Transforming Life Sciences and Pharmaceutical Supply Chains

For supply chains in life science industries to deliver competitive advantage in today’s dynamic business environment, the first priority of supply chain strategic planning must be understanding customer demand.

Unfortunately, these supply chains generally lag behind in this area. Gartner survey data on the future of supply chain indicates that just 19% of supply chains in life sciences and pharmaceuticals are designing new supply chain capabilities to enable customers to get their own jobs done, compared to 23% of supply chains overall.

Recent disruptions — including manufacturing consolidation, climate events, and economic and political upheaval — are driving healthcare supply chains to be reactive to backorders and recalls of essential medical products. This increases the total healthcare supply chain cost to serve, which already averages 37.3% of the total cost of patient care. Supply chain leaders in life science industries must invest in longer-term solutions that provide business continuity while maintaining profitability.

Digital technology can enable life science and pharmaceutical supply chains to better connect with their customers, and thus improve the demand signal that supply chain leaders work to fulfill.

Digitally informed decision making is largely an untapped opportunity for life science supply chains. 

• Fewer than half (44%) of life science supply chains use technology to calculate how different scenarios would impact their goal outcomes in a decision. 

• Those who do use technology to support decision making use advanced analytics (69%), performance tracking/enhanced visibility tools (17%), and artificial intelligence (AI) and machine learning (ML) (14%). 

• Mostly technology enables demand planning within the sales and operations planning (S&OP) process.