COVID-19 changed everything. Drug firms were forced to find new ways of making and distributing products. And, says McKinsey partner David Keeling, the digital tech that enabled this change is set to shape the industry for years to come.
The disruption caused by the coronavirus pandemic had an immediate impact on biopharmaceutical industry supply chains. At first, many drug companies struggled to find the materials, technologies, and the third-party capacity needed to maintain output.
But as the emergency continued, they found ways of adapting to the changed environment by developing new sourcing and management strategies.
“Recent supply disruptions have led to most companies creating enhanced visibility into their supply chains, strengthening their internal risk assessment and mitigation processes, and undertaking several initiatives to strengthen supply networks,” explains Keeling, citing changed industry interactions with contract manufacturers as an example. “Biopharma manufacturers are now more closely partnering with external manufacturers, i.e., CDMOs, to bring novel therapies to market. While there has been a strong track record of collaboration, we have seen a move toward a ‘strategic partnership’ model that is enabled by a higher level of transparency and joint innovation.”
And digital technology was key to these new sourcing and production strategies.
“Digital technology has played a key role in enabling the above-mentioned shifts and driving significant performance improvement in biopharma manufacturing,” Keeling continues. “More and more, companies are moving toward network-wide and end-to-end digitization.”
He points to Bayer, GSK, J&J, and Cipla as examples of manufacturers moving in a digital direction, noting that each has received Global Lighthouse Network certification for their sites from the World Economic Forum (WEF).
And the number of drug makers using digital manufacturing and supply chain management technologies is likely to go on increasing, according to Keeling, who says the pandemic has helped biopharma to stop dragging its feet.
“While historically biopharma manufacturers lagged other industries in adopting digital and analytics at scale, the pandemic necessitated a radical shift in how biopharma manufacturers operated to enable serving humanitarian needs at an unprecedented scale and speed. Over the next few years many of them may make rapid strides in adopting digital and analytics at scale,” he tells GEN.
“We believe digital adoption in biopharma manufacturing has crossed an inflection point. Our research indicates that digital leaders in biopharma manufacturing have achieved breakthrough performance improvements that are not feasible through traditional methods of lean and six sigma alone. The significant value creation and competitive advantage for companies may make digital adoption inevitable, and no longer a choice.”