Supply Chain Visibility: A Regulatory Necessity and Business Imperative

The globalization of life science products has created unique opportunities and demanding challenges for both industry and regulators.

The globalization and outsourcing of life science products began in the late 1990s. At the time, life science companies began to evaluate their core competencies and decided to outsource non-core competency functions. The primary reason for this trend was to lower costs.  

Globalization has also opened new markets for life science products worldwide, with emerging economies representing fresh markets. Concurrently, issues with supply chain security became the responsibility of all parties involved in the procurement/sourcing, manufacturing, packaging and distribution of raw materials, intermediates, and final product to deliver safe and effective medicines to customers.

Recommendations for a New Supply Network Paradigm
Supply chain dynamics are prompting life science companies to seek innovative approaches that improve product safety while simultaneously enhancing clinical outcomes, reducing costs and risks, and ensuring regulatory compliance. To attain the sustained benefits of globalization, the life science products ecosystem must implement a new paradigm to manage global supply chains.

Companies must implement new strategies while proactively reducing and controlling risks. This calls for changing the business, technology, and regulatory models traditionally used in the industry. The three key components to managing this shift are on-demand visibility, supply network control, and collaboration.

On-Demand Visibility
Historically, the major drivers for visibility and analytics in the life science industry has been processes understanding and control as well as post-facto crisis management and root-cause analysis to support Corrective and Preventive Actions (CAPAs), adverse events, recalls, etc.

The value of visibility was often measured by how quickly the data could fix the problem. Historical data—although valuable when “fixing problems”—does not support the proactive and predictive approaches needed to support today’s agile and fluid life science environments. In a global, complex supply chain environment, just having post-facto visibility is not a viable option.

This global paradigm calls for the implementation of on-demand visibility approaches across all supply chain stakeholders. On-demand-visibility is the ability to obtain relevant, timely product information to confidently enable decisions based on the analysis of contemporary data.

This approach provides brand owners (companies authorized to market medical products)  the opportunity to improve quality while managing costs by optimizing processes and adjusting critical-to-quality in-process parameters within a design space. Maintaining on-demand visibility of upstream processes (whether internal, outsourced, local, or global) allows downstream control strategies to account for the characteristics of raw materials, ingredients, and components to support Quality Metrics, Process Analytical Technology (PAT) and Quality by Design (QbD) approaches.

On-Demand Visibility Roadmap
Brand owners are legally responsible for the safety, efficacy and quality of their products. In a risk-based regulatory environment, lack of visibility translates to higher risk:

• Brand owners cannot outsource liability, compliance, or safety
• The company whose name is on the box is responsible for the product
• Brand owners must address potential issues to prevent them from triggering a recall

On-demand visibility enables the next link in the supply chain to adjust process parameters to compensate for product characteristics.

On-demand visibility ensures organizations get the information they need to support full genealogy and traceability across the supply chain. However, suppliers must be willing to provide this information to achieve this goal. It is not enough to look at the first link in the value chain. Since outsourcing has made the chain longer and more difficult to assess, brand owners must delve deeper into their supply chains to judge distributors and their suppliers’ suppliers.  

Today’s technology has matured to support the implementation of interconnected and interoperable systems that provide on-demand visibility across the supply network. This does not imply a monolithic approach where everyone implements the same system. Rather, each stakeholder should implement interoperable systems based on the latest web and cloud-based technologies. These interoperable systems enable collaboration across the supply network. Another option is for brand owners to provide appropriate access to internal systems to enable data exchange and collaboration.

On-demand visibility also enables the shift from “magnifying glass”-style inspections, where auditors scrutinize every aspect of a company’s quality systems for a short (and pre-announced) period of time, to an “air traffic controller” approach to ensuring quality. In the latter model, information is available on demand, enabling authorized stakeholders to “spot audit” suppliers by reviewing contemporaneous data and changes that potentially could impact product safety, efficacy, and quality.

On-demand visibility also plays a key role in reducing risk and supply disruption by enabling stakeholders to gain value from data across the complete chain.  It allows stakeholders to analyze this data and begin connecting the dots to identify trends before they become problems. Lack of visibility leads to lost opportunities and increased costs. On-demand visibility provides a more complete picture—it more accurately measures the risk associated with a longer supply chain and globalization.

Conclusion
On-demand visibility strategies and systems enable companies to collect relevant, timely information about life science products and confidently make decisions based on the analysis of contemporary data.

On-demand visibility also fosters the shift from “magnifying glass”-style inspections to an “air traffic controller” approach to ensuring quality. In the latter method, information is available on demand, allowing authorized actors to “spot audit” suppliers by reviewing contemporaneous data and changes potentially impacting product safety, quality, efficacy or effectiveness. 

Editor’s note: This is the first of two parts on supply chain visibility in the medical technology global supply chain. Click here to read the second part.
 

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Daniel R. Matlis is founder and president of Axendia, an analyst firm providing advice to life science and healthcare executives on business, technology and regulatory matters. He has almost three decades of industry experience spanning the health-science value chain. He has been an active member in FDA’s Case for Quality Initiative since 2014 and has presented Axendia’s research findings to industry executives and the FDA officials. Matlis began his career at Johnson & Johnson, where he provided leadership in the areas of technology, regulatory compliance and business. Before founding Axendia, Matlis was a partner, vice president, and general manager at a leading life science consultancy firm. Matlis has a Bachelor of Science degree in Electrical Engineering from Polytechnic University (now NYU School of Engineering) in New York and a Master of Science degree in Management from the New Jersey Institute of Technology.