[Exclusive Interview] A 30+ Year Supply Chain Journey in Biopharma

I sat down with Dr Ravi Prakash Mathur, Vice President Supply Chain Management at Dr. Reddy’s Laboratories. He shared stories on his thirty years in the pharmaceutical industry, providing his thoughts on the power of digital operating models and what other industries can learn from Pharma.

Regarding your 30+ year career, do you want to share a supply chain and operational planning story with our audience?

Throughout my extensive 30+ year career in Supply Chain, I've witnessed a remarkable evolution in how we conduct business. One of the most significant transformations has been the journey from traditional analog or paper systems to the modern era of "AI-enabled tools." This shift has increased efficiency and paved the way for more accurate and data-driven decision-making.

A key aspect of my experience has been leveraging digital technologies to enhance supply chain visibility, integrating planning processes with other organizational processes such as financial and new product launch processes. This digital integration has undoubtedly increased organizations’ responsiveness to adapt swiftly to ever-changing market dynamics.

Adopting quality management frameworks, such as Six Sigma, Lean Management, and the Theory of Constraints, has been another crucial driving force behind continuous organizational improvement. These methodologies have not only streamlined processes but have also fostered a culture of excellence and efficiency.

In terms of global expansion, organizations have taken steps through strategic acquisitions, partnerships, and alliances and have been helped by expanding digital footprints. The digital footprint mirrors the physical reach.

The last few years, marked by the unprecedented disruptions brought on by the COVID-19 pandemic and various geopolitical factors, have highlighted the importance of resilience and adaptability of supply chains. In such times, robust operational planning and comprehensive business continuity strategies must be balanced. These strategies have not only helped us navigate these challenges and have enabled us to maintain a consistent supply chain while fostering growth.

What are the characteristics of the biopharma industry that make it unique and complex? What are the unique differentiators across generics, CHC, branded, and biologics?

The biopharma industry's unique characteristics stem from its focus on innovation, complex R&D, regulatory oversight, and global operations. In contrast, specific segments within the industry exhibit their differentiators based on factors such as product type, regulatory environment, and market dynamics. The biopharma industry is unique and complex due to strict regulation, high R&D costs, and the importance of intellectual property protection.

Modern biotechnology has revolutionized the production and manipulation of large molecules, crucial components of biopharmaceuticals. Recombinant DNA technology, cell culture techniques, and synthetic biology enable the creation of specialized therapies, such as proteins, antibodies, and gene-based treatments. These large molecules have transformed modern medicine, offering targeted therapies, diagnostics, and research tools with superior precision and efficacy to traditional drugs. They promise personalized treatments and a deeper understanding of complex diseases, ensuring their central role in the future of healthcare.

What can pharma learn from adjacent industries (e.g., CPG, Financial) and the leading practices they have adopted?

CPG companies excel in understanding consumer preferences and behavior. Pharma can benefit from adopting a more customer-centric approach, focusing on patient-centric data, preferences, and outcomes. By leveraging data analytics and customer insights, pharma can tailor its products and integrate services into its portfolio to better meet patient expectations.

The pharmaceutical sector can further refine its supply chain operations and optimize inventory levels by borrowing inventory management best practices from industries like automotive and aviation. Ultimately, the sector could deliver better healthcare outcomes for patients.

As the pharmaceutical industry seeks ways to improve efficiency, product quality, and overall competitiveness, adopting continuous manufacturing is a transformative approach. This shift towards continuous manufacturing represents a forward-looking step that aligns with the industry's pursuit of innovation and excellence.

What critical business decisions are required today to enable supply chain resilience considering short-term, S&OP (mid), and long-term views?

In order to foster supply chain resilience, businesses must make pivotal decisions across various timeframes. Effective inventory management, robust supplier collaboration, precise demand forecasting, and continuous risk assessment are paramount in the short term. In the mid-term, Integrated Business Planning (IBP), scenario analyses, supplier diversification, and strategic technology integration play a pivotal role. For a long time, optimizing network design, vigilant supplier risk management, efficient capacity planning, comprehensive strategic planning, and thoughtful portfolio management are essential to ensure a resilient, adaptable, and sustainable supply chain capable of withstanding disruptions and aligning with evolving market dynamics.?

The industry increasingly embraces IBP as a strategic shift to streamline operations. This entails aligning departments like marketing, supply chain, and finance around a unified dataset, ensuring a shared version of the truth. This integration leads to optimized decision-making, particularly in capacity planning, resulting in resource maximization and efficient production. Moreover, IBP facilitates identifying business opportunities while proactively mitigating risks, fostering a holistic view of the business landscape. The system minimizes inventory write-offs and the likelihood of supply failures, enhancing financial stability. Additionally, IBP significantly improves vital Supply Chain Management (SCM) performance indicators like OTIF (On-Time-In-Full) delivery, forecast accuracy, back orders, and inventory management, ultimately driving better customer satisfaction. IBP revolutionizes the organization by breaking down silos, empowering data-driven decisions, and fostering agility, positioning the industry for growth and resilience.

What are the unique challenges in regulatory/country-specific filing and approvals and quality? Why is it critical to integrate this into the Supply Chain?

Each country has its own product-specific review and approval process that leads to the grant of marketing and import/manufacturing license for that product. The close interface between regulatory filings, approvals, and the supply chain is crucial to ensure that products are launched on time. Supply chains must be involved, from filing for permission to launching the new product. It reduces delays, ensures compliance, manages risks, and meets the market's expectations. Having the proper organizational structure that manages all the processes associated with the launch, such as capacity allocation in manufacturing, sourcing of launch-related materials, and planning of the launch, is critical for success. Different organizations deal with it in different ways.

Where is the industry's sustainability journey (and carbon footprint) and integrating with the core business model??

Industries are actively progressing in their sustainability journey and integrating a carbon footprint into their core business models.?

Carbon accounting is crucial to addressing climate change and achieving emissions reduction targets. It allows organizations, governments, and individuals to track their carbon footprint, set emission reduction goals, and evaluate the effectiveness of their mitigation efforts.?

International bodies, such as the Intergovernmental Panel on Climate Change (IPCC), are working to develop guidelines and methodologies to enhance consistency and comparability. Additionally, collaborations between governments, organizations, and experts are taking place to promote the adoption of common standards and ensure transparency in carbon accounting.

While various carbon accounting approaches and frameworks exist, such as the Greenhouse Gas Protocol (GHG Protocol) and ISO 14064, work is still building universal consensus and harmonization.

On the industry side, there is increased awareness and commitment to environmental impact, setting emission reduction targets, measuring carbon footprint comprehensively, and adopting renewable energy and energy efficiency practices. Regarding emissions, the focus is on Scope 2 and Scope 3 emissions.?

Sustainability is embedded into business strategies, focusing on circular economy principles, green innovations, and transparent reporting. Businesses are also building sustainable supply chains and collaborating with suppliers for better environmental practices. Particularly in the supply chain and logistics, creating common frameworks with suppliers and customers and setting up progression targets is the way to ensure that the entire supply base is compliant with the agreed ESG norms.?

How do the current fragmented and older generation IT landscape and Excel-based tools impact analytics and speed of decision-making?

The current fragmented IT landscape, coupled with older systems and Excel-based tools, can negatively affect analytics and decision-making in various ways. It results in data integration challenges due to data silos in multiple systems, leading to data quality issues and time-consuming data preparation that reduces efficiency. This leads to limited scalability and problems handling large datasets for complex analyses. In their fragmented state, the need for real-time insights and collaboration capabilities. To improve analytics and decision-making speed, organizations should modernize IT systems, prioritize data integration and centralization, and foster a data-driven culture. Harmonization and standardization of data are crucial for creating workable datasets.?

How can analytics and data-driven decision capabilities create a competitive advantage? How can the industry move towards a proactive supply chain?

Analytics and data-driven decision capabilities offer a significant competitive advantage in supply chain management. They empower businesses to anticipate disruptions and optimize inventory using real-time insights and predictive analytics. However, most importantly, analytics can help identify market opportunities by identifying gaps and product shortages. Supplier performance and risk management enhance supply chain resilience, while customer insights drive personalized products and services. Additionally, cost optimization opportunities can be identified through thorough data analysis. The industry should prioritize investments in data integration, robust analytics capabilities, and real-time monitoring to transition toward a proactive supply chain. Collaboration, continuous improvement, and scenario planning are essential, alongside leveraging technology for transparency and resiliency enhancement.?

How can digital twin technology and scenario planning support making supply chain resilience quicker to activate and execute while managing volatility effectively?

The combination of digital twin technology and scenario planning offers a robust framework for swiftly and efficiently enhancing supply chain resilience while effectively navigating the challenges posed by volatility. Digital twins play a pivotal role by creating virtual replicas of supply chain networks, enabling real-time monitoring and vulnerability identification, scenario simulation, operational optimization, and resilience strategy testing. Concurrently, scenario planning involves the analysis of diverse future scenarios, aiding in early threat detection and preparedness, fostering flexibility and collaboration, supporting data-driven decision-making, and facilitating continuous improvement. Integrating these approaches empowers organizations to rapidly activate and execute supply chain resilience measures, leveraging proactive strategies rooted in data-backed insights. The most notable advantage of digital twins is the possibility of creating a robust supplier and competitor intelligence platform, which, when bolstered by AI, will provide organizations with a distinct competitive edge.

*Disclaimer: The views expressed are Dr Ravi's and he is answering them in his personal capacity. The answers do not necessarily represent Dr Reddy’s laboratories' views ,position or strategy.

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