Integrate or disintegrate?

Introducing the dos and don't of collaborative working in a pharma-logistics context

Since its emergence as a realistic organisational model in the final quarter of the last century the business potential of integrated collaborative working has captured the imagination of a generation of business visionaries.

And, for the most part, there it has stayed. Firmly in the imagination. Because despite all the voguish zeal and rhetoric, most high-level integration solutions remain in the mind; aspirational yet quixotic,'must-dos' that rarely enter the real-world theatre of operations.

Wait. After just three sentences, I'm already anticipating a crescendo of outrage and affront. "We've been working collaboratively / had integrated logistics chains in place for years" come the muffled shrieks from horrified readers (muffled by the sand).

Really? Well, I'd love to see them. For my part I have observed plenty of lip-service, lukewarm experiments, loose arrangements, partial implementations, muddled interpretations, flawed execution and failed attempts. But where are the exemplars? the successes? the role models?

How can this be the case? Well, firstly, the pursuit of logistics excellence has arguably never even been on, never mind topped, the Christmas wish list of Big Pharma . In an industry facing a raft of arguably more pressing issues, and one with a typical logistics spend around one third that of some adjacent industrial sectors, logistics is not something that gets too many Big Pharma executives downing their sleeping pills.

But the main reason for the low uptake is that real top-to-bottom supply chain integration requires Herculean effort to implement. Despite a widespread recognition of the potential benefits, the goal of businesses performing as mutually-supportive teams remains as elusive as ever.

But let's be clear, supply chain convergence is not rocket science. No, it's much harder than that. This is because, unlike aerospace engineering which is essentially governed by the inviolable laws of physics, supply chain integration is dependent on the, infinitely less predictable, emotions and interactions of homo sapiens. Yes, living, breathing, people. You, me, us and them.

Supply chain integration doesn't happen just because you throw an expensive MIS software solution at it or you issue a management decree. It happens because real people, their companies and their supply partners strategically commit to it and make it happen.

But do we really need it? When I get asked this question, sometimes the words 'Nero', 'fiddle' and 'fire' spring to mind and at other times the words "elephant" and "room". But let's just say that in a sector facing a confluence of rocketing costs, mushrooming regulatory demands, remorseless competitive pressures, accelerating consumer expectations, increasingly market driven logistics, growing market volatility, waning 'breakthrough' innovations, escalating environmental burdens and the unrelenting impact of rapidly advancing technology it beggars belief that more is not being done to bring pharma-logistics up to speed with collaborative best practice. The reality is that Pharma could learn a lot by looking at what is happening over the fence in other fields. Dynamic sectors such as retail, food, energy, electronics, construction, and automotive are all operating successful integration models and the time is now for pharma-logistics to learn from these and get back on the curve.

But is partnering relevant to pharma-logistics? Firstly, don't fool yourself into thinking that pharma is so unique that it can't learn from others. From a logistics perspective it has some specific challenges including tough temperature controls, strict regulatory oversight and onerous track and trace liabilities. But these are hardly exceptional conditions. In fact, logistics is a natural contender for close-knit integration since, almost by definition, it relies on the successful interaction of a number of cross-functional activities conducted by groups of independent stakeholders. Properly executed integration can lead to step-change reductions in the levels of waste, risk and discord that are invariably associated with conventional buyer-seller relationships.

Can partnering principles work in a pharma-logistics environment? Let's just say that an integrated logistics network that is collectively dedicated to meeting the needs of the ultimate of the ultimate customer will always trump a collection of disengaged businesses each having the primary focus of simply keeping their head above water. History shows that those enterprises that singularly pursue profit at the expense of customer satisfaction always get their just desserts. By becoming an integrated supply chain player and driving common-purpose, efficiency, agility and sustainable strategic relationships you will be giving your operation a head start in the new pharma economy.