It’s more than welcome news for a pandemic-weary world as some life sciences companies are now moving from R&D, clinical trials and approvals to an increased focused on delivering their vaccines.
In fairness, it’s actually been a multi-front effort: conducting clinical trials in a world where participants were often quarantined; ensuring adherence to the strictest scientific and regulatory requirements so new treatments are safe; and forward-planning for getting vaccines distributed.
For the typical person whose life since spring 2020 has been disrupted by quarantines, social distancing, mask-wearing, and perhaps even economic hardship, it’s the last step that matters most: getting that vaccination to my healthcare provider so I can get “the shot” and get my life back to normal.
From a business standpoint, it’s a supply chain management issue—perhaps the supply chain management challenge of our times. In particular, it means focusing on creating a seamless and agile supply chain while also managing something the past nine months have shown us we all need to improve—how we manage risk.
Based on our work with several major healthcare providers in 2020, here’s what we see as the most important steps to building agile supply chains that can achieve these companies’ number one goal: getting lifesaving vaccines to billions of people faster and more efficiently than ever before in medical history.
Building Seamless and Agile Supply Chains
Like many sectors, pharmaceutical supply chains’ resilience was severely put to the test in 2020. Overall, they withstood the shocks fairly well, including maintaining business-as-usual despite multiple disruptions. At the same time, they’ve also ramped up supply chains for potential COVID-19 vaccines, preparing for essentially a new business line whose scale will be enormous.
Based on our experience, several areas were keys for success:
- Driving inventory optimization, SKU rationalization and inventory segmentation
- Enabling contract manufacturing to achieve greater production and manufacturing scale
- Developing optimized logistics and distribution networks
- Enabling efficiency-improving digital technologies including serialization, track-and-trace and predictive analytics tools.
- Creating and maintaining supply chain ecosystems
- Ensuring supplier performance, diversity and risk management
While the goal always remains aligning the supply chain with the company’s business objectives and needs, we know there are plenty of intermediate steps to get there. This includes “stop the bleeding” measures now, followed later by operational support to promote business-as-usual and to globally scale successful end-to-end solutions that can be measured.“
RGP is already working with several major players to create network modeling projects, providing staff augmentation as well as product services support for vaccine distribution in North America and other regions, including the final-mile delivery of vaccines in Africa.
We’re also partnering with leading pharmaceutical companies to provide integral subject matter expertise in support of clinical trials and go-to-market commercialization strategy for vaccine release.
Unlike most solutions, the underlying justification was not the drive for “commercial success,” but rather an ethical and business-conscious decision to improve speed-to-solution. Agile thinking and processes were key to helping build those enhanced supply chains with our clients. Now the trick is putting that learning to use by getting vaccines into arms—lots of them.
Improving Risk Mitigation
Risk has always been there but 2020 abused the privilege.
When the global economy came to a standstill thanks to worldwide lockdowns, so too did global supply chains.
All the usual assumptions regarding risk management (bad weather, transportation delays, supplier issues, human error, etc.) were far too narrowly defined or geographically isolated for this new status quo.
Practically everything had to be recalculated, because the pandemic impacted practically everything, from companies sourcing materials to consumers buying finished products. The numbers over the past few months confirm this sobering truth:
- 80% faced product losses due to obsolescence with disrupted distribution channels.
- 75% faced a disruptive event or crisis in third-party failures as well as distribution problems.
- 73% faced supplier-based problems.
No wonder an equally impressive set of stats is also emerging when it comes to companies managing risk:
- 93% of companies are today reinvesting in supply chain risk management improvements.
- 80% of companies plan to invest in track-and-trace capabilities and say that real-time data sharing is critical to managing supply chain risk.
- 25% reduction in logistics cost is seen when companies have a comprehensive SCRM program.
Key among those initiatives include:
- Renewing strategic sourcing
- Sales and operations planning (S&OP) and sales, inventory and operations planning (SIOP)
- Improving network optimization so companies have a more end-to-end view of the entire process
In working with a number of clients on supply chain operational excellence through initiatives such as SKU rationalization, track-and-trace, asset management and cost-to-serve, we’ve already netted clients $9.2M in cost savings and improved operational efficiency by 15%.
These are just a few such solutions. Many more can help reduce risk and uncertainty while also increasing transparency and predictability. And if 2020 is our benchmark, the agile changes happening right now will likely mean long-term future benefits for not just for vaccine supply chains but also supply chains for other products, businesses and sectors.
Finally, the welcome news that there are several COVID-19 vaccines—with more likely on the way—may signal the beginning of the end of this deadly pandemic. But a new chapter is also now being written. The last mile challenge: how to get those new vaccines to billions of people.
We all want “normal” again. And if there’s one goal billions of people can agree on—it’s that.
Improved supply chains can play a leading role in making it happen.
Learn more about RGP’s supply chain and operational excellence solutions as well as healthcare capabilities for your business.