{"id":22354,"date":"2017-11-15T12:50:58","date_gmt":"2017-11-15T17:50:58","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/digitizing-the-makers-of-viagra\/"},"modified":"2017-11-15T12:50:58","modified_gmt":"2017-11-15T17:50:58","slug":"digitizing-the-makers-of-viagra","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/digitizing-the-makers-of-viagra\/","title":{"rendered":"DIGITIZING THE MAKERS OF VIAGRA"},"content":{"rendered":"

Having recently worked in the healthcare industry, I was able to witness how innovation can be slowed due to an unwillingness to embrace the entrance of new technology. Today, global pharmaceutical companies such as Pfizer, which generates $53B in revenues annually and has 63 unique manufacturing sites around the world [1<\/a>], must decide whether to continue to operate as usual or make the necessary investments needed to digitalize their supply chain.<\/p>\n

\"\"<\/a><\/strong><\/p>\n

Pfizer must choose the latter and make the necessary changes needed in order to A) support their expanding supply chain, B) improve connectivity within the organization, C) and meet the needs of key stakeholders, such as distributors, who expect a customized experience. \u00a0<\/strong><\/p>\n

 <\/p>\n

THE PROBLEMS <\/em><\/strong><\/p>\n

Like much of healthcare, the pharmaceutical supply chain is highly complex and tightly regulated. So far, the industry has been slow in implementing changes to the supply chain through the use of digital technology<\/strong>. Part of the reason for that is that \u201c<\/em>high margins \u2026[lead] to a stronger focus on new product development and sales rather than on optimizing operations.\u201d<\/em> [2<\/a>]. However, companies like Pfizer have created an opportunity for other companies to disrupt the industry. For example, IBM Watson has worked to digitize healthcare and the supply chain by recently developing a solution that creates a more transparent supply chain through cognitive learning [3<\/a>]. While there is no question that Pfizer has a competitive advantage due to their R&D capabilities and their global supply chain, the question going forward is whether they have the capabilities to digitize their supply chain or will have to rely on others like IBM and relinquish control of a critical component of the company.<\/p>\n

\"\"<\/a><\/p>\n

Figure 1: Pfizer\u2019s Global Supply Chain [1<\/a>]<\/p>\n

As the world becomes more global and Pfizer continues to expand their reach into more countries, their supply chain will only become more complex. The only way to address that is through digitizing their supply chain. Currently, Pfizer is faced with a supply chain that is disconnected and includes numerous systems, some of which are locally customized <\/strong>[4<\/a>]. In order to best serve customers and maintain data integrity, Pfizer must digitize its IT supply system to accurately ensure that their supply matches their demand. They can digitize their supply chain by improving logistics visibility through consolidating both internal and external data, such as transporting data from tracking devices into a single platform [5<\/a>]. Doing so will not only allow Pfizer executives to better manage a global company, but it will also allow them to better serve key stakeholders, who will have more accurate information on the time frame of orders. They will also be able to pass along demand trends that they see from customers.<\/p>\n

THE CHANGES<\/em><\/strong><\/p>\n

Pfizer has already started to address some of these concerns. They have begun to harmonize their systems through creating a standard enterprise resource planning system that links the manufacturing, financial, and commercial sides of the business.<\/strong> By improving connectivity not just on the supply chain but in other parts of the company, Pfizer is hoping to drive efficiency and visibility throughout the organization.<\/p>\n

In response to new entrants such as IBM Watson, who are attempting to increase the speed and accuracy of supply chains by leveraging data and analytics, Pfizer has developed a Highly Orchestrated Supply Network (HOSuN) approach <\/strong>[1<\/a>].<\/strong> This approach has allowed Pfizer to track the movement of products throughout the supply chain. The HOSuN approach is also designed to align inventory, supply chain planning, and global trade compliance to ensure that the supply chain is balanced and that the company is adhering to strict regulations that vary across the globe.<\/p>\n

THE FUTURE <\/em><\/strong><\/p>\n

For Pfizer to properly position themselves for success, they must continue to invest in developing an end-to-end supply chain integration solution.<\/strong> They have taken the right first step by investing in cloud-based networks and an enterprise reporting system [6<\/a>]. But they must leverage the data they have collected to create harmony across the supply chain and utilize analytics to improve efficiency and reduce downtime. It is believed that through digitization and analytics, downtime in Pharma plants can be reduced by 30- 40% [2<\/a>].<\/p>\n

Moreover, an opportunity still exists to utilize data to better serve distributors<\/strong>. Although the company has taken steps to integrate various parts of the supply chain that were originally siloed by moving to one cloud platform internally, they can better serve customers by connecting distributors to the platform, so they can have improved visibility into the supply chain and flag any issues they may foresee [7<\/a>].<\/p>\n

Going forward, the question is about whether Pfizer will be able to digitize its supply chain while fending off new entrants. <\/strong>Will they be able to implement some of these changes promptly, or will regulation once again slow down the pace of change in healthcare?<\/p>\n

(Word Count: 798 words)<\/p>\n

 <\/p>\n

REFERENCES<\/strong><\/p>\n

[1] Pfizer, 2016 Annual Report, https:\/\/www.pfizer.com\/files\/investors\/financial_reports\/annual_reports\/2016\/our-business\/manufacturing-quality-and-supply-chain\/index.html<\/a> accessed November 2017.<\/p>\n

[2] Ehrhardt, Marcus & Behner, Peter. \u201cDigitization in pharma: Gaining an edge in operations,\u201d PWC, <\/em>October 19, 2016. [https:\/\/www.strategyand.pwc.com\/reports\/digitization-in-pharma<\/a>], accessed November 2017.<\/p>\n

[3] Webber, Lori. \u201cTop Supply Chain Trends for 2017,\u201d IBM, <\/em>[https:\/\/www.strategyand.pwc.com\/reports\/digitization-in-pharma<\/a>], accessed November 2017.<\/p>\n

[4] \u201cDigitizing the supply chain: Why Pfizer is investing in IoT, drones and personalized medicine<\/p>\n

,\u201dInternet of Business, <\/em>January 31, 2017, [https:\/\/internetofbusiness.com\/digitizing-supply-chain-pfizer-iot<\/a>], accessed November 2017.<\/p>\n

[5] Schrauf, Stefan & Berttram, Philipp. \u201cIndustry 4.0: How digitization makes the supply chain more efficient, agile, and customer-focused,\u201d PWC, <\/em>September 7, 2016. [https:\/\/www.strategyand.pwc.com\/reports\/industry4.0<\/a>], accessed November 2017.<\/p>\n

[6] Paul Taylor, \u201cPfizer moves supply chain to cloud,\u201d Financial Times, September 11, 2012, [https:\/\/www.ft.com\/content\/1608e5d6-fc59-11e1-ac0f-00144feabdc0<\/a>], accessed November 2017.<\/p>\n

[7] HBR, \u201cDigitizing the supply chain,\u201d October 10, 2017, video, https:\/\/hbr.org\/webinar\/2017\/10\/digitizing-the-supply-chain<\/a>, accessed November 2017.<\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

It’s hard to tell whether the lack of innovation in the healthcare industry has been\u00a0driven by heightened regulation or risk-adverse corporations, but one thing is certain: Industry leaders like Pfizer must start to embrace digitalization or risk losing some of their competitive advantages.<\/p>\n","protected":false},"author":10344,"featured_media":23537,"comment_status":"open","ping_status":"closed","template":"","categories":[3235,2029,2842,3222,41,2042,2308,769,699],"class_list":["post-22354","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry","category-digital-supply-chain","category-digitization","category-disruptive-technology","category-global-supply-chain","category-healthcare","category-ibm","category-industry-40","category-pfizer","category-regulation","hck-taxonomy-organization-pfizer","hck-taxonomy-industry-pharmaceutical","hck-taxonomy-country-united-states"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/rc-tom-challenge-2017\/","yoast_head":"\nDIGITIZING THE MAKERS OF VIAGRA - 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