Industry 4.0 gives the biopharmaceutical industry a way of making more effective and consistent products and increasing their earnings, according to ate Rasche from Miebach Consulting’s pharma and life sciences center of excellence.
“New technologies related to digital transformation have the potential to bring significant change to the pharma supply chain,” she said. “Increased efficiency will have an important impact on the top line and bottom line, if implemented as an entire business model, rather than as isolated projects.”
Making the business case for manufacturing digitization has been flagged as challenging for biopharma companies. For example, a 2018 study by PwC reported that “the lack of clarity about economic benefits is the greatest challenge for industry 4.0.”
Similarly in 2019, McKinsey & Co. noted that biopharmaceutical quality engineers “struggle to define a clear business case for the technological changes, which makes it difficult for them to convince senior management that lab digitization or automation can deliver significant impact.”
But a more recent research by Miebach suggests attitudes have changed.
“Approximately 60% of the participants consider digital transformation as a top management priority, while 80% expect to realize the benefits of digital initiatives within the next five years,” Rasche told GEN. “Most companies in the pharma and life sciences community have created a dedicated digital transformation department, and some have named chief digital officers to lead the transformation process.”
Across the sector as a whole, companies seem more willing to invest in industry 4.0 technologies and infrastructure with an eye on long-term benefits.
“We see in many pharma and bioprocessing companies that they form dedicated teams and leverage external partnerships to SC engineering and digitalization specialist to explore opportunities and use cases for Industry 4.0,” continued Rasche. “All are committed to implement quickly and ready to invest even if there is no immediate short-term ROI.”
So convincing senior execs of the merits of industry 4.0 investment in the biofactory is becoming more straightforward. The difficulty now—Rasche says—is linking the data-driven manufacturing approach to all parts of the supply chain.
“There are still challenges with the group-wide implementation and the inclusion of suppliers and service providers, for example contract manufacturing organizations,” she maintains, while adding that an industry 4.0 supply chain is an investment worth making.
“The growing pharmaceutical and life science market is increasingly characterized by patent expirations, ever more demanding regulations, and more complex reimbursement policies. There is a high pressure on industry profit margins. Supply chain costs, among other operational costs, are under closer scrutiny,” explained Rasche. “A 4.0 approach allows companies to make better decisions by looking at data holistically and understand the mutual impacts in the supply chain. This allows a much-improved sales and operations planning (S&OP) process, reduced inventories, agility, and responsiveness to changes.”
And—based on Miebach’s research—the biopharmaceutical industry is already awake to the benefits of a data-driven, integrated manufacturing and supply chain.
“The overwhelming majority of pharmaceutical companies ranked Master Data Management (MDM) as a `Very important’ or `Important’ driver for supply chain transformation. Having one set of data covering all business transactions is considered essential to support planning and integration of all parties along the supply chain,” she said. “Furthermore, MDM is the foundation of many new initiatives summarized under Big Data. It is expected to enable digitalization, business analytics and in the future AI.”