Though many thought that the gaps in supply that cropped up in 2020 were a product of COVID-19’s initial shock to the global system, it’s now clear that there was — is — more to the story. Three years later, supply chain disruptions, rationing, and empty shelves continue to touch the industry. Pharma manufacturers are still struggling to meet the demand for lifesaving medication, and a significant portion (37%) of know shortages are related to supply or manufacturing issues.
Manufacturers are well aware of the current situation and the impact the current environment is having on their businesses. A recent Parsec survey on the state of the manufacturing industry revealed that more than one-third (36%) of leaders find supply chain issues “extremely” challenging to overcome, and more than half (53%) of all manufacturers surveyed said they are not fully prepared to confront the supply chain issues the industry faces.
With shortages nearing an all-time high and supply chain issues unlikely to abate any time soon, many pharma leaders have taken steps toward digitalization in an effort to mitigate the effect of disruptions and visibility gaps on their objectives. However, pharma manufacturers will need to change their approach to remediation if they want to prevent these challenges from rolling over into the new year. For most, that will mean taking the next step in their journeys toward digitalized operations.
Tools of the trade
Pharma manufacturing’s digitalization journey only began in earnest within the last 10 years, with the bulk of the progress occurring in the latter half of that period. Though businesses have invested significant sums in digital tools, the industry as a whole remains relatively immature compared to other sectors. The Parsec survey noted above found that nearly a third (31%) of manufacturers still collect and report data via non-digital methods, and 66% say they are not capable of leveraging artificial intelligence (AI) and machine learning (ML) within their operations.
The advancements in industrial Internet of Things (IIoT) devices, AI, ML and digital supply chains we’ve seen over the past five years have the power to kickstart businesses’ efforts to mature their programs. In short, the tools are available, and manufacturers are gearing up to make new tech central to their operations. More than half (54%) of leaders say they plan to increase spending on new tech by up to 10% in 2024. This is a fantastic step on the road to a more mature pharma manufacturing industry, but it cannot be the first one.
Digital supply chain, performance monitoring, scheduling, and reporting technologies are helping businesses streamline, optimize, and market-proof their businesses — to a point. And though our survey found that most manufacturers pursuing digitalization are happy with the results, it’s becoming clear that having the technology won’t be enough to overcome the current challenges.
The key to maturity comes from the other side of the journey: the process.
Outcomes drive optimization
When pursuing digital transformation, the approach is as important as the technology, if not more so. Technology — like a manufacturing execution system (MES) — is the engine, but leadership and culture are the wheels. Sure, the car might run with just an engine, but it won’t move. It’s this misunderstanding of the relationship between the two elements that has impeded digital manufacturing’s maturity journey.
To deliver lasting and meaningful results, companies must take an outcomes-based approach to adoption. Those that do, McKinsey found, are 1.7 times more likely to achieve results that exceed expectations than those that do not. However, knowing what you need to do is one thing; executing is another.
The task of identifying the right outcomes to put at the center of your plans can feel daunting, and this uncertainty is getting in the way of pharma’s progress toward streamlined and resilient digital operations. However, many industries have undertaken this process before, and leaders can learn from their efforts.
Step 1: Research
To solve a problem, you must understand it. That starts with people. Leaders should take the time to meet with employees in various areas of the organization to discuss issues that impede their work. Leaders should also include input from workers at every level of the company. After all, no one knows what happens on the factory floor better than the people who work there every day. It’s also critical that these conversations touch on what optimization would look like and capabilities (not technologies) that employees wish were available to them.
Then, leaders should review relevant performance data from their operations, keeping an eye on metrics that reveal financial performance and speak to waste within the facility or enterprise. Finally, leaders should consider these two data sets — qualitative and quantitative — side by side to see if there is any correlation between them.
Step 2: Assess
The next step is using the above information to outline what the company hopes to gain from embracing digital tools. This helps you determine what’s stopping you from attaining it — and how to fix it. It’s also important that you use the results of your assessment to outline metrics and benchmarks against which you will measure progress. This helps keep planning and implementation steps focused on actions that get you closer to your ultimate vision for optimization.
Step 3: Plan
The strategies you might use to address a lack of employee understanding of new tools are very different from those that can help with problems rooted in outdated equipment. If you, like 46% of manufacturers in the Parsec State of Manufacturing Survey, find that your roadblocks are related to workers’ inexperience with AI and ML tech, you may want to start with training and communication about the importance of learning these skills. If your root problems are more technical — like poor performance visibility or automated reporting capabilities — identifying partners and software that can help may be your first step.
In all likelihood, though, you will have some combination of the above and need to outline a multipronged approach to move the organization forward.
Step 4: Implement
Only now should leaders begin to invest in, integrate, and communicate the changes employees and partners can expect in the coming months. Though the results of this process may not have changed your mind about the right investments and adjustments for your business, going through the process will allow you to enter the implementation phase with a more precise mission and a better idea of what it will mean to succeed. It will also foster confidence in the value of the changes among employees and other stakeholders who may have been hesitant to go all-in on transformation.
Step 5: Evaluate and adjust
Digital transformation is an exercise in continual improvement. The power of connected manufacturing is its ability to highlight inefficiencies and reveal opportunities to innovate and improve. As such, consistent re-evaluation and openness to changing the ecosystem you’ve put in place is critical to overall success
The full picture
Though the significant advancements in industrial manufacturing ecosystems have set the stage for a more mature digital future in pharma, adoption alone is not enough to right the ship. To find their footing in the new year, pharma manufacturers will need to embrace the other piece of the puzzle, placing process adjustments on equal footing with technological progress.
Of course, meaningful improvement cannot come overnight. The road to mature digital operations is paved with incremental changes that view the journey as one that’s equal parts capabilities and culture. That means assessing where the business now stands and ensuring that outcomes, not tech, are leading the process.
