Pharma supply chain robotics revolution: Why you can't afford to fall behind

The autonomous supply chain is coming

Tom Bonkenburg

When reading the news, it seems that robotics is disrupting pretty much every industry these days. But how is it impacting the supply chain sector specifically?

Since their beginning, robots have always lived in the ‘make’ side of the supply chain. Robots are very good at precisely repeating the same tasks hour after hour with high quality. This is a good fit for manufacturing where exacting precision is often an important requirement and robots are used to improve quality while reducing the cost of labor.

logistics robotics

The challenges typically found in the ‘deliver’ side, however, often require flexibility rather than exacting precision and the traditional manufacturing robots have not been a good fit. We now see new robotic concepts being developed that are about to  enter the distribution arena allowing organizations to improve quality and reduce labor in the customer facing half of the supply chain. I find this an exciting development that will change the way we design our supply chains of the future.

What are the top two challenges companies face when it comes to adopting these new automated technologies?

One of the main challenges that I see companies facing is their outlook on capital spending and ROI. Many corporations require a payback of 3 years or less for new projects and this often makes it difficult to implement automated technologies. I see this changing, however, as businesses are having trouble finding quality labor and now view automation as a longer term strategic investment. In addition to this shift in thinking, newer technologies coming onto the market will be more flexible in their finance models allowing operations to lease rather than buy robots or move them from site to site as needed to help keep capital spending lower than it has been in the past. 

A second challenge is that what works well in one industry does not always work in another. Every supply chain and every distribution center is different. Just because a technology works for Amazon does not mean it will work for you. Very often  the CSuite does not understand this and tries to push in a technology direction that is not a good fit for them. Really understanding how the needs of your particular supply chain maps against available technology is key to making a good decision and getting buy in from the entire organization.  

The future of pharmaceutical supply chains

Are there any new solutions or technologies on the horizon that have the potential to be especially disruptive?

Although they are not here yet, self-driving trucks are being developed by multiple teams. Google’s Waymo, for example, has announced that they will use their own self driving trucks to make freight deliveries to data centers in Atlanta. This is only a pilot, but the tests will hopefully help the industry develop this capability further. Self-driving trucks have the potential to really change the distribution landscape by lowering costs and increasing service levels. Many things will be affected from the size and location of warehouses to inventory levels and the speed of servicing customers. This will have a large effect on the design of our supply chains.

Looking forward towards 2030, how do you see robotics transforming the pharmaceutical supply chain industry over the next 10-15 years?

I try to never predict what will happen by a specific date in time because we have been disappointed by technology projections in the past. In my opinion, however, the current trends will eventually lead to automation allowing smaller DCs to be productive throughout the day and night, faster service to customers, lower inventory levels, and an overall reduction in cost. Automation will continue to shape the supply chain and changes seem to come faster and faster every year.

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What do pharmaceutical supply chain leaders need to do now in order to prepare for this future state?

We are on the cusp of a significant change in the technology that we use. Much of it is interesting to think about but is just not ready yet for prime time use. Today’s supply chain leaders need to keep themselves continuously educated about upcoming trends in technology because things are changing so rapidly. People in their organizations will be asking ‘is it ready  et?’ and ‘should we jump in now?’ Really understanding in detail and explaining to others the potential and limits of the technologies that are currently available will become an important skill. Salespeople and magazine articles will always make a new idea seem like a winner. The trick is to understand when it is ready for your industry and the direct value it will bring to your company.

Many associate automation with job loss. What are your thoughts on that issue and what advice do you have for those who may be struggling to ease the fear of job loss amongst their workforce?

One of the most consistent challenges that I hear from our clients is their difficulties with finding qualified labor. Right now this is true for all jobs in the supply chain, from supply chain analysists to warehouse operators. In the short term automation will be  able to help alleviate this pressure and we see some operations automating due to staffing shortages rather than for cost savings alone.

The long term outlook depends greatly on your level of optimism. Traditionally automation has unlocked the potential for more diverse jobs and allowed people to move from lower skilled to higher skilled occupations. While only time will tell how long this can continue, I feel optimistic that we will continue to add more jobs than we lose overall for years to come. 

What are the most important objectives you are focusing your team and colleagues on currently? 

Our goal is to always stay on top of the latest supply chain trends to help our clients design their supply chain to best fit their business needs. We are currently helping several startup ventures understand the market requirements for their new technology. This does two things for us: First of all, it allows us to stay on the forefront of new technology and understand it before anyone else. Secondly, it allows us to help shape the direction of new technology development towards the needs of our customers. It is a synergistic win for all of us – the startups, our company, and our clients. 

Connected Logistics 

Lastly, why are you passionate about supply chain, robotics and automation? What about this topic area excites you the most?

I find that I get bored easily when I am not learning. The great thing about supply chain is that there is always a new challenge around the corner, something new to learn, and a new person to meet. A supply chain professional often needs to  understand the effects of topics as varied as marketing, real estate, finance, equipment, unions, technology, shipping, IT, manufacturing, negotiation… the list goes on and on. There have been weeks where I’ve talked with a CEO about strategic  flexibility in their supply chain on a Monday and a with forklift driver about how be best load a truck on a Tuesday. What job could be better than that?

Advances in automation brings with them new things to explore and people to meet. That is always exciting to me!