What is the Future of Supply Chain in the Life Science Sector?
The life science sector is going through immense changes and disruption. Moreover, the industry companies are also moving towards localization because it does not want to depend on other countries to gain some benefit. The companies are also focusing on the supply chain’s security because they are slowly decreasing their dependency on outsourcing it to other countries to get the cost advantage.
The localization of the life science sector
Localizing in the life science sector is not a new concept, but it is increasing in recent times. The life science companies are looking forward to bringing back elements of products in their local markets. It is also necessary for them to develop a presence in the worldwide market.
However, the large pharma, medical device, or biotech organizations have to increase their capabilities to meet the local market’s requirements to develop drug security with full production and distribution locally. Although it is virtually impossible to decrease the dependency on well-established trading relationships overnight, the companies are trying their best. It might take the life science companies months or years to stop utilizing their API supplier or move a drug to a local manufacturing center.
The companies can also increase their capabilities to discretely serve the local markets even while utilizing a global supply model where it seems accurate. The outcome might not end the global supply chains, but it will develop a multi-layered ecosystem with the small local supply chains connected to a worldwide backbone for the large companies. However, it will be necessary to apply a new supply chain visibility, communication, and collaboration level.
The growth of CDMOs
During the pandemic of COVID-19, one sector of the life science has witnessed extreme growth, and it is the Contract Development and Manufacturing Organization (CDMO) market. it is also estimated that CDMOs change will increase in the future.
The life science companies have increased their partnering with CDMOs because of the high demand for production to meet objectives like localization while prioritizing cost and revenue. Many governments are also trying to incentivize the utilization of CDMOs to drive the country’s production. Therefore, the organizations will increase their investment in CDMOs to accelerate their presence in the global market at a reduced cost.
How Technology Will Benefit the Life Science Supply Chain:
The life science industry has become necessary to have a more advanced supply chain to meet the increasing demand cost-efficiently. It has become urgent for the sector to change its operations due to the patients’ evolving requirements and technological advancements.
However, presently the life science and healthcare sector are witnessing a transformation in its operating models and supply chains. The industry is also affected due to cost pressure from regulatory authorities, consumer behavior, government, and digitalization. The companies that are already using Technology and advanced supply chain will be at an advantage in the competition. Here are some of the significant trends in the life science industry, and the developing patient-centric healthcare method will need a more cost-efficient, complicated, and capable supply chain.
1) Advancing Data Analytics (Big Data)
With the help of Data analytics or Big Data, healthcare providers can make better-informed decisions about managing operations. It can be done by connecting the members of healthcare systems and combining the data. The system will help the healthcare system accurately predict, reduce expenses, and increase efficiency in the logistics and supply chain operations.
2) Internet of Things (IoT)
Internet of Things (IoT) can increase the visibility and connectivity in the supply chain. It will also help life science companies better control the product inventories in the supply chain and decrease waste and loss. Robust links among physical products and data will also help the industry fight its battle against theft and counterfeiting.
3) Healthcare On-Demand
Healthcare on-demand can increase the response to increasing the online and home care channels. It is estimated that the online pharmaceutical market will grow immensely in the future. Due to such augmentation in the market, the delivery channels are also changing by applying new direct-to-consumer delivery models.
4) Robotics and Automation
The utilization of robots and automated vehicles will help them decrease labor necessary for the repetitive tasks like analyzing laboratory samples, picking products in warehouses, and sorting them. Aerial drones can also be utilized to offer faster and cost-effective deliveries in remote locations.
