4 Lessons learnt on the road to serialisation: The supply base is over-stretched

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In the last article I looked at the first two learning points we have gleaned from Serialisation projects we have been involved in: ‘Executives need to understand that serialisation will halt sales if implemented poorly’ and ‘The technology is still relatively immature’.  In this next article we will consider the next four learning points we have observed.

Learning 3: The supply base is overstretched

For many years, there has been a great deal of uncertainty in the implementation timing of certain legislation requirements, and legislators have often delayed deadlines.

This has had a knock-on effect on the solution providers. Understandably, they have been reluctant to commit to expanding their businesses until they were confident that the cus­tomers would require the capacity.

To date, this has often meant that, particularly in the enterprise solution space, actual ca­pacity and development activity has been limited. Indeed, whenever legislative deadlines have approached in the past, it has been clear that the vendors quickly became capacity constrained, with availability of key staff being highly restricted and noticeably extending delivery lead time.

With implementation dates in the US and EU looming, vendors are reporting significant expan­sion to meet the anticipated demand. Whilst this is very good news in terms of the capacity it will create, there are two related issues that will likely spin out of this. Firstly, it is very challenging to rapidly expand any business without impacting the quality of products and or service. Secondly, the expansion is being carried out to meet an anticipated signif­icant increase in demand and therefore, this new capacity is unlikely to do anything more than meet this additional demand.

Therefore, we recommend ensuring that any serialisation plan be built using conservative lead time estimates and that capability implementation be phased. Also, consider avoiding plans that call for significant capability implementation in the 2017/18 time period. We pre­dict this period will be highly challenged, much like dealing with the Y2K issue was in 1999.

Learning 4: Ensure a robust cross-organisation impact assessment is carried out and maintained

To successfully implement serialisation solutions, pieces of capability need to be implement­ed across many functions and geographies in an organisation. More often than not, phar­maceutical companies also need to ensure that capabilities are implemented in many third party supply chain partners as well. Impacts on such aspects as products, countries, supply chain nodes, supply chain partners, supply chain processes, and IT systems all need to be considered.

Given the long lead-times and complex interdependencies between the different elements of the serialisation capabilities, we have found it essential to ensure that an early and com­prehensive impact assessment is carried out and then acted upon.

Furthermore, serialisation requirements and typical pharmaceutical companies are constant­ly evolving, therefore there needs to be a mechanism in place to ensure that any impact assessment is reviewed regularly to ensure changes are adequately addressed in a timely manner. It is our experience that relying on established business processes, such as change control, do not provide a timely or robust mechanism to achieve this objective.

Learning 5: Ensure the true complexities of your supply chain are understood early

To implement effective solutions to address serialisation, it is important to understand the true complexities of the product / supply chain mix. Many day-to-day realities of a modern pharmaceutical supply chain can present significant issues to serialisation implementation activities if not understood early.

Situations such as: local re-labelling and kitting activities; sale of product packs into one market which are designed and manufactured for another; locally driven cross-market sup­ply; and multi-market presentations can all present significant challenges.

Also look for situations where your organisation is acting as a contract manufacturer for another company. In this type of situation, you will be faced with integrating your solutions into the serialisation model of your customer. This is an area where standards and solutions are not well developed in many instances.

Furthermore, the high cost of implementing serialisation capabilities means that it is some­times appropriate to change the supply chain to reduce cost. This type of change often requires significant time to achieve and, in the case of such things as regulatory approvals, is not always within the control of the pharmaceutical company.

Learning 6: Choose solutions that will be globally capable

With the drive to implement initial solutions quickly, it is often tempting to “keep things simple” by selecting and implementing solutions that are only capable of meeting the im­mediate or limited requirements.

Clearly tactical solutions of limited scope and or capability have their place. If nothing else, they may be the only practical way to meet short term legislative deadlines in some cases.

We have experienced several instances where initially selected tactical solutions become the company standard by default over time, despite the fact that these solutions were not originally selected for a broader capability and or geographical scope. This often creates significant issues to subsequent implementations which could have been avoided.

We therefore recommend resisting the temptation to rush into implementing short term tactical solutions wherever possible. Where this is necessary, some mechanism should be put in place to review their suitability in the face of expanding requirements and allow switches to more appropriate solutions if necessary in a timely manner.

 In this article I have talked about the need to select solutions that are globally capable whilst recognizing that the supply base is already overstretched.  The increased complexity of global solutions will potentially place greater strain on your chosen suppliers.  I also discussed the need to understand the true complexities of your supply chain and the need to undertake robust impact assessments across the organisation.  Without fully understanding your operation and the impacts upon it from serialisation, you risk implementing suboptimal or even incomplete solutions.  In the next article I will look at Learning points 7 to 10.