Different government and pharma authorities have introduced a series of regulations to reduce counterfeiting by ensuring integrity of products across the value chain. These wide-ranging regulations include assigning unique identification numbers to each saleable product, or what is called 'serialisation'.
As of 2013, the Drug Supply Chain Security Act (DSCSA) has been mandated to drill down to the lowest granularity; specifying the date and time of manufacturing of each SKU (stockkeeping unit), making it fully traceable. The objective of serialisation is to prevent counterfeiting, account for the movement of products and to reduce reimbursement fraud.
However, serialisation can unlock a much higher value by utilising the data streams being generated as a result. Business leaders can leverage the following use cases with low implementation complexity and high value potential for an immediate impact:
1. Transparent supply chains to achieve higher inventory optimisation
A serialisation infrastructure, along with analytical techniques like forecasting with Electronic Product Code Information System (EPCIS), automation, inventory management etc., can help provide meaningful insights using real-time data to support monitoring, optimise inventory levels, shorten replenishment lead times and avoid stockouts. Machine learning-enabled systems can automatically predict order quantities and service levels as per historic demands of certain medications and seasonal trends. Implementing order management systems that "learn" to automatically identify risks or exceptions will enable both on-time supply and optimal quantity distributions.
2. Improvement in Sales and Operations Planning (S&OP)
Increased supply chain visibility as a result of serialisation can drive an effective S&OP process for pharma companies. The real-time information flow can be leveraged to run sophisticated algorithms to optimise network design and hence reduce transportation and logistics costs. Access to serialisation data can help develop least cost scenarios for transporting drugs across pharma supply chains, including inbound logistics, manufacturing, warehousing, outbound logistics, safety conditions, in-transit inventory, deviations etc. Access to real-time data will help supply chain managers reduce cost.
3. Improved product recalls
Pharma companies need to undertake rigorous recalls to remove affected products from the market. Post serialisation, the producer can use the sales and distribution data of the impacted drug at the store level to tightly control recall exercises.
For example, InfoSphere Traceability Server provides customised solutions by using data generated from track-and-trace operations. It has a 'Shelf life and temperature tracking and tracing' feature, which uses predictive analytics to tell the manufacturer if a portion of a lot had been stored at a temperature that compromised the chemical composition of the drug; simultaneously, a recall could be issued for only the affected items.
4. Reduce deviations to safety measures
Serialisation implementation will require new labelling, which will impact packaging process including adhering labels, scanning bundles, cases and pallets to allow for robust tracking. The supply chain data received on storage and transportation conditions of the drugs can be used to track deviations from optimum storage conditions. For exmample, 'StaTwig' is a tool that tracks frequent temperature fluctuations across the pharma supply chain to identify key reasons for spoilage. The sensors used also provide the exact time where the variation takes place. We can leverage IoT and big data technologies to not only ensure safe delivery of medicines but to also generate packaging insights (including requirements of add-ons such as lining and material used).
There is a strong business case for making investments in serialisation, which can easily be offset by the additional value generated from the harmonised supply chain and pharma data ecosystem. With improvement in capabilities to convert data into insights, it becomes critical for firms to manage their data more effectively to outpace the competition.
The author is Director of A.T. Kearney.
The thoughts and opinions shared here are of the author.
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