Clinical supply chains can learn some valuable lessons from the experience of other industries. Fang Liu, director of life sciences supply chain with Clarkston Consulting, cites seven specific examples.
SCB: What are some cross-industry best practices that clinical supply chains should be adopting?
Liu: Based on my personal experience, there are seven fundamental best practices that I would recommend for clinical supply-chain organizations. The first is having a centralized planning organization. Clinical supply chains have been very fragmented. A lot of people are just doing their own thing. A central organization can act as a liaison to integrate the clinical side with regulatory, quality and finance functions.
SCB: What about the second one?
Liu: The second is planning buildable materials. The BOM [bill of materials] concept is traditional, and probably isn’t disruptive, but it’s a great way for the clinical organization to handle changes to the product. It ensures that all critical materials are planned. If you don’t put them into the planning BOM, people might forget about them. Also, you want to demonstrate that your drug is better than your competitors, so you have to buy their drugs, which are very expensive. You need to include that as part of your planning BOM.
SCB: What about number three?
Liu: Material requirements planning. A lot of people, especially in smaller clinical stage companies, don’t quite follow MRP logic. I come from the food and beverage industry, where the need for that went without saying. But in clinical supply chains, I see a big disconnect between the demand side and supply side. The supply people — the product-development team — make their own agenda. Then the clinical side says, this is how many drugs we need for the patients we want to put into the clinical trial. There’s not a time-phased, MRP process. The whole planning process needs to be more structured and streamlined.
SCB: Number four?
Liu: Number four is simulation or what-if analysis. In the clinical supply chain, there are a lot of fast and furious changes, involving many different patients and countries. There’s constant change in how many patients we need to dose and what kind of drugs to use. Can you support your planned clinical trials? Do you want to include more countries and more patients, and can your supply support that? There’s definitely some disconnect between the demand and supply side. A third disconnect comes from the finance team, because they also have their own budget. They won’t just allow you just to make whatever drug and go out and buy things. If you have a strong simulation tool, you can see how certain changes will affect the supply chain.
SCB: Let’s move on to number five.
Liu: Five is my favorite topic: the sales and operations planning [S&OP] process.
The time between drug substance manufacturing and the patient getting the treatment can be 18 or even 24 months. It’s a very lengthy process, so we need to have a pretty good plan. We need to make sure all functions and key stakeholders, internally and externally, are on the same page. Having an S&OP process is tremendously helpful.
SCB: Number six?
Liu: It’s the weekly control tower process. It’s a fairly new concept. A lot of supply-chain practitioners recognize the limitations from S&OP as a monthly cadence. Because we have fires all the time. S&OP is more forward-looking. With a control tower, we can address problems in a more efficient and structured way, instead of by e-mails going back and forth. It’s more efficient and responsive.
SCB: And the seventh strategy?
Liu: Key performance indicators. Again, that’s easier said than done, especially in a clinical setting, where resources are very limited. Having KPIs allows you to collect data and create a dashboard. It can be daunting to implement a lot of them at once, so I recommend that clinical organizations start by focusing on a few key supply-chain areas, so that they can build out basic scorecards and focus on core capabilities.