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How S&OP Improves Your Clinical Supply Chain

Essentials of a Successful Clinical Supply Chain

With increased research of biologics and immunotherapies, clinical supply chains must adapt to ensure the success of their clinical trials. The drive behind these new therapies is directly related to the patient-centric mindset sweeping the pharmaceutical industry and shows no sign of slowing down. The future of the industry will be companies that look to their clinical supply chain as a differentiator in bringing new therapies to market faster, safer, more efficiently, and at lower costs.

Enabling this shift will not be easy; clinical supply chains must overcome highly variable lead times, cold chain requirements, high manufacturing costs, spot demand, and increased trial complexity associated with these new therapies. Utilizing sales and operations planning (S&OP) and third-party logistics provider (3PLs) best practices will allow companies to navigate these challenges successfully and realize benefits for their patients and themselves.

S&OP Removes the Firefighting from your Clinical Supply Chain

Life sciences leaders in clinical supply chain understand the complexities involved with balancing supply and demand of investigative product. They also understand that the fine balance is becoming even more important as any planning misalignment can easily lengthen a clinical trial and directly contribute to higher costs for biologics, which are already estimated at 22 times that of non-biologic drugs. S&OP supports a multilevel planning approach which provides multiple benefits to clinical supply chains researching new therapies.

  1. The strategic research plan is the bedrock of any research organizations clinical supply chain and the foundation of a clinical supply chain S&OP process. The strategic research plan incorporates information on ongoing studies and soon to be studies to ensure clinical demand, clinical supply, manufacturing, and procurement are all aligned at an R&D portfolio level. Strategic planning should occur on a yearly cycle and be operationalized at the lower levels of S&OP planning.
  2. Alignment on joint KPIs during strategic planning is crucial to ensure that all areas of the clinical supply chain have a single source of truth and that any conflicting KPIs are discussed to ensure each department knows how their decisions affect the others. This will help streamline decision-making during operational and short-term tactical S&OP planning meetings and mitigate the risk of departments improving their performance KPIs at the expense of others.
  3. S&OP operational planning follows strategic planning and translates the strategy into an actionable study level plan. Operational planning meetings are held on a monthly basis and include a study’s project manager and representatives from clinical supplies, clinical operations, and procurement. During operational planning discussions, each team must bring their associated forecasts/plans to link together and plan for any potential issues on the horizon.
  4. Operational planning is forward-looking and is used to discuss any lessons learned from previous month to ensure the study continues to improve and operate more efficiently in the future. The study project manager is needed to mediate any disagreements between departments and ensure that everyone leaves with one aligned plan. Staying forward-looking and avoiding short-sighted plan adjustments is a key component of any S&OP process.
  5. Short-term tactical planning also known as clinical control tower is held on a weekly basis to triage any urgent supply chain issues.  These meetings are held to review and make changes to plans based on any unforeseen issues to ensure a continuous investigative supply for a trial.  This is the targeted arm of an S&OP process and should be the only reactionary part of the process.
  6. Discipline is key for short-term tactical planning. Regularly scheduled meetings avoid firefighting and productively focus efforts to reach solutions quickly without time wasted or risk to the trial success.

Enable Complex Clinical Supply Chain Strategies with 3PLs

With the development of immunotherapies and personalized medicine, also comes more complex study protocols. Risk from complexity introduced by treatment allocations, patient enrollment/recruitment, and overall study design can be mitigated by utilizing 3PLs. 3PLs can provide a portfolio of different services to support specialized clinical supply chain plans and ensure product is handled and shipped at the exact time needed. A necessary error rate of nearly 0% associated with personalized medicine poses significant challenges in the clinical supply chain process. The cost optimization, flexibility, resourcefulness and specialized expertise provided by 3PLs will allow clinical supply chains to be more agile than ever before and add significant value by creating more options during trial planning.

  • Setting up a win-win relationship with a 3PL is critical to streamline and be effective in the overall supply chain strategy. Being able to optimize the supply chain performance with value-added services gives the supply chain the current technology and resources to handle all types of distribution and logistics needs. This will also provide a portfolio of different services to support specialized clinical supply chain plans and ensure product is handled and shipped at the exact time needed.
  • Overall supply chain strategy when aligning with 3PLs can drastically change outcomes in clinical trials by increasing visibility while cutting cost and striving for operational excellence.

Clinical supply chain costs are estimated at 20 to 25% of overall R&D costs. Newer, more complex therapies only promise to increase these costs in the future. Life sciences companies successful in delivering innovative therapies in the future will:

  1. Recognize the need for S&OP multileveled supply chain planning to support complex, dynamic, and adaptive studies. Clinical supply chains that master this balance will be able to avoid fighting fires and begin to strategically streamline their processes to improve study outcomes.
  2. Create unified KPIs where possible and recognize when metrics are at odds with each other. Successful clinical supply chains need these measures and honest discussions to ensure one source of truth. Doing so also enables a team that is firing on all cylinders to handle any unexpected challenges.
  3. Utilize 3PL expertise to improve supply chain capabilities and increase the ability of a clinical supply chain to flex with various levels of research and development activity.

Clarkston Consulting is an experienced partner in making supply chains the differentiator for life sciences companies. Our experience in implementing and upgrading S&OP processes coupled with our expertise in selecting and optimizing 3PL vendors can help life science companies maximize the benefits of their clinical supply chains to fulfill their promise to their patients.

Co-authors and contributions by Steven Lubel and Daniel Madwed.

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Tags: Supply Chain Planning & Execution
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