Untangling complexity through innovation and connectivity
The approval of the first $3.5 million hemophilia B gene therapy cements the position of cell and gene therapies as revolutionizing medicine. However, the complexity of the manufacturing process and the ongoing environment make it a challenging endeavor.
2022 saw continuing challenges with sourcing of key manufacturing materials across the biopharmaceutical and medical device segments. Smaller manufacturers are experiencing particularly significant challenges due to delayed or canceled delivery of vital materials as their suppliers experience upstream supply constraints of their own. Available supply is often reallocated to larger customers.
We expect these challenges to continue and perhaps deepen during 2023 into 2024 necessitating innovative procurement strategies to ensure LS manufacturers have what they need to produce biopharmaceutical therapies and medical devices. These innovations in procurement can be achieved by improving demand and supply planning, plus enhanced supplier management to ensure quality and timeliness of purchased material.
Raw material constraints are forcing LS companies to increase safety stocks throughout the supply chain – from raw materials to material adjacent to their core products (e.g., kits) to finished goods. This trend will also persist through 2023 and necessitates improving the level of efficiency in materials handling and warehousing operations.
Digital transformation can enable improved materials handling and warehouse operations by creating more real-time visibility to current inventory levels, combined with better connections to changes in the demand plans, so changes in inventory requirements can be informed with a deep understanding of “what do we have and how much more do we need.”
Most LS companies have a set of processes – from Plan to Procure to Make to Distribute – that are reasonably well optimized. However, the connectivity across these processes is inadequate, with upstream and downstream impacts not well understood.
We anticipate that LS companies will focus more on optimizing supply chain end-to-end during 2023 and beyond, rather than the current silo-based approach. Digital transformation, data, and advanced analytics will all be in the forefront along with true end-to-end process redesign to achieve a truly efficient supply chain.
As LS manufacturers rely heavily on Contract Manufacturing Organizations (CMOs), and we expect this reliance to increase in 2023 and beyond, it will be essential for the systems and processes within CMOs to connect seamlessly with the entirety of the supply chain process at the LS manufacturer. Examples include which types of materials are procured and used in manufacturing by the CMO, then “sold” to the LS company as opposed to which types of materials should be owned by the LS company and consigned to the CMO. What are the implications from the perspective of quality, regulatory, and financial transactions?
During 2023, we expect to see more focus on improving the integrations between CMOs and their LS customers. It will be essential for LS manufacturers to view Integration as a specific capability.
As supply and financial constraints increase, which we expect to continue in 2023, biopharmaceutical companies must find ways to reduce the amount of waste during clinical trials. This will necessitate better end-to-end connectivity between Clinical Operations, Clinical Supply, Procurement, and Finance, with the aim of having Procurement and Manufacturing plans that align tightly with the shifts in demand during clinical trials.
Future of cell therapy manufacturing relies on well-established supply chain, automation, and digitalization of manual workflow. Next generation manufacturing can help close those gaps. To achieve this end-to-end connectivity will require improved data integration along with end-to-end process redesign, moving away from the current silo approach in place in most organizations.
Bhavin Patel, Tony Stolis
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