How Life Sciences Supply Chains Must Respond to Fight COVID-19

Whether it’s healthcare or not, the recent Covid-19 pandemic can’t be ignored in setting up the future of your firm. In the life sciences industry, this outbreak has caused a global shortage of life-saving drugs and supplies. On the other hand, it led to a reduced demand for products used for non-essential activities which were postponed due to the worldwide lockdowns.

This demand shift exposed the health care sector’s weaknesses, mainly caused by a reliance on third-part manufacturers, just-in-time (JIT) inventory combined with the lack of cloud-based visibility and collaboration platforms. To top it off, the redundancy, provided by the ample suppliers, disrupted the complete supply chain.

To best serve the patients, the life science companies must rethink their current supply chain practices and plan for the new ‘post Covid-19’ normal. Following the pandemic, there are four long-term effects predicted on the supply chains of the health care sector.

1. Manufacturing heads back west

The supply chains of life sciences companies have traditionally organized their supply chains with a significant focus on cost reduction, rather than risk management, meaning that China and India have a significant share in amount of drug manufacturing facilities worldwide. With the recent outbreak in mind, we expect that China and India will control their exports more tightly, while other governments will pressure the life science companies to bring production back closer to home.

2. Supply chain visibility becomes an urgent need

An end-to-end supply chain visibility is vital for decision making. A lack of it leaves the manufacturers blind. We experienced this particularly in the recent lockdown periods. In the short term, companies must develop supply chain visibility platforms that give them the ability to determine the coverage, requirements and ideal stockpile levels for every component, whether it is about finished or intermediate products. On longer term, supply chain “control towers” — central functions that use data to support decision making aided by scenario planning and simulations — need to be deployed.

3. Significant demand variability

As stated above, the pandemic led to a drastic change in demand. For instance, the demand for personal protective gear, COVID-19 test kits and ventilators surged, while the demand for new products and those used in optional procedures collapsed. This volatility drew a lot of attention and it required an improved ability from the life science companies to be able to react to these changes. Dynamic planning will become critical, as will the ability to plan based on probabilities of change rather than firm predictions.

4. Faster regulatory and manufacturing cycles.

Currently there is an enormous amount of pressure on pharmaceutical companies and regulatory entities to have a treatment available for the Covid-19 virus. Hence, there is already an acceleration in place for the approval of new and off-schedule treatments. On top, the manufacturers are testing their ability to develop, conduct trails, produce and distribute the new treatments as quickly as possible.

With these new developments, companies will challenge themselves to shorten the time-to-market. They can adopt advanced manufacturing capabilities such as single-use technologies that are easier to leverage for multiple products, and continuous manufacturing that replaces multiple batch steps for example.

Life science companies need to respond to these trends, both in the short and long term. They need to be more agile and be able to react rapidly to external changes. Moreover, they need to anticipate the effects of these changes on the demand, while balancing their capacity and inventory levels to prevent stock-outs.  This capability must include real-time awareness and the projections must be reviewed based on the capacities of the manufacturer and its logistic partners.

At Modis Life Sciences, our professionals share their passion for supply chain with our clients to complete projects on time and with excellence. We strive to boost the client’s performance and to have a positive impact on society.

– Chintan Patel, Project Manager

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