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DEVENDRA: SAP has earned global dominance in ERP and associated systems to empower the life sciences industry. What were the demands on your resources during the last two years of the pandemic which exposed the vulnerabilities of the supply chain?
SUDY: SAP customers leaned heavily on SAP over the last 2 years to help them thru the pandemic. We have provided customers with innovative offerings, which included the holistic shift of all on-site activities to operate remotely, as well as concentrated efforts to support the manufacture and distribution of COVID-19 vaccines. SAP has assisted three new COVID-19 vaccine manufacturers implement SAP S/4HANA to help them manufacture, ship, and track COVID-19 vaccines. Additionally, SAP teams helped two large COVID-19 vaccine producers add the processes needed to bring the vaccines to market. Needing to quickly source ventilators, hospital beds, and masks, customers leveraged SAP Business Network to find suppliers and alternate suppliers. We also made some of our solutions (SAP Strategic Sourcing Suite) available to customers free of charge to help organizations find new sources of supply.
In response to supply chain disruptions, many of our customers needed to quickly implement planning and transportation solutions to be able to simulate and dynamically adjust schedules. SAP accelerated the move of our customers to the cloud for flexible deployments.
DEVENDRA: What are your high-level insights into meeting the challenges of Building Resilience and Executing Corporate Responsibility?
SUDY: This is a challenge for every business as balancing resilience, risk, and responsibility crosses many dimensions. Life sciences organizations need actionable insight to make decisions about whom to do business with and to understand how certain suppliers and collaborators meet corporate responsibility goals. Since so much of a business depends on trading partners – such as suppliers, contract manufacturing organizations, and logistics service providers – organizations must be mindful of who they work with outside their four walls. Leveraging analytics and machine learning capabilities can help organizations get a clearer picture of the costs associated with risk and resilience.
SAP not only leverages sustainable best practices, but also is building and providing best practice solutions to help our customers meet their sustainability goals. SAP is looking at sustainability end to end, including product development and process changes to meet sustainability goals.
DEVENDRA: While black swan events, by definition, are unpredictable, are there any leading indicators of an impending crisis that an organization should track?
SUDY: While organizations have corporate strategy teams who have responsibilities for predicting and planning crisis and continuity strategies, many were unprepared for the various disruptions over the last two years.
From a leading indicator perspective, organizations can watch:
- Days sales outstanding – to understand if customers are experiencing financial distress
- In-bound lead times – to understand if suppliers are experiencing challenges
- Plant yields – to understand if quality is slipping
- Shipping times – to understand if logistics service providers are experiencing challenges
- Employee absenteeism and employee engagement – to gauge workforce health
- Employee vaccine mandate tracking – to examine healthcare utilization to understand workforce health better
Proactively, organizations can also leverage technology to keep a close eye on integrated quality to prevent issues with the product; end-to-end product traceability, which can ensure serialization for DSCSA and compliance with other global regulations; and the elimination of product spoilage (waste) through cold chain tracking automation.
DEVENDRA: How does an organization become proactive in this regard and what are the metrics?
SUDY: Focus on having an agile and flexible organization. The ability to quickly make decisions to take advantage of market opportunities and to pivot from one specific business to others is essential to ensuring the resilience of an organization. While there are firm constraints in every business (for example, a two-year manufacturing cycle), the focus needs to be on removing as much friction as possible from the various processes within your organization.
The first area to tackle is often the planning cycle. This cycle represents the time from the forecast to full commit, including suppliers and revenue/financial impacts. If your organization plans four times per year, consider increasing the cadence to five times per year for added agility. Other aspects of your organization where you can measure your ability to adapt and potentially remove friction include, 1. Lead times, 2. On time in full, 3. ASN compliance, 4. Track-and-trace capabilities, and 5. Premium freight
DEVENDRA: If Disruption leads to Transformation, how do you expect the Murky supply chain of healthcare to change in the future?
SUDY: The healthcare supply chain will continue to become more complex. Advances in science will lead to the approval of new drugs, therapies, and devices which will disrupt the current supply chain. The organizations that are part of the connected supply chain will then need to update technology and innovate to support healthcare better.
Those organizations will then transform through the deployment of solutions that improve supply chain visibility and actionable information from consumption points to raw material. The adoption of Industry 4.0 within the factory provides organizations with critical agility, speed, and integration of supply chain and manufacturing. The need to focus on more agile inventory and faster turnaround will remain an essential component of supply chain strategy. The concept of “bringing home our supply chains” is sound in principle, but in practice, may take 10 to 20 years to fully manage risk. Therefore, a hybrid model may be leveraged: nearshore for lower volumes (with the ability to scale) with higher volumes in current offshore locations, as nearshore capabilities are ramped up.
One specific area where I expect to see transformation from disruption is in the manufacturing of personalized medicine. The production of medicine for a patient, created from the patient’s blood and tissue, will totally disrupt the current supply chain and force the implementation of new models.
DEVENDRA: Recognizing the fact that majority of the members of the global BSMA community are small and midsize companies who may not even have a product, how can SAP address their formidable challenges of success and growth?
SUDY: SAP has a strong focus on life science organizations of all sizes and offers customers a variety of flexible options. We have scaled our offerings for smaller enterprises and expanded our partner and reseller network to meet customers where they are. Whether that means accelerating our capabilities to move customers to a private cloud or supporting key hyper-scalers connected to the customer, our teams work with our customers every step of the way in deploying SAP solutions.
A key factor in this industry is scale – these organizations want to innovate, and they want to scale. This means that their employees, service providers, customer operations, manufacturing, supply chain, finance, technology, and suppliers need to scale the innovations. As evidenced by the COVID-19 pandemic and recovery, the ability to scale a business up and down is essential.
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