Consumers accustomed to excellent customer services when making online purchases from retails stores have begun to expect similar excellence from more traditional industries. The pharmaceutical industry, which has existed centuries before e-commerce became a thing, is an example of an industry where much more is expected in terms of customer service for two important reasons. First, the pharmaceuticals industry produces and provides life-saving products and secondly, ensuring these products are easily accessible leads to an improved standard of living.
To put the importance of a high-performing pharmaceutical industry into perspective, a century ago the global life expectancy was 32 years. According to the World Health Organization (WHO), global life expectancy has increased by approximately 20 years. It is also important to note that life expectancy in developed nations is 1.7 times that in developing nations. Access to excellent pharmaceutical services have played an important role in increasing global life expectancy and continues to be the difference across nations.
Despite the increased access to life-saving pharmaceuticals, challenges within the industry exist. Compared to the speed of online retail deliveries, pharmaceutical deliveries are relatively slow. The industry also struggles with optimizing its supply chains when receiving raw materials and when delivering finished products. For example, supply chain challenges have led to Pfizer rolling back its projected releases of the much needed Covid-19 vaccines. In December 2020, Pfizer dropped its delivery figures from 100 million to 50 million due to challenges with receiving the raw materials needed to produce its vaccines.
Manufacturers within the pharmaceutical industry also struggle with demand forecasting, inventory management, and production capacity planning. Implementing government regulations across the production cycle adds to the challenges the industry faces and the financial cost of product recalls and lawsuits run into billions of dollars. Just like the online retail industry, the integration of digital transformation solutions provides both big Pharma and SMBs with pathways to solving the complex problems caused by these challenges.
Solving Complex Problems with Digital Transformation Solutions
Digital transformation solutions include the hardware and software applications required to integrate digital process within physical ones. Just like Industry 4.0, Pharma 4.0 represents the pharmaceuticals industry’s drive to apply industry 4.0 business models powered by digital transformation to optimize its operational processes. The keywords attached to the digital transformation of the pharmaceutical industry include:
- Edge and Cloud Computing
- Industrial IoT
- Risk-based Scheduling and Simulation Modeling
- Digital Twins
- AI and Machine Learning
As with every digitalization drive, the process starts with capturing data across the interrelated operations a pharmaceutical enterprise manages. While the goal is to ensure the interrelated processes are optimized to deliver personalized products and services to the customer. In between capturing data and delivering optimized services, the complex challenges the industry struggles with must be solved and this is where digital transformation comes into the picture.
Let’s start with the basics of solving complex supply chain challenges to highlight the importance of digital transformation to the pharmaceutical industry. The raw materials the industry uses are characterized by finite shelf-lives and the need for special mediums of transportation to ensure they retain their potency. Developing an optimized supply chain strategy starts with understanding demand cycles and evaluating the required resources to meet forecasted demand.
The pharmaceutical industry can rely on digital transformation technologies to transform historical demand data into accurate forecasts using demand forecasting software. Scheduling and simulation software then recreates an accurate model of the factory floor and its production process while integrating customer demand data. With simulation technology, questions such as: how will increased demand affect available resources, operational hours, and what needs to be scaled-up can be answered accurately.
The ability to provide answers to what-if questions is one of the defining aspects of implementing a digital transformation strategy. Data-driven answers concerning demand cycles and the resources needed to meet forecasted demand become the determining factor in scaling up supply purchases and developing alternate supply chains. Digital transformation hardware such as IoT can be employed to track the logistical aspects of moving supplies. Thus, with the help of digital tools, the pharmaceutical manufacturer knows what supplies are needed, where they are, and when they’ll be available on the factory floor.
Customer-Centric Digital Transformation to Improve Service Levels
Solving complex manufacturing-related issues is not the singular challenge digital transformation is poised to help the pharmaceutical industry solve. According to a whitepaper by The Medical Affairs Digital Strategy Council, the industry needs to embrace a customer-centric mindset to provide its customers with the excellence they have grown accustomed to from online retailers. Digital transformation solutions provide a means to develop individualized, responsive services for each customer.
A critical first step to delivering customer-centric services starts with understanding who the customer is. Digital transformation provides a means for gathering customer-related data, through ethical means, to answer questions such as: who is the customer, what defines them, and what customer service-levels do they expect? The answers to these questions have important roles to play in developing and designing packages that appeal to customers while meeting individual requirements.
Conclusion
The pharmaceutical industry has already begun the process of integrating digital transformation strategies to optimize its processes but the room for growth is enormous. To reap the full rewards of digitalization such as sustainable growth, facility-wide strategies requiring the use of digital twin and risk-based simulation modeling applications that provide granular insight must be utilized. Schedule a demo today to learn how Simio simulation modeling and digital twin solutions can help.