At a time when vaccines have become a strategic tool in the fight against Covid-19, vaccines availability for all is at stake. Behind it, pharmaceutical companies, health institutions and distribution actors of the health sector are working together to sustain vaccines supply. However, producing and delivering vaccines means dealing with overly complex industrial processes in a very constrained environment.
Introduction
In the pharmaceuticals industry, companies’ supply is recognized for their best practices in inventory control, information access, innovation, and organizational performance. However, pharmaceutical companies may suffer from weaknesses such as high operating costs, obsolescence, waste production and service level.
We observe that supply chain in pharma industries is not showing great industrial progress compared to other industries but is still innovating in areas related to batches traceability and serialization.
Moreover, pharmaceutical companies face low performance in terms of service level. Indeed, issues in forecasting demand combined with difficulties in releasing batches of vaccines, frequently leads to periods of shortages requiring the implementation of specific allocations. This reduces access to vaccine and impacts OTIF indicators.
I. What are the main constraints and internal sources of risks in vaccine supply chains?
Figure 1: Vaccine supply chain challenges
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Pharmaceutical supply chains face many inefficiencies factors. Among them, the high number of stakeholders involved in these processes, is a significant challenge for the fluidity of information. As the number of stakeholders (internally including Quality Assurance department, and externally as French health authorities ANSM, suppliers, wholesalers or hospitals) increases, the risk of miscommunication/ divergence of objectives increases the same and degrades the information flow of the supply chain.
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In addition to long manufacturing lead-times (up to 22 months), pharmaceutical companies suffer from their reactive rather than proactive demand management models. As most of vaccine technologies rely on living organisms involved in complex cultivation and transformation processes, it becomes even more complex while considering raw material supply. The result of dealing with alive components is a significant risk of scrapping impacting vaccine availability for patients.
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High customer requirements for remaining shelf-life require companies to shorten manufacturing and distribution lead-times. Supply contracts are at stake if the remaining shelf-life is below specifications. Low remaining shelf-life batches require a high level of inventory management to reduce scrapping risks.
These examples of factors are leading to a race against time that pharmaceutical companies must deal with:
- Customer requirements implying increasingly demanding supply contracts: 35 to 45% part of the remaining shelf-life is frozen by customer requirements
- Market regulations and quality standard extending manufacturing lead-times (e.g., Quality control represents 60 to 70% of production lead-time)
Adding other impactful constraints such as the risk of rejection, the demand uncertainty, or incomplete international standards; ensuring vaccines supply at the right time, in the right place, and in the right quantity is an unsolved challenge, highlighted during the COVID19 pandemic.
II. What are the opportunities for better vaccines supply chain resilience?
Strengthening supply chain resilience is critical. Increasing remaining shelf-life, improving quality control procedures, collaborating with authorities for better regulation, challenging current processes with better data management and new technologies are some levers companies could activate to mitigate risks among vaccine supply chain.
Figure 2: Opportunities for better vaccines supply chain resilience
First measure: Product shelf-life improvement
To cope with time constraints, pharmaceutical companies' objective is to gain time before the expiration date. One area of improvement is to work on vaccine stability to consider a potential extension of their shelf-life.
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Advantages |
Business impact |
Feasibility |
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Unlikely to occur On a regular basis as depends on formulation stability, companies' ability to move into development phases and health authorities' approval |
Second measure: Controlling lead-time deviations
Pharmaceutical companies have already set up this type of measure as there are at the heart of manufacturing processes on a daily basis. Our recommendation is to reinforce these measures using Industry 4.0 such as real-time data management.
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Likely to occur Companies must act on production operations and wait times they may face in the manufacturing and monitoring processes |
Third measure: Implementing test pooling for batch release
An appealing measure is developing test pooling at a large scale for its concrete benefits for pharmaceutical companies and its long-lasting benefits. It offers a tangible benefit throughout the supply chain, particularly in terms of sustainability as it reduces the laboratory animals’ utilization.
| Advantages | Business impact | Feasibility |
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Likely to occur Depending on Health Authorities validation of new testing procedures Implies time-consuming change control processes |
Fourth measure: Capitalizing on international initiatives
The main challenge for companies' supply chains is to comply with specifications that differ from one country to another. These differences are barriers to manufacturing innovation and supply chain flexibility in the vaccine industry.
| Advantages | Business impact | Feasibility |
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Occurs ICH Q8, Q9 and Q10 are now integrated as requirements for European GMPs |
*From the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use (ICH Q8, Q9, Q10 and Q11) intended to facilitate interactions between health authorities and pharmaceuticals companies and standardize market access conditions for health products
A main stake relies on fostering “Quality by Design” processes which aim at corresponding to market specifications by applying a particular focus on drugs’ discovery, development, and manufacturing.
Fifth measure: Improving quality and saving time through better data management and innovative technologies
Data management and new manufacturing technologies are becoming increasingly important in vaccine supply chains.
| Advantages | Business impact | Feasibility |
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Likely to occur But companies will need:
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Conclusion
Supply chain resilience has become a critical issue with the Covid-19 crisis. It has led companies to several strategic and tactical transformations. The long and particularly complex journey to complete resilience offers promising opportunities, not only for the industry but also for patients as it improves collaboration among healthcare stakeholders, availability of vaccines worldwide, and social and environmental sustainability. At BearingPoint, we have a broad knowledge of all supply chain topics and a dedicated asset to support you in achieving supply chain resilience.
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