Mitigating Supply Chain Risk
By Daniel R. Matlis, President, Axendia
A Note from West: West recently asked Daniel R. Matlis, president at Axendia, an industry analyst and strategic consulting firm, to present on industry trends. Mr. Matlis offered compelling information on supply chain issues affecting pharmaceutical and packaging manufacturers across the globe. We are pleased to share this article by Mr. Matlis in Regional News and hope that our customers find it as valuable as we have.
The recent trend toward globalization and outsourcing in the life sciences industry has created both unique opportunities and demanding challenges for industry, their partners and regulators alike. During the past several years, many executives have moved sourcing and manufacturing overseas in an effort to lower costs. In the process, many companies have recognized the potential of these emerging markets for creating and growing their product pipelines and reaching new consumers. With these changes, however, come increasing demands on life-sciences manufacturers to manage and control their supply chains, which are now longer and more complex.
In a presentation at West, Axendia shared the results of its recent primary research on current trends in the life-sciences global supply chain. The study incorporated data from three sources: an advisory council, a survey of industry professionals and individual interviews. When it comes to supply chains, the research points to the need for companies to shift from traditional supplier-buyer to an “on-demand” approach. In this model, collaboration occurs during the entire product life cycle, from raw-material supplier to final product delivery. “Competitors” can be viewed as potential allies with whom information can be shared and leveraged to keep products safe and effective while managing costs. Through visibility, control and collaboration, industry, their partners and regulatory bodies can work together to find practical and cost-effective solutions to ensure the quality, safety and efficacy of products.
On-demand visibility is the ability to access data and product information when you need it even if someone else is managing it. On-demand strategies and systems provide relevant information about the product at the appropriate time to enable decisions with a high degree of confidence based on the analysis of contemporary data. On a day-to-day basis, on-demand visibility enables authorized parties to “spot audit” suppliers by reviewing contemporaneous data and changes potentially impacting product safety, efficacy, and quality. These real-time views into supplier or contract-provider activity can complement periodic on-site audits of facilities. To get this level of visibility, companies should use interfacing internal systems such as ERP and QMS with suppliers’ manufacturing, operation and quality systems, which can provide a complete batch-history record of the products delivered, including critical quality attributes (CQAs) and process parameters (CPPs). These interfaces also allow the sponsor company to take advantage of business intelligence, analytics and planning software to bring together data residing in different systems to control finished good quality and better adjust downstream processes.
Supplier Network Control
Companies that outsource processes or source materials must take the view that their product's life cycle incorporates an entire network, not just a thin chain. This perspective is crucial for total product control and calls for tighter collaboration and increased communication with all parties involved at the earliest stages of the product life cycle. Partners should be assessed on a total risk profile and the potential impact to the process, product and patient. Adequate control often requires deep process and product understanding. Companies should collaborate with their supply network to gain deep understanding of and implementation of systems that provide visibility into process control based on CQAs and CPPs.
To succeed in today’s global environment, collaboration strategies must embrace reasonable and common-sense approaches that can be leveraged by all stakeholders. Increased collaboration requires changing the internal structure of companies to better manage the cross-functional skills and staff assigned to support global supply chains. A balanced team approach is critical to minimize risk, maximize value, and ensure product safety, efficacy and quality.
Better collaboration also means that interactions with suppliers and contract providers need to begin earlier in the process. It means engaging suppliers who are willing to share information in real time. Collaborative approaches such as these can drive reduction of redundant, costly audits; create a transparency of relevant information to ensure product safety; and help to develop measurable scorecards aimed at improving performance and mitigating risks.