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The Supply Chain of the Future

A LogiPharma Report

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01 The Supply Chain of the Future
A LogiPharma Report


LogiPharma is without doubt the number one
industry supply chain conference in Europe.
The combination of high-quality presentations
and opportunities to network with peers from
other companies makes it unique.

Arie Moruanx, Global Surgery Planning Excellence Director

Contents
Introduction 02
Getting ahead of the game in supply chain 03
United Cargo 04
OM Movianto 05
Part 1: Challenges and Opportunities 06
Part 2: Investments and Actions 12
Part 3: Supply Chain Visibility 18
About E2open 22
About OM Movianto 22
About United Cargo TempControl 22
About WBR Digital 22
The Supply Chain of the Future
A LogiPharma Report 02

Introduction
Now, perhaps more than ever, Supply Chain is at the very heart of success for the
world’s most important pharmaceutical companies.

As a result the hunt is on for innovative ways to transform the supply chain to
enable on-time delivery in the most cost-efficient manner possible. Although this
may seem a modest proposal, it presents significant challenges.

From rapid shifts in supply and demand, to impending regulatory changes,


disruptive technologies and, of course, the need to maintain supply chain integrity,
there are plenty of stress-factors to be aware of – and solutions to be found.

In advance of the LogiPharma 2017 conference, we wanted to investigate some


of the issues which are driving transformation in the pharmaceutical supply
chain today.

We approached 100 senior decision makers in the industry, with job titles like Vice
President of Supply Chain Management, Global Head of Supply Chain, Director
of SCM & Procurement, as well as others of a similar standing to compile this
research report.

The results of our research have been aggregated, anonymised and are presented
here to give you an insight into how your peers are responding to these challenges.

Additional contributors

Patrick Lemoine Mark James Mary Tussing


Vice President Vice President Manager
Product Marketing OM Movianto Global Business
E2open Europe Development
United
TempControl
03 The Supply Chain of the Future
A LogiPharma Report

Getting ahead of the game in supply chain


Patrick Lemoine, VP Product Marketing, E2open

The pharmaceutical industry recognizing that this new setup When companies deploy such
has been one of the best- requires advanced solutions. approaches, the benefits are
performing industries of the past substantial:
decades with pharma companies Leading pharma companies are,
excelling at many disciplines to a large extent, leveraging the l Up-to-date, supply chain
– research and development, experience of other industries visibility – “one version of the
manufacturing, sales and while taking into account the truth” shared across all
marketing – while maintaining specifics of the pharma industry. partners of the extended
the highest safety and quality The new approach is to run such supply chain
standards. Today the pharma a multi-enterprise supply chain
l Full quality control of CMOs
industry is going through major through a supply chain operating
changes: the rise of generics network such as that provided l as required for traceability
and the resulting competitive by E2open. The foundation is a and serialization
intensity, an ever-growing business network that connects
product portfolio, demanding all partners in real-time for l Higher on-shelf availability,
customers and retailers, and true end-to-end visibility and generally with lower inventories
new regulatory requirements. collaboration. Such a network
also allows companies to have l Through smarter channel
The supply chain function has a deep visibility into the operations allocations, better margins
key role to play to help address of their contract manufacturers and also ultimately higher
the new challenges. In particular, to capture quality as well as batch market share
increasingly global and information – so companies can
outsourced supply chains bring trace quality issues even if they The early adopters in the pharma
additional complexity and many outsource production. Once this industry are already capturing
pharma companies struggle platform is in place, dedicated these benefits, putting themselves
to run increasingly “virtual” supply chain solutions provide the ahead of their peers.
supply chains. Today’s virtual required insights and decision-
supply chains require a much support to supply chain teams.
higher degree of coordination
and alignment across all supply A key area that has emerged
chain partners and activities. is the importance of better
Achieving better supply chain managing the downstream part
visibility and collaboration across of the supply chain, where new
the entire supply chain is not technologies like demand sensing
something ERP systems or – first adopted by consumer goods
traditional business applications companies – can dramatically
can solve because they only focus help pharmaceutical companies
on what’s happening inside a increase their on-shelf availability,
company’s four walls. As a result, in hospitals or at retail locations.
pharmaceutical companies are
SM

right time,
friendly
right temp
©2017 United Airlines, Inc. All rights reserved.

TempControl’s specialized processes


safeguard your valuable pharmaceutical
shipments from start to finish.

unitedcargo.com
05 The Supply Chain of the Future
A LogiPharma Report

Healthcare Dedicated Solutions


Over recent years there has for the pharmaceutical industry OM Movianto’s international
been significant polarization and has the capability to clients benefit from a pan-
of pharmaceutical products handle the most demanding European network, a broad range
requiring increasingly complex of specialised product order of healthcare logistics services,
and flexible supply chain management, storage, handling the know-how of the local
solutions. From basic regulatory and distribution requirements. markets and uncompromising
compliance and temperature quality standards like ISO 9001
control through to special OM Movianto is part of US-based and ISO 13485. The company has
handling, monitoring and security O&M Inc., headquartered in expanded rapidly over the last few
arrangements for sensitive and Richmond, Virginia. With a diverse years. More than 1,900 teammates
specialised products together product and service offering, are managing over 275,000 pallet
with diverse final mile distribution O&M Inc. serves hospitals, locations spread over a network of
requirements, the pharmaceutical integrated healthcare systems, 20 wholly owned warehouses in 11
industry faces increasing supply group purchasing organisations, European countries.
chain challenges. healthcare supplies and the
federal government. Today OM Movianto operates
As a healthcare dedicated in three regions in Europe
solution provider OM Movianto OM Movianto is dedicated to being with capabilities in: West
offers strategic supply chain the preferred European healthcare (United Kingdom and Eire),
management to overcome these solutions partner with best-in-class North (Belgium, Netherlands,
hurdles with best- in-class quality for the pharmaceutical, Germany, Switzerland, Denmark,
logistic solutions, adhering biotech, medical device and Nordics, Poland, Czech Republic
to highest quality standards, diagnostic industries. We offer and Slovakia), and South
in excess of basic GDP and outsourcing services along the (France, Spain).
GMP regulation, designed to supply chain such as warehousing,
maintain the brand promise transportation, active temperature
of the manufacturer to their control logistics as well as Value
customer or patient. OM Added Services; order to cash
Movianto continues to position and sourcing.
itself as an essential partner
Part One:
Challenges and Opportunities
07 The Supply Chain of the Future
A LogiPharma Report

Supply Chain eyes Asia Pac for market access capability


Which region do you think provides supply chain with the greatest opportunity to influence the
market access capability of your company?

16%
Latin/South America

15%
16 %
Russia & CIS
Rest of Asia

18%
Eastern Europe

3 % 25%
Asia Pacific
Middle East &
North Africa
7%
Africa
The Supply Chain of the Future
A LogiPharma Report 08

Increasing forecast accuracy is a “


major challenge Mastering the
What are the biggest challenges you face today? distribution side of
the business remains
Innovating the distribution
channel strategy to remain a top priority for
competitive

23% 20% 30% 21% 6% pharma companies,


reflecting the focus
Increasing forecast accuracy of achieving high
23% 39% 31% 6% 1% product availability at
a reasonable cost.
Increasing performance
of new product introductions Also related is the
20% 21% 40% 17% 2% importance of
Managing the supply chain
improving the forecast
following a merger or
acquisition accuracy, a key driver
18% 39% 27% 13% 3% in increasing service
Balancing cost management levels. “
versus providing excellent
customer service Patrick Lemoine
Vice President, Product Marketing, E2open
12% 26% 41% 17% 4%
Improving quality and trace-
ability across your entire
network

12% 43% 29% 11% 5%


Managing the supply chain
for a rapidly changing
portfolio

10% 28% 44% 17% 1%

1 2 3 4 5
09 The Supply Chain of the Future
A LogiPharma Report

“ More than 50% have launched direct-


Direct to patient to-patient distribution channels, or
distribution channels are set to launch them in the next year
have the probability of How far along is your company in implementing direct-to-
patient distribution channels?
increasing complexity
in the supply chain
and therefore also 32%
We will be implementing it in
the next 1-3 years
increasing costs.
Working with
healthcare specialist
logistics experts 5%
We are actively discussing it
but there are no plans to
can improve the implement just yet

understanding of the
trade-offs between
26%
different models Fully operational – we have
been distributing by direct-

and options, and to-patient channels for


over a year

can ensure your


distribution channels
deliver on your
objectives. 37%
Deployed – we started distribution
“ in the last 12 months
Mark James
Vice President, OM Movianto Europe
The Supply Chain of the Future
A LogiPharma Report 10

Supply chains operating from “


the cloud Not surprisingly,
To what extent is your company driving change in the supply cloud computing
chain using these technological innovations?
in the supply chain
function is already a
Cloud Computing
fact for the majority of
0% 1% 3% 39% 57% pharma companies.
They are attracted by
Supply Chain Data Analytics the IT cost savings
0% 1% 22% 39% 38% but also highly value
the rapid deployment
and therefore faster
Customer Data Analytics
innovation that cloud
1% 2% 33% 41% 23% solutions enable. “
Patrick Lemoine
Vice President, Product Marketing, E2open
Digital Technology
(e.g. mobile apps)

0% 22% 40% 30% 8%

No plans to implement

Maybe in future, but not now

We’re actively discussing it

We’re in the process of implementing it

It’s already working for us


11 The Supply Chain of the Future
A LogiPharma Report

“ Supply Chain set to have a much


Supply chain greater impact on the bottom line
management Which one of the following changes is the most likely to occur
in 10 years’ time?
continues to be seen
as a key driver of
the bottom line –
increasingly so. It is 30%
Direct to hospital and pharmacy distribution
a reflection of the will be significantly more common

need for pharma


companies to excel at
the operational side
3%
Supply chains will be
far more segmented
of the business. and specialized according
to product

Patrick Lemoine
Vice President, Product Marketing, E2open

25%
Supply chain will have a
much greater influence
on market access

42%
Supply chain will have a much
more significant impact on the
bottom line of the company
Part Two:
Investments and Actions
13 The Supply Chain of the Future
A LogiPharma Report

“ Building better supply chains should


Collaboration should be a collaborative activity
not just be with other Do you think your company should collaborate with others to
achieve a more effective supply chain?
pharma companies.
Specialist healthcare
logistics providers 33%
Possibly, but it depends on the situation
can bring industry
wide expertise and
knowledge on to how
to make your supply 3%
No – supply chain should
chain more effective. “ be used to differentiate
from competitors
Mark James
Vice President, OM Movianto Europe

64%
Yes absolutely – it’s important
to work with other pharma
companies to develop a more
effective supply chain
The Supply Chain of the Future
A LogiPharma Report 14

Streamlining the transportation service “


provider roster is a major priority The consensus
What do you think the number one investment priority for around the most
meeting GDP guidelines should be?
important investment
priority for meeting
GDP guidelines
15%
Investing in active solutions remains fragmented,
with the top spot
3%
Investing in
this year moving to
passive solutions consolidating/finding
new transportation
service providers.
15%

Patrick Lemoine
Risk assessing and adapting Vice President, Product Marketing, E2open
transportation routes

40%
Consolidating or finding
new transportation
service providers

27%
Reassessing and changing strategy
for freight – sea vs. air. vs. truck vs. rail
15 The Supply Chain of the Future
A LogiPharma Report

“ Digitalization is a major priority for


There is a significant Supply Chain
need and shift in the Is ‘digitalization’ a priority for you?
market to quicker
speed of business
through mobile apps. 10%
No – mobile apps & devices will not
As a result of this, be used in supply chain – data analytics
could be important though

mobile apps are


set to become an
important feature
14%
Yes very much so - the digital
patient, wearables, smart
for transportation packaging and the smart pill,
mobile apps & devices and data
providers who seek analytics will be impacting pharma
supply chain imminently, if not
right now
to better serve their
customers. “
Mary Tussing
Manager, Global Business Development,
United TempControl

39%
Yes – mobile apps & devices,
data analytics are all extremely
important to the supply chain

37%
Yes, somewhat – data analytics and
an information-enriched end-to-end
supply chain is important
The Supply Chain of the Future
A LogiPharma Report 16

The IoT and Industry 4.0 expected to “


shake things up in the next 10 years Industry 4.0 and the
Which of these disruptive technologies will have the biggest Internet of Things are
impact on supply chain over the next 5 years?
technologies that
have immediate
2.07 applications in the
3D Printing
supply chain space
and are therefore
seen as key disrupting
2.92
Artificial Intelligence
technologies. It is
interesting to note
that blockchain is also
seen as important,
2.99
Wearables, mobile apps for patients
& care professionals
more than big data. “
Patrick Lemoine
Vice President, Product Marketing, E2open

4.19
Big Data

4.29
Blockchain Technology

4.54
Industry 4.0 and the Internet of Things
17 The Supply Chain of the Future
A LogiPharma Report

“ Only a quarter are ready to comply


With respect to with the EU’s Falsified Medicines
the serialization Directive
requirements, How prepared is your company for the global serialization
requirements outlined in the EU Falsified Medicines Directive?
companies have made
significant progress
but only one out of 15%
Not very prepared, it would be good
to find out how other companies are
four is ready today. managing this

One complication is
how to get quality
and traceability data
26%
Very prepared – we have
all of our processes and
when part of the technologies in place

manufacturing is
outsourced. This is
why companies have
turned to E2open
to gain visibility into
their CMO.

Patrick Lemoine
Vice President, Product Marketing, E2open

59%
Somewhat prepared, but we are still
developing our processes and technologies
Part Three:
Supply Chain Visibility
19 The Supply Chain of the Future
A LogiPharma Report

“ Supply chain visibility is very good for


Supply chain visibility half of respondents
is no longer a vision, How would you rate your visibility across your entire
supply network?
it is a fact for a
majority of pharma
companies today. “ 14%
Patrick Lemoine
Vice President, Product Marketing, E2open
Excellent

49%
Very Good

29%
Good

8%
Fair

0%
Poor
The Supply Chain of the Future
A LogiPharma Report 20

Visibility is broadly good, but is better “


downstream than up Downstream visibility
To what degree do you have visibility into the following tiers of to the DCs and all the
your supply chain?
way to the customers
(Please indicate the degree from 0 = none to 4 = clear view)
is the area in supply
chain visibility that
Raw material / API suppliers
still somewhat
0% 3% 27% 48% 22% challenging. “
Patrick Lemoine
Vice President, Product Marketing, E2open

CMOs / Packaging

0% 6% 18% 42% 34%

DCs

0% 8% 28% 36% 28%

Distributors/customers

0% 9% 30% 37% 24%

0 1 2 3 4
21 The Supply Chain of the Future
A LogiPharma Report

“ Being responsive to changes in global


Transparency and demand is a major priority
a willingness to What are your key priorities when implementing end-to-end
supply chain visibility?
collaborate with all
(Please rank each 1 - 5. #1 is the biggest challenge)
stakeholders is an
absolutely essential Being more responsive to
demand changes
component of success.
30% 27% 26% 16% 1%
We truly believe that
through partnerships and Building better relationships
with customers

open communications, 23% 21% 33% 17% 6%


we all win. “ Being more responsive to
Mary Tussing supply changes
Manager, Global Business Development,

17% 28% 39% 12% 4%


United TempControl

Improving quality and


traceability

14% 29% 40% 14% 3%

Building better relationships


with suppliers

12% 23% 40% 19% 6%

Better managing CMOs

10% 31% 34% 19% 6%

Enabling control tower-type


capabilities

10% 39% 39% 10% 2%

1 2 3 4 5
The Supply Chain of the Future
A LogiPharma Report 22

About: E2open
Founded in 2000, E2open provides the largest and most comprehensive Supply Chain Operating Network,
including a broad suite of collaborative supply chain solutions. Leading global enterprises, including pharma and
biotech companies, rely on E2open to provide greater end-to-end visibility, more accurate data and insights, and
real-time business process orchestration across complex, multi-enterprise trading partner networks.

For more information, visit: www.e2open.com.

About: OM Movianto
As part of US-based Owens & Minor Inc., we are a healthcare dedicated pan-European network operating in
over 15 European countries with a diverse product and service offering.

OUR Vision is to connect the world’s leading life-science companies to the point of care to enable better
patient outcomes.

OUR Mission is to remain fully focused on delivering healthcare services and solutions. We seek to
understand the volume and technical demands of our clients product portfolio to ensure we enable flexible
and customised patient centric solutions, through a pan European platform that offers consistency,
reliability and resilience of service underpinned by a total focus on our quality management systems.

For more information, visit: www. movianto.com.

About: United Cargo TempControl


TempControl is United Cargo’s premium service for pharmaceuticals and other commodities requiring
temperature-sensitive transport. TempControl’s customer-focused approach features both standard and
customized SOPs and a network of 67 certified handling locations worldwide. Temp Control’s volume
of business, along with our investment in facilities, teams and product development, continues to grow
each year. United Cargo delivers shipping solutions via the cargo capacity of world’s most comprehensive
route network – 4,500 flights a day to 339 airports operated by United Airlines and United Express. United
operates a mainline fleet of more than 720 aircraft, including 170 wide-bodies, on which United Cargo
carried 1.44 billion pounds of cargo worldwide in 2016.

For more information, visit: www.unitedcargo.com.

About: WBR Digital


At WBR Digital we design and execute bespoke content marketing campaigns, delivering insightful content
to our high-level audience all year round.

We are a team of marketers, researchers and writers with a passion for content with a creative twist. From
research-based whitepapers focused on your priorities, to benchmarking reports, infographics and webinars,
we can help you to inform and educate your readers and reach your marketing goals at the same time.

Contact: Chamatkar Sandhu, Digital Sales Director, +44 (0)20 7368 9383, chamatkar.sandhu@wbr.co.uk.

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