Supply Chain Management Assignment: Impact of Emerging Technologies on Pharmaceutical Industry
Question
Task: Write a detailed report on supply chain management assignment on the topic “emerging technologies for transforming supply chain of pharmaceutical industry”.
Answer
Executive Summary
The theme of the report on supply chain management assignment is evaluating emerging technologies for solving complex issues in the pharmaceutical sectors.
The main purpose of the report is to evaluate the impacts and role of digital tools and emerging technologies for transforming the traditional supply chain framework of the pharmaceutical industry.
To meet the purpose of the report, a case study approach was used for collecting the required information. In the case study approach, the information collected was analyzed and recommended for a real-time pharmaceutical company named Pfizer. The data was collected through secondary sources and analysed using descriptive and qualitative methods.
The major findings of the study revealed that Artificial Intelligence, Big Data, IoT are types of emerging technologies that will enable pharma companies in transforming their supply chain frameworks into efficient and cost-effective models. However, the challenges and cost of using technologies should be considered while transformation.
In managing the supply chain ethically and cost-effectively, it is important for making supply chains integrated for achieving customer satisfaction, and sustainable operations.
1. Introduction
1.1 Project Context
The pharmaceutical industry is one the largest and rapidly growing sectors with the advancement of technology and increased consumer demands. The companies in the pharma sector often struggle in meeting efficiencies in operations due to which operational costs increase that also impacts the final prices of the products.
1.2 Background of the Study
The landscape of the pharmaceutical industry has been widening due to which pharmacy companies are required to adopt cloud-based technologies for smoother operations, faster deliveries, and attaining ultimate customer satisfaction. In recent times, the application and usage of emerging technologies in the pharmaceutical supply chain have increased due to an increase in generics, high demand for cold chain logistics, and increasing prescription volumes (Ghadge et al, 2012). In addition to this, the situation arisen by pandemic has also prompted companies like Pfizer to transform their supply chain for reducing the market gaps and delivering health care products within timelines.
1.3 Introduction of the project and organization
In many developed and developing regions of the world, chronic diseases like Type II diseases have increased due to which the demand for medicines has also risen. In addition to this, developing countries are considered to be emerging markets for various pharma products due to which an efficient supply chain will help companies in meeting customer demands, supplying to larger populations, and experiencing high revenue. In recent times, the supply chains are operational on traditional models which leverage scope for using emerging technologies that solve pertaining challenges and issues in delivering the products to larger populations.
Pfizer is a well-known biopharmaceutical company that is engaged in the development and manufacturing of products in health care. The commercial activities of the company are focused on Innovative health Areas like developing medicines and vaccines along with research on consumer health care, immunology, oncology, rare diseases, and others. Pfizer Essential Health Domains involves branded generic medicine, generic sterile products that can be injectable, and infusion systems. The company has vast operations globally thus adoption of emerging technologies will help in reducing costs and improving efficiencies.
1.4 Importance of Emerging technologies in supply chain
The supply chains in the pharmaceutical sectors can be improved with the application of emerging technologies that will help in reducing costs while also reduce operational challenges. With the advancement in cloud-based technologies and the use of big data, it has become feasible for attaining end-to-end tracking details in the entire supply chain framework (Mishra et al, 2018).
Emerging technologies and innovation like Artificial Intelligence, Machine Learning, and roboticsis playing a significant role in transforming the supply chain for providing faster, cheap, reliable and sustainable services (Ittmann, 2015). The conventional operational mode has changed the expectations of technologies, trends, and customers thus adoption of advanced techniques has become important.
1.5 Remainder of Study
The study will aim at evaluating emerging technologies for improving and transforming the supply chain of pharma companies like Pfizer.
2. Literature review
“2.1 What are Emerging Technologies?
Emerging technologies are generic terms used for describing new technologies, development of existing technology tools that are applied in different domains like business, science, education, and others. In addition to this, emerging digital technologies have been generating varied opportunities and challenges (Srai et al, 2015). Examples of emerging technologies include Artificial Intelligence, Gene therapies, 3D printing, nanotechnologies, robotics, distributed ledger technologies, and many others. In addition to this, the supply chain can be improved by applying AI, robotics, and others in the pharmaceutical sectors for improving time-consuming and costly processes.
2.2 Importance of technologies on Pharmaceutical Companies
In recent times, the supply chains of pharmaceutical sectors are predominated with a large batch with centralized manufacturing units has driven the sectors on slow-paced, operating models with heavy inventories that are inflexible for rapidly evolving customer needs and markets.
The Pharma Supply Chains are highly complexed and regulated with huge customer reach. In this view, Artificial Intelligence, IoT, and cognitive computing will help in managing huge complex networks of suppliers, distributors, patients, and manufacturers, etc. In many pharmaceutical companies, challenges like end-to end and outside visibilities are hindering the success of the firm. Hence, large companies that earn high annual revenues are unable to gain insights into supply chains and end-to-end (Wang et al, 2019). The companies are still dependent on functioning through spreadsheets like ERP, MES LIMs due to which the processes are manual and error-prone. If digital transformations are leveraged, the companies will enable the decisions to be made with the best information and tools.
The management of dozens of data from varied sources will help in managing costs, supplies, and quality. In addition to this, the data are collected from shop floors, patients, internal sources, third parties, and social media, weather patterns that are further harmonized and enriched within the organization. The management of information and huge data sets will help pharmaceutical companies in connecting the business with internal and external factors (MacCarthy et al, 2016). In addition to this, Automatic Identification and Data Collection are considered to be the ideal technologies for dealing with logistics in the management of supply chains in the pharma sector. In the present times, Barcodes are widely used for identifying products; however, QR Codes are more emerging technologies through supply chains that can be efficiently managed.
In the upcoming years, the competition in the pharmaceutical industry will increase as the patent products worth US$267 billion might expire thus prompting pharma companies to refine the supply chains for sustaining the external market forces (Bose, 2020). In addition to this, the companies have already introduced rationalization of diverse and huge manufacturing networks through acquisitions, however, these strategies will serve short- term. The companies in the pharma sector will require informed decisions about the external market forces for aligning operations with consumer demands and improved patient outcomes that can be easily leveraged through the application of emerging technologies in the pharma sector.
2.3 Use of AI, Data-Driven and Machine Learning technologies in Pharma sector
The supply chains of pharmaceutical companies are highly dependent on drug approval procedures, R&D, and patient treatments. Thus, the organizational steps along with operations and value-added procedures are needed for manufacturing and transporting medications to the areas and regions that are in urgent need. The supply chains of drugs involved time and costs along with risks of frequently changing regulations. After the impact of a pandemic on global supply chains, it has become important for increasing profitability, operational efficiencies, and cost reduction by the application of emerging technologies (Hassini et al, 2012).
The companies can implement AI technologies in the drug recovery process which can help in speeding up the market time for introducing and supplying new drugs. Generally, a typical drug design sustains for approximately 10- 15 years which agility, precision, and expenses form crucial components in the development of drugs thus collecting data points of potential drugs can be efficiently collected through the capabilities of Artificial Intelligence and Machine Learning (Marra et al, 2012). The emerging technologies will help in evaluating huge datasets, finding their correlations for generating new results.
The supply chains of pharmaceutical sectors contain laborious tasks that are time consuming and repetitive. For instance, drug samples have to be mixed purified thus integrating intelligent mechanics as robotics arms can help in improving work productivity. The applications of robots can be applied in monitoring systems for tracking performances and allowing the manufacturer to evaluate and analyse the production in the facilities while also increasing value over time (Esmaeilian et al, 2020). The companies can roll- out phase-wise integration, for prioritizing tasks for ensuring the least processes and disruptions.
IoT is considered to be an ecosystem through which various devices and processes are connected through communication systems which can further help in planning and rescheduling thus preventing additional expenditures. The emerging technologies will optimize manufacturing units and supply chains in pharmaceutical sectors will help in gaining competitive intelligence thus helping the firms in gaining critical information on market developments, expansion plans, machinery & equipment, and others (Montecchi et al, 2019). The technological development will help in evaluating risks, mitigating exposures, and heightened efficiencies by monitoring structured and unstructured data sources that are obtained from internal and external operations. It helps in optimizing production errors by alerting discrepancies while also help in obtaining deep customer insights and loyalty.
AI solutions can be adapted for enhancing supply chain planning routes, estimating demands, behaviour analytics, and big data analytics for resolving issues about the logistics industry. AI will help in providing deeper visibilities, therefore, providing helping the companies in managing risks. The AI devices and equipment help the managers in closely working with representatives from the pick-up points to transit and delivery points thus easing visibilities for the manufacturers and shippers (Radanliev et al, 2019). The emerging technologies help detect market changes and predict risks thus helping to undertake informed decisions about production while also adopting alternatives in logistics and supply chains.”
3. ResearchMethodology
“3.1 Research Methods
To research the use of emerging technologies in supply chains of the pharmaceutical sector case study approach will be used as a research method. A Case Study Approach is referred to as a research approach that is used for generating a multi-faceted understanding of complex issues in real-time issues. The research design is very well established and is used in many disciplines especially in social sciences (Duff, 2018). In this view, the case has been chosen while two justified reasons will be applied for the case study analysis. The first justification reason will be addressing critical concerns, in this scenario, exploring existing supply chain issues in pharmaceutical industries. The second justification will be exploring the topic in detail by evaluating opportunities for the identified problems, in this case exploring emerging technological options for addressing pertaining supply chain issues.
The case study approach has been adapted for evaluating the impact of emerging technologies on supply chains of real-time companies like Pfizer. It will help in analyzing real-time scenarios that can be utilized for addressing potential gaps and challenges. The case study approach will be based on secondary data collections from the company websites and other journals and articles, hence detailed analysis can be obtained. The major advantage of the case study approach is detailed information can be obtained as compared to other research designs. It is also beneficial in conducting research in which large samples cannot be collected. However, the case study approach has criticized severally as collected data cannot be implied on larger population or might not relevant for solving broader issues of the supply chain.
3.2 Data Collection Analysis
Data Collection is referred to as the collection of facts, figures, objects, and symbols that are obtained from varied sources. Data collection is very important as lack of information might impact decisions, discussions, and findings thus influencing outcomes of the research. There are two methods of collecting data that is primary and secondary. Primary Data is referred to the collection of first-hand information that is highly specific for meeting the motive and accuracy of research objectives (Engel et al, 2012). On the contrary, secondary methods are data collection methods that have been used already in the past thus obtaining information from varied journals, government publications. Both the primary and secondary sources involve qualitative and quantitative data techniques.
The research will be conducted by using information from secondary sources by using descriptive analysis. Thus, sources like peer-reviewed journals, government databases, industry sources will be explored for obtaining information on the case selected. In this view, data sources will be selected from 10 years in the context of changing customer patterns, industrial trends, and emerging technologies that have helped in developing supply chains of the pharmaceutical sector. Since secondary sources are selected thus works of various authors on supply chain management will be reviewed for exploring opportunities to address issues.
The supply chain issues in the pharmaceutical sectors will be explored while solutions related to emerging technologies and opportunities will be discussed.”
4. Findings
In the recent situation of the pandemic, it has become important for companies in the pharma sector to adopt advanced technologies for delivering safe and reliable products in the market. In the post-COVID-19 scenarios, the company was already facing difficulties in managing supply chain operations as the demand for generic medicines has increased along with chronic ailment medications. In many emerging lacks of feasibility poised challenges in adopting sufficient technologies to deliver the product along with tracking various functions in the supply chain framework of pharmaceutical companies. The challenges in inefficient supply chain frameworks increased the cost of operations. However, in the pandemic scenarios, production, and manufacturing of essential drugs were majorly impacted due to restrictions imposed by the governments for stopping the spread of the virus. Due to this, existing inventories could reach target markets while new products were not started due to lack of labours and other resources, this created huge market gaps which also resulted in reduced patient outcomes and an increase in prices of available products. Emerging technologies like AI, Big data will enable to predict market changes in advance along with supply chain efficiencies.
Figure 1:Pharma Supply and Logistics Network
(Source:Bose, 2020)
4.1 Use of Artificial Intelligence and Machine Learning in Pharma Supply Chain
In the current trends, many big companies like Pfizer have using AI for disease identification, diagnosis, clinical trials, drug manufacturing, predictive forecasting. The use of AI and machine learning is helpful in the initial screening of drug compounds for predicting success rates in biological factors. The ML and AI help in measuring RNA, DNA thus enabling precision medicine for the fast delivery of drugs and customized medication for improving patient outcomes. The forecasting of epidemics and pandemics can be done; thus, AI and ML are applied for monitoring outbreaks. Predictive Forecasts enable the companies in the pharma sector for aligning the inventories in the right time and quantity based on the intensity of predictions.
After the medication has been developed, it is important for identifying the right candidates for clinical trials which are enabled by AI and ML technologies that can detect history, medical conditions, and attributes of individuals.
In this view, Pfizer has collaborated with IBM for utilizing AI technology in drug discovery in immune-oncology research for fighting cancer. Pfizer has been a few of the pharma companies to use AI and ML for changing the landscape of the supply chain. The company introduced “Highly Orchestrated Supply Network” for achieving complete visibility in product status while also identifying demands in global contexts. The AI helps in alerting production facilities for meeting the demands and delivering the products on time. The company aims in using AI and ML in its upcoming e-commerce strategies for moving the product directly to the supply chain with reduced cost and accurate analytics of demand.
4.2 Benefits and opportunities in Supply Chain Management
Big Data- The supply chain in the pharmaceutical industry provides massive data that can be used for optimizing operations (Raman et al, 2018). Data science will help the firms in using the data for gaining valuable insights that revolutionizing the supply chain by controlling quality, maintain cash flow, real-time deployment, warehouse efficiencies, predicting weather patterns, inventories, supply and demand for companies like Pfizer (Tatoglu et al, 2016).
Artificial Intelligence and machine learning: AI and Machine learning help in optimizing the processes and procedures of the supply chain through the application of semi and full automation.
AI and machine learning help emulating human performances and competencies thus improving forecasting, planning, and maintenance of logistics and supply chain in the pharmaceutical industry (Manning & Monaghan, 2019). The Supply Chain of Pfizer will be boosted with end-to-end activities of tightening data securities, application of predictive modelling in third party logistics, providing full supply chain visibilities for improving KPIs, automated inventory management, shipping & delivering (Blanco et al, 2018).
Internet of Things (IoT)- The IoT is referred to as an efficient tool for increasing visibility and connectively across all the devices thus reducing expenses. The IoT devices can efficiently manage warehouse functions and help in tracking the deliveries and predicting the demands thus improving revenues and market capture of Pfizer (Aryal et al, 2018). It will benefit the warehouse and other line managers in pharmaceutical industries through improvement in asset utilization, customer services, streamlining inventories, supply availabilities, providing safe and reliable working conditions, and others.
Figure 2: Opportunities for Improving Supply Chain
(Source:Bose, 2020)
4.3 Future Direction in Supply Chain Management with Emerging Technologies in Pharm sector
The future of supply chain management in the pharmaceutical sector will supports efficiencies and automation.
Autonomous Mobile Robots- Companies like Amazon have been using automatic robots to manage the supply chain; however, this technology is relatively new in the pharma supply chain and models. The robotics will be helpful in the warehouse organization of Pfizer like loading and unloading of bulk stocks along with optimization of the picking procedures in the pharma sector.
Truck Collaboration: The advanced systems will help truck manufacturing companies to monitor the market, incorporate automated processes while also cut down costs. This will strengthen the collaborations with the supply chain and logistics thus enabling pharmaceutical companies like Pfizer to procure and delivering the products with the highest efficiencies.
Distribution of Inventories- The inventory software used in current times is inefficient for maintaining distributed inventories, due to which the companies engaged in supply chain struggle in meeting innovative shipping demands. Technologies like Distributed Inventory Flow Forecasting helps in predicting the material flows, enabling businesses for maximizing order fill rates while also maintaining inventory count to avoid stockpiling in the pharmaceutical industry.
Drone Deliveries- The driverless and drone delivery options provide solutions to numerous issues encountered in the supply management of pharmaceutical companies. These emerging technologies reduce the costs and human intervention while also provides access in remote areas.
Blockchain Technology- In the exchange process amongst the countries, the organization faces issues due to a lack of transparent operations as invoices and shipments consume time in processing which also complexes the supply chain. Blockchain technologies have potentialities for providing higher traceability and security (Dujak&Sajter, 2019). In addition to this, the crypto currency capabilities of blockchain technologies will help companies in managing the contracts and agreements while also supervising financial transactions with third parties.
Figure 3: Comparison of Current and Future Supply Chain Network of Pharmaceutical sector
(Source:Bose, 2020)
Ardito et al, (2019) conducted the patent analysis for finding for revealing the complementary roles of the digital technologies in Supply chain management and integration. The findings of the study revealed that industrial IoT will play a crucial role in collecting raw data from inbound and outbound logistics thus improving product- customer interaction. Big data analytics and Cloud-based structures will help in matching the focus of supply and demand processes.
Singh&Raghuram, (2017) conducted a study with 50 supply-based companies in the emerging market of India and found that mental make- up has to be developed for implementing emerging technologies in supply chain management. Saldanha et al, (2015) opined that the adoption of IoT, Big Data, and business analytics has rapidly increased from the year 2015 thus enabling the companies to transform from general supply chain models to specific customer-focused design, performance, and model of the supply chain.
4.4 Challenges of Emerging technologies
The emerging technologies are being considered a life-saving instrument; however, technical advancement has played a vital role in increasing medical costs. The increased use of medical technologies or using old techniques increases the medical and pharma costs by 40- 50%. The costs of up-gradation of software and maintaining cloud systems will rise which will strain the financial resources of public and private companies like Pfizer. Thus, many authors in the pharma and health care sector suggest that increasing costs can be attained by controlling technological use. System glitches and software crash is common when numerous functions are performed in the supply chain framework, in this case, the IT teams use patches to recover. However, frequent up-gradation is essential for smooth functioning that can increase the costs of operating supply chains through technologies.
In addition to this, increased use of technologies can also raise unethical practices that further have adverse effects on the communities. Data breach and security has been raising concerns due to which the technology has been effectively used by many companies and countries. The supply chain framework based on IoT and AI will collect huge amounts of data that can be stolen by cybercriminals (Merkuryeva et al, 2019). With the lack of proper monitoring systems and secured platforms, the organizations like Pfizer might find it difficult in managing intentional malicious attacks that can increase costs and reduce stakeholder confidence. A data breach can change production patterns and allow other misalignments that negatively impact the business and society as a whole.
5. Implications and Recommendations
5.1 Implications
5.1.1 Need of Emerging Technologies in the Pharmaceutical sector
The maximum companies involved in pharmaceutical sectors possess complex supply chain systems that are usually under-utilized and inefficient to deliver different product types developed in recent times. The marketplace has been evolving in the pharmaceutical sector with a gradual shift from patient to outcomes, due to which radical change in the supply chain is urgently required (Merkuryeva et al, 2019). It is expected that in the upcoming years, shorter lifecycles of the products will be in higher demand due to which new patterns of assessment, approving, supervising, delivering health care products will oblige the organizations for adopting transformation in the supply chain. The functions of the supply chain in pharmaceutical sectors include manufacturing and delivering medicines to the patients through prescription. The pharmaceutical sector involves different stakeholders like manufacturers, distributors and benefits managers, and others, which makes the supply chain complex and expensive.
5.1.2 Role of emerging Technologies in Supply Chain Management
The advancing technologies like artificial intelligence, Neural network, and machine learning have led to transformative changes in supply chain management in the last 5- 7 years. The emerging technologies are being adopted in all industries due to shift in demand, increase in delivery timelines, reducing the prices of the products along improvement of sustainable operations. In managing the supply chain ethically and cost-effectively, it is important for making supply chains integrated for achieving customer satisfaction, and sustainable operations.
The cloud computing platforms will help the pharma companies in tracking the materials, receiving real-time updates, informing the status of customer orders, and many other benefits. The cloud-based technologies enhance the supply chain operations with data storage space, integration, secured services, sharing of information. The streamlining of activities and processes can be done between devices and users of the software. The latest technologies in logistics and supply chain enable the companies in tracking the cost and delivery speed to align the operation with the customer rating matrix (Prajogo&Sohal, 2013). Due to the emerging technologies, supply chain software enables the companies in correcting potential mistakes thus making modifications in the customer orders, along with the communication with different channels and automated shipping.
5.2 Recommendations
Pfizer should invest in the digitization of the supply chain in emerging markets while integrating to the cloud- based for removing the inefficiencies. The global companies are expanding in developing markets thus supply chain of Pfizer will help in creating competitiveness by collecting real-time information from the patients for improving treatments. The same-day delivery through drones will reduce costs and speed up service deliveries thereby improving revenue generations in emerging markets. It is important for companies like Pfizer for ensuring secured systems are created so that unethical practices and cyber attacks can be detected in advance. This will promote efficiencies and reduce the cost of data sacrifice to the pharmaceutical companies. The findings revealed that increased use of technologies increases the costs of health care and pharma sectors hence companies like Pfizer requires planning and implementing cost-effective technologies in supply chain management on the global fronts.
6. Conclusion
The supply chain consists of intricate functions that involve costs and time. In the recent years, medical equipment, generic and specialized drug has increased due to which transformation of current logistics framework has become important. Digitization and emerging technologies are often seen as opportunities for improving efficiencies, gaining business analytics, and reducing costs. Companies like Pfizer with huge global operations often struggle in managing demands and supply chain due to complex structure and operations. Thus, the findings of the report revealed that emerging technologies like Artificial Intelligence (AI), Machine Learning (ML), Big Data, Internet of Things (IoT) are some of the emerging technologies that can benefit companies like Pfizer in managing the supply chain operation effectively with end-to-end tracking.
However, some challenges in the increased use of technology have also been detected like increasing costs of up-gradation and data breaches which might disrupt the organizational and societal structure. Hence, companies like Pfizer are recommended to adopt secured platforms for managing their pharmaceutical supply chain framework. The companies like Pfizer should also use technological tools in detecting demands and delivering products on- time in emerging markets of the world. The report reveals that advanced technologies in pharmaceutical supply chains are infant stage thus adopting advanced techniques will not only smooth the operations while detecting demands, alert systems, and reduce the cost of manufacturing & delivering medical products. The developers should also aim at creating secured technologies for safeguarding the interests of all stakeholders.
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