

ADL: All these phenomena are changing healthcare and the business of healthcare. Patients will benefit from much better and longer lives because medicine, as a whole, will move from a reactive approach (treating the patient once the symptoms have occurred) to a more predictive model (preventing patients from becoming sick). For the healthcare industry, this is the result of all players in the value and information chain becoming more connected. We will have fewer industry silos, such as producers, distributors, pharmacies and doctors. In the end, the patient will certainly benefit. The outlook is extremely positive.

Of course, there will be challenges, such as being able to use the data for improving lives while still ensuring data privacy. But if I put the advantages and the challenges on a balance, I’d say the advantages win out. That’s why I’m so optimistic.

In almost every area, “narrow” artificial intelligence could bring brilliant, technological, advancements to many unsolved issues.

Which technologies will usher in these changes?

ADL: I like to speak of solutions rather than technologies. I do think “narrow” artificial intelligence (NAI), will change everything. It will change the way we learn about the supply chain. And it will change our approach to intelligent marketing, social media listening, R&D and clinical trials. In almost every area, NAI could bring brilliant, technological, advancements to many unsolved issues. This is why I think the buzz around AI is absolutely justified.

When you speak in public, you talk about self-driving supply chains enabled through AI. What is your vision here?

ADL: I like to explain it by comparing a self-driving supply chain to a self-driving car. In the automotive industry, the move from traditional cars to self-driving cars has created a whole different concept of mobility. The same goes for supply chain and manufacturing. By using AI-based solutions, companies can continuously balance customer demand (e.g. orders) with supply and manufacturing.

In the past, we normally relied upon human experience combined with sophisticated planning tools to make the supply-demand balance work. Now, intelligent systems will define how much should be produced and how much should be in inventory, based on efficient demand prediction systems that use Machine Learning/Reinforcement Learning techniques. In other words, AI-based solutions will balance supply and demand autonomously.

How far away is Merck from having a self-driving supply chain?

ADL: We’ve already achieved descriptive and predictive capabilities and use these in our daily work. Several prescriptive pilots are underway, whereas the fourth and last phase (truly self-driving) is still in discovery phase. I’d say we’ve gone 75 percent of the way. Some companies in the fast-moving consumer goods (FMCG) area are more advanced than we are, but we’re definitely a leader in healthcare.

What is holding back this last step?

ADL: We are facing some minor technological hurdles. I think we’ll overcome them in the next months. I wouldn’t even say years, I’d say months. We need to iron out some technical specifications to get the system working in real-time. But the biggest challenge will remain in the human factor: change management. Just like with self-driving cars, we need new processes, new regulations and people with different skillsets to adjust to this completely new technology. Similarly, for the supply chain, people have to learn to trust and let the system handle real time demand forecasting and continuous supply planning and replenishment. That’s the biggest challenge to overcome.

What kind of fears does this raise?

ADL: We are all concerned when decisions are made autonomously by an intelligent system. In the end, though, as a society and/or industry, we will have to decide how and when to shift decision processes from a human to a machine in a safe, ethical and responsible way. Another point is how to protect against cyberattacks. That’s why I said we’re in a fantastic moment of technological progress, but there are still challenges to overcome.

You’ve said self-driving supply chains will have a similar impact as blockchain? What do you mean?

ADL: Blockchain is changing how transactions are made across industries; self-driving supply chains will change the way supply chains are managed and goods are manufactured. Both are extremely revolutionary to say the least. Of course, the devil is in the detail. We still have to see how practical applications really work.

In what ways do different members of the healthcare ecosystem need to cooperate?

ADL: Because technology is advancing so fast, we need to make sure that members of the industry do not make decisions in isolation. Companies need to discuss potential changes with others, no matter which niche they’re in. We need to be faster in understanding the implications of new technologies and aligning with regulators on that. Industry consortiums will continue to play a big role in understanding how we as an industry can use technology in the best way.

Anything you’d like to add?

ADL: I’m truly excited by the idea that we may soon be able to help more and more individuals in preventing potential health problems rather that “just” treating them after the fact. This is how the Healthcare of the future should look like by making use of technology advancements, including NAI, we can help people have a better and healthier life.

Alessandro de Luca

Chief Information Officer

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