Supply chains are under siege. Counterfeit drugs. Recalls. Returns. Security breaches. Complex challenges at a colossal cost. Counterfeits alone cost the industry $46 billion each year. And that’s just the cost to the business. Patient safety comes with its own price.
But don’t count your losses, adopt a business value approach and see what you stand to gain.
Forward-looking companies have used the California ePedigree 2011 requirements to spur gains in efficiency.
Companies such as GSK, Pfizer, Purdue Pharma, and Biogen Idec who pursue both track-and-trace capability and end-to-end visibility, understand that when process and strategy come first, compliance and business benefits follow. As Hussain Mooraj of AMR Research stated, “Life sciences leaders are looking at these regulatory requirements as an opportunity to improve business process and operations, enhance patient safety, and protect the brand.”
Others, however, find priorities in flux with compliance imperatives often pushing up against their quest for supply chain excellence and measurable, sustainable value. By focusing too heavily on technology and timelines, many fail to realize that solutions such as serialization can uncover many opportunities to deliver quantifiable business benefits.
Serialization is a top priority for current state and potential FDA compliance reasons and now also with suppliers to Sam’s Club, who have a two-part serialization mandate in October 2009 and October 2010, respectively. But again, while compliance is often the catalyst, this is a business information alignment issue. Those that embrace it that way and strategically transform serialization data into near real-time insight and knowledge will be able to bring value to the business as a whole not just within their supply chains.
Where are the Value Opportunities?
Unlocking knowledge through serialization extends beyond the downstream flow from manufacturer, to wholesaler, to pharmacy. It includes discrepancies that occur within the stream and the reverse stream flow. As stated by Eric Newmark of IDC Health Industry Insights:
“Revenue lost throughout the later stages of product lifecycle management (PLM) continues to be a silent killer for many pharmaceutical companies. Lack of item level serialization currently costs pharmaceutical manufacturers 4.5 percent of revenue annually. As products travel through the channel, dollars literally leak out through inefficiencies surrounding chargeback discrepancies, duplicate chargebacks, omitted reverse chargebacks, return discrepancies and concealed shortages. Many companies suspect this leakage exists, but have little visibility into its occurrence and do not know how to prevent it. Item level visibility and improved data integration across the value chain resulting from these initiatives will help close these gaps.”
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