- Competition and Globalization leading to shrunk margins.
- Fraudulent and counterfeit products.
- Stringent regulatory rules.
- Increased cost of research, development and production.
- Growth in usage of medication.
- Packaging and labelling requirements driven by retailers.
- The “Patent to Patient” supply chain process.
Sunday, March 2, 2014
Visibility: An Answer to the Challenges faced by Healthcare
The global medical industry, with a turnover of over $ 4.5 trillion, is one of the world's largest and fastest growing industries. Some of the common segments of this industry are; Medical equipment and supplies, Pharmaceutical, Healthcare services, Alternative medicine sectors.
Given the size and importance of this industry, the supply chain in the healthcare industry is proportionally complex. The gist of the supply chain process still remains the similar to other industries; starting from purchase of raw materials and ingredients, formulation and packaging of dosages, shipment from manufacturing units to warehouses to retailers using logistics, finally making it to medical institutions and patients. But the healthcare industry has a number of factors affecting its supply chain. 
Along with managing inventory and beating costs, pharmaceutical industry has to address the above issues to be successful. Meeting the compliance and regulations just add to the problem.
Increasing the visibility in healthcare can definitely help the medicine industry solve a lot of the above mentioned issues. Not having enough visibility e.g. not knowing the route by which pharmaceutical products make it into the hands of the customers can lead to fraudulent products. As per FDA regulations, these life science companies need to keep a track of the product information such as historical locations; time spent at each location, packaging configurations, and storage conditions. This is done to maintain the lifecycle of medical products in the supply chain effectively and safely. Major drivers for visibility in healthcare include the need to:
1. Meet Pedigree Requirements - A drug pedigree identifies each point of sale, purchase, or trade of a drug, including other details like the date of transactions, the names and addresses of all parties etc.
2. Manage Product Recalls – A product recall is a request to return an entire batch of product due to identified safety issues. With every recall, there are 2 ways that any drug company suffers: once in terms of logistics effort and second in terms of losing consumer confidence. To address this issues, there is a dire need of better monitoring of the supply chain process in the healthcare industry.
3. Counterfeiting in the supply chain – Another major problem faced by any drug company is counterfeiting. Proper visibility to from origin and ownership of products could immensely help in preventing fake drugs from reaching the markets.
4. Deal with offshore manufacturing quality – To increase profits and survive in the competitive market of medicines, companies head off shore to manufacture products. This process is also enabled by the introduction of a number of generic drugs. Maintaining a standard production effort and adhering to six sigma becomes difficult in such a case.
To comply with the rules and regulations, and to ensure quality of data in the pharmaceutical industry, healthcare companies are looking towards visibility to address the challenges while maintaining quality and safety.
Track-and-Trace technology is believed to enable efficiency of operation, improved visibility of product, faster returns, lower product recall an increased safety.
The simplest and easiest ways to increase the visibility in the supply chain is by the use of Auto-ID/RFID/Bar Code. These can help mitigate the risks involved in pedigree maintenance. The products can be tagged with one of these during packaging. This will eventually make products trackable, traceable and recallable whenever required.
Another way to achieve better visibility would be through better integration of the various technological aspects of the drug manufacturing. Healthcare organizations in general have fragmented IT which makes it difficult to manage and utilize the information. Hence, technology adoption in better ways can also have a huge impact in achieving visibility. To adopt technology, which would involve cost, time, resources and political constraints, healthcare firms should make a judicious choice and then embark on their technological journey.