For Industry-Wide Digitalization, Think Small

The needs of smaller companies must be addressed when discussing transformative processes

By Evren Ozkaya, CEO, Supply Chain Wizard

Predictions abound concerning pharma manufacturing’s more automated, data-centric future. Some forecasting focuses on looming serialization compliance requirements and their impact — both positive in terms of consumer safety and product security, and negative in terms of obligatory infrastructure investments and possible production line and supply chain slowdown. Others highlight the bright side by exploring the potential impact of emerging technologies, such as the Internet of Things, artificial intelligence, machine learning and blockchain.

Ultimately, the future will vary by company. Much will depend on the operational strategies chosen and the consequences of these choices. The word “digital” will permeate these decisions, a floating X factor as pharma companies harvest and apply nearly limitless amounts of data in differing, often novel ways.

The point: As much as data can make manufacturing more interconnected, it can also separate players into columns according to differing issues, including resources (which dictates investments in state-of-the-art solutions); production application (dictated by a system’s usage and a company’s priorities); and talent (which dictates how effectively a company’s personnel utilizes newfound data). Considering this, all pharma companies aren’t created equal. In fact, the dearth of parity is eye-opening. Here, more than anything, size matters.

Of all the analyses pertaining to manufacturing’s digital future, one stands out: “Today, 99 percent of all U.S. manufacturers have fewer than 500 employees, so the full potential will be achieved only if the entire value chain, including smaller suppliers, can be digitized.”1

Since the majority of manufacturers in all industries are small- and medium-sized, the needs of smaller companies must be carefully analyzed when discussing transformative processes across an industry-wide landscape. And digitalization, I would argue, is the ultimate transformative process — among the most crucial sea changes in the sector’s history.

Pharma has a particularly long tail of small and medium-sized manufacturers, CMOs and packagers. Having consulted industry players of all sizes over the past decade, I’ve come to believe the future of pharma lies in addressing the needs of smaller manufacturers, as they are most representative of the industry.

My heart wants to believe we can make this digital transformation quickly, but experience tells me that wish is unrealistic. Yet, I am committed to educating companies about the need for digital transformation, and offering solutions to help bring that change about.

A key factor to industry-wide digital transformation is whether small manufacturers can embrace this vision at the big-picture level, while having access to tools executable in smaller steps that eventually build toward comprehensive transformation. This gradual approach creates a sea change without rocking the boat too much.

Ideally, each incremental step, solution or initiative over the scope of a holistic digital transformation should be:
• Affordable: Does not need to wait for next year’s budget cycle
• Valuable: Has ROI within the same year
• Fast: Can be implemented within weeks, not years
• Simple: Does not require advanced skills, resources or management support
• Flexible: Configurable and scalable for various business uses

As much as the promise of an industry-wide digital transformation’s value is staggering, unless the small manufacturers adopt this change, we will never realize this full potential. Faced with the realities of budget and resource constraints, reduced margins and high expectations from customers, smaller manufacturers can only afford so much change. We must meet their needs, because for pharma, thinking small is the only way to achieve lasting, industry-wide digital transformation.  

1. Enno de Boer, “How technology can unlock manufacturing’s potential and $3.7 trillion in global GDP,” LinkedIn; synthesis from World Economic Forum and McKinsey Joint Whitepaper.

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