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Supply Chain Technologies
The pharmaceutical industry is critical in any country. It is amongst the most regulated and monitored industries in most countries and especially in the United States. Players in the industry and along its value chain have to observe stringent compliance and self-monitoring. Players in the pharmaceutical industries depend largely on supply chain technologies to proactively comply while delivering critical products. As such, the pharmaceutical industry relies significantly on technology to enforce compliance, transparency, and efficiency. Understanding how these technologies affect warehousing, inventory, transportation, and logistics is necessary (Liu, Prajogo & Oke, 2016). Against this backdrop, this paper will discuss supply chain technologies' impact on logistics, warehousing, inventory, and transportation in the context of supply chain management (SCM).
Risks in the pharmaceutical industry SCM
Notably, several risks abound in the pharmaceutical industry and affect the conversion of source materials to finished products and finally what the consumers buy and consume. The first issue is intentional adulteration which can occur due to contamination in storage, manufacturing, or process of distribution. Ingredient substitution for profit gains and is more prevalent with global supply chains in which the pharmaceutical industry falls (Liu, Prajogo & Oke, 2016). disgruntled employees may also engage in adulteration by intentionally contaminating storage, manufacturing, or distribution. Another risk in SCM is theft of cargo and counterfeiting. High frontline involvement of human beings increases the risk of cargo theft as well as counterfeiting of cargo (Moktadir et al., 2018). Fortunately, SCM technologies help increase traceability of the product, early detection of derailed shipments, and compliance with regulatory and corporate group standards.
SCM Technologies
Internet of Things (IoT)
Firstly, IoT provides real-time tracking in SCM. A functional supply chain emphasizes transparency and accountability attributes which enhance inventory and logistics aspects of SCM. GPS monitors as part of IoT devices can now monitor everything including the location of the shipment to its present temperature and providing real-time characteristics of the shipment (Zhou, Chong & Ngai, 2015). Logistics professionals then comprehend how their supply chains function. High-value goods and temperature-sensitive products such as pharmaceutical products benefit from real-time tracking. Imagine a situation where the system issues a warning that temperature-sensitive products are at increased risk of getting spoiled and the system sends a text message alert to the logistics team and the individuals in charge (Montoya, Junior, Novaes & Lima, 2018). Real-time tracking through IoT devices enables mapping of all stages of the chain of custody of the shipment via the use of IoT data as well as device check-ins.
Secondly, IoT enables widespread automation of inventory and warehousing management. Through IoT, businesses can automate more warehouse tasks which increases accuracy, minimize errors and provide better documentation compared to the manual way of processing warehouse tasks. Automation helps reduce the human factor involved in the SCM which is associated with decreased risk for counterfeiting, theft, and contamination. Automation also implies increased efficiency as the automated system can work at machine speed compared to human beings (Singh, Sachan, Singh & Singh, 2020). For instance, RFID tags and RFID scanners can read thousands of items in seconds and save on significant hours that human workers would need to accomplish the same task. In conclusion, IoT enables the linking up of complex devices to internet systems which enhances levels of automation in the SCM.
Thirdly, IoT helps in paperwork management, especially at the logistics level. For instance, truckers may not fill and keep required paperwork. Fortunately, IoT devices and automation helps capture the required data and information electronically ensuring high compliance to established standards of operations. For instance, data capturing apps enable the truckers to simply fill in electronically as they move the products and submit the form electronically. The truckers are freed of having to walk with files of papers and fill (Abdel-Basset, Manogaran & Mohamed, 2018). . Even without the field team being physically present, their data is received as needed. The advantage of electronic data gathering and distribution is that it enables fast data capture and view of the state of the supply chain hourly or daily.
Fourthly, IoT applications in SCM can help to forecast accuracy. Due to wide automation, and real-time data as well as electronic capture of data, a pharmaceutical company can generate its current inventory status including logistics and warehousing status, and make better demand forecasts. Historical data can help predict trends for each year, month, and specific days enabling the company to adjust its inventory to best match demand and lower warehousing costs (Singh, Sachan, Singh & Singh, 2020). For instance, big data analysis and business intelligence of the data repositories will enable a pharmaceutical company to model demand and plan inventory and deliveries accordingly. Overall, IoT increases the scope of data capture, reduces errors in data captured, and ensures fast centralized processing of data and information.
Drones in SCM
The drones in this context are remote-controlled and unmanned low flying vehicles that are small enough for use within a warehouse. Drones are powered by batteries and are piloted in any direction around the target site. Additionally, drones can be fitted with additional devices and sensors to enhance the target operation. For instance, a drone can be fitted with an RFID scanner to read RFID tags on items in a warehouse and update the main database (Vlahovic, Knezevic & Batalic, 2016). The RFID scanner on a drone makes it possible to read items high up shelves where human actors would struggle to access or read.
The application of drones in SCM is an emerging development but there is a limited real-world application of drones in SCM. Drones can be deployed in warehouses to speed up the counting of inventory and optimize paths around a warehouse during the pulling of inventory. Drones can be flown around the warehouse armed with RFID scans and read the RFID tags on the items much faster than human beings. At the warehouse level, reading warehouse items is an involving undertaking without the use of drones even when information technology is deployed (Hii, Courtney & Royall, 2019). The pharmaceutical industry can benefit from the use of drones in warehousing to read the items stacked up on shelves.
Additionally, drones in warehouses can also help enhance the safety of workers. Workers often have to use ladders to scale up shelves and take inventory which is a safety risk and increases the cost of labor. The challenges of accessing high-up shelves can lead to omissions in inventory counting. The use of drones solves the problem as drones can fly high up and accurately read the inventory while eliminating safety risks for humans (Hutchinson, 2019). By eliminating the human's need to take such inventory and associated risks, the use of drones in the long term can help lower the cost of labor in the company while promoting efficiency.
In some limited instances, drones can do deliveries rather than use trucking. In hard-to-reach places, drones have helped deliver pharmaceutical products. For instance, in Rwanda drones have made deliveries of pharmaceutical products within a 100 KM radius enabling fast delivery in difficult to reach places. In the future, the capability of deliveries by drones will help ensure deliveries in difficult to access places across the world or during emergencies in places with no accessible roads or paths (Güner, Rathnayake, Ahmadi & Kim, 2017). The use of drones cuts on delivery time significantly which is critical in difficult-to-read places.
Artificial Intelligence
Firstly, AI can transform SCM by setting the stage for semi-autonomous or fully autonomous SCM. The use of AI in SCM can help optimize inventory. Pharmaceutical companies tend to procure excessive inventory to guarantee 100% fulfillment which makes managing inventory challenges. An increasing number of companies are expected to embrace digital SCM. For pharmaceutical companies, circumstances may force them to stock unnecessary inventory as they intend to ensure constant availability of the products that are critical to human life. Unfortunately, it is common for pharmaceutical companies to encounter significant losses of inventory in the form of discarded expired inventory (Merkuryeva, Valberga & Smirnov, 2019). Overall, pharmaceutical firms are predisposed to poorly manage inventory but AI can help reduce wasted or discarded inventory.
Secondly, AI can help address the issue of long cycle times in SCM of pharmaceutical firms. In the pharmaceutical industry, cycle times can extend into hundreds of days. Additionally, it takes at least four months for drug products to move to the distributors before reaching the dispensers and finally to the patient. AI can help SCM by making information visible across the supply chain to help optimize inventory. The application of AI will help reduce overages and shortages as well as lowering cycle time (Yousefi & Alibabaei, 2015). Through the application of AI, the pharmaceutical will shorten the cycle times by reading and projecting likely demand that is specific and enhance the efficiency of SCM.
One way that AI can improve SCM in the pharmaceutical industry is by enhancing available-to-promise accuracy. The status quo requires available-to-promise functionality depending on a rules-oriented computation via theoretical lead times including highly variable allocation rules. The data points in the traditional model for computing available-to-promise lead to misleading available-to-promise dates. Applying AI can help enhance the accuracy of available-to-promise by automatically generating a supply chain map that outlines details regarding an order. AI can distribute accurate suggestions and predictions premised on machine learning and data science by incorporating key metrics such as allocated quantity and delivery data (Settanni, Harrington & Srai, 2017). Overall, AI can revolutionalize SCM in the pharmaceutical industry.
For emphasis, AI will ensure accurate management of inventory. Management of inventory inaccurate manner will ensure the correct flow of items that are inbound and outbound of a warehouse. Variables related to the management of inventory such as processing of the order, packing, and picking are time-consuming and present a high risk for error. Ensuring accurate management of inventory will ensure overstocking is avoided as well as inadequate stock and unexpected stock-outs. AI-based tools have a high ability to manage mass data and can provide effective management of inventory (Papert, Rimpler & Pflaum, 2016). AI systems can interpret and analyze a significant number of datasets fast and give timely guidance on projecting demand and supply. Such systems can predict and learn new habits of customers using intelligent algorithms as well as project seasonal demand.
In detail, AI application to SCM will help attain warehouse efficiency. Having an efficient warehouse is an integral component of the supply chain as well as automation and can help in the prompt retrieval of an item from a warehouse which is critical for seamless delivery to the customer. Additionally, AI can also resolve multiple warehouse issues more accurately and quickly compared to humans. Integration of AI in warehouses can also simplify complex procedures as well as speed up tasks helping conserve valuable time (Ahmadi et al., 2020). Overall, AI use in warehousing operations will help reduce the cost of, need for warehouse staff.
Robotics
Robotics integrated with information technology can help enhance SCM in the pharmaceutical industry. Autonomous robots can be designed to carry out tasks independently eliminating the need for human intervention. Such robots vary in size, dexterity, mobility, and AI including cost. Including AI components in autonomous robots will enable them to learn and make new decisions that a human actor would have made. Such robots can help enhance the accuracy and the speed of routine operations particularly manufacturing and warehousing (Chetthamrongchai & Jermsittiparsert, 2020). Robots can also be used to enhance efficiency by working side-by-side with humans. Replacing human actors with robots will help eliminate the risk of employee injury and lower the cost of labor in the long run.
Notably, autonomous robot use helps companies enhance worker productivity. Workers working with robots will move items in the warehouse faster compared to working without robots. The use of robots enables workers to cut down their work time significantly ensuring fast completion of tasks which translates to fast delivery and processing times. Additionally, robots enable workers to quickly carry out tasks that involve high safety precautions as robots can work at machine speeds while taking into account all variables (Loy et al., 2016). As such, workers can handle sensitive goods faster using robots compared to the status quo of not using robots in SCM.
Similarly, the use of robots helps reduce the error rate in the area that the robot is deployed. A robot deployed in moving goods will goods as programmed at all times eliminating errors that arise from monotony and fatigue of human actors. Robots will deliver as programmed even when working under high-risk environments which make them critical in enhancing efficacy in the supply chain. A robot scanning inventory that includes high up stacked up inventory will complete the job with no errors as programmed despite the safety risks that would hamper human actors (Keow & Nee, 2018). Overall, a robot is not affected by fatigue, monotony, distractions, and sensitivity to safety that may hamper human actors leading to errors.
Correspondingly the use of robots lowers the frequency of inventory checks. Human actors are prone to commit errors or omissions and commission when handling inventory. The errors may be intentional or inadvertent. Fatigue, monotony, coping with changes, and the emotional state of human actors influence their level of accuracy and diligence when handling inventory. The use of robots helps reduce or eliminate errors associated with monotony, fatigue, changes, and emotional state. Robots work as programmed and work at machine speed enabling one to attain significant levels of processing with minimal or no errors (Mathy et al., 2020). Warehouses that deploy robots will have few or no errors regarding the processing of inventory.
Expectedly use of robots helps enhance sorting, picking, and storing times. Robots work at machine speed when sorting, storing, and picking items which help increase productivity at shorter periods. As indicated, robots work with minimal errors and can perform several tasks at the same time. The use of robots in storing, picking, and sorting can help reduce the cost of labor and time needed to accomplish a task significantly. A robot can store a significant amount of information or link to databases when working enabling it to make updated decisions while working (Dauod et al, 2019). Overall, the use of robots in warehousing improves efficiency and lowers the cost of operations.
Equally important is the use of robots in manufacturing helps ensure fast order fulfillment. Robots incorporated in manufacturing or production can help fulfill orders within a short period helping avert stock out instances. With robots in place, tighter management of inventory can be achieved as robots integrated into production will enable fast fulfillment of new orders. Manufacturers that have deployed robots can easily scale up production to satisfy new demand and avoid the risk of producing excess inventory that is not guaranteed buyers (Mathy et al., 2020). Pharmaceutical companies may produce excess inventory as such products are critical and a shortage is not supposed to arise. However, incorporating robots in manufacturing can increase flexibility in manufacturing.
Through the use of robots, in-house transport can be automated. In manufacturing, environmental items need to be frequently moved within the production site and human actors are used to moving these items. Robots can help move semi-finished products from the warehouse to the line of production. Robots can also move unfinished goods from one department to another and can also move finished goods to the warehouse. Special types of robots known as autonomous robots utilize an intelligent system to navigate with inbuilt sensors and cameras that help them avoid colliding with other objects at fast speeds (Keow & Nee, 2018). Robots are capable of pursuing the least cost and efficient route when performing such tasks.
Automating warehouses
Warehouses that are automated have converted their manual and semi-manual processes to automatic processing. The target for automation is routine processes. Putaway and retrieval functions in warehouses for finished pharmaceutical goods including case picking can be fully automated. Storage and retrieval machines are some of the available technologies that can substitute working conventionally using standard fork-trucks. Instead, articulating-arm robots for activities involving case picking are usually combined with sortation and conveyance equipment to carry out the same task. A firm needs to consider goals of labor savings including workers' safety and compliance with regulatory demands before pursuing automation (Sharma, Kaur & Singh, 2020). Creating a smart warehouse may start with automating the putaway process and companies can deploy a pilot program that incorporates self-driving pallet trucks that substitute manual forklift moves from dock to storage.
While automation is justified for a large volume of products, automation can also be qualified for low volume but high-value products that need sensitive conditions such as blood plasma and vaccines. Finished pharmaceuticals need automated movement in warehouses to ensure better tracking of products as well as serialization of products and capturing of this information for everything leaving a warehouse. There is a need to scan a product at the sellable level via multiple tracking devices as well as full data capture is critical (Rimpiläinen, 2019). Overall, automation is almost regarded as the fundamental level for the sophisticated application of SCM technologies such as AI, robotics, and drones that built on gains made from the automation of SCM.
Additionally, pharmaceutical products often involve smaller but critical shipments that form part of digital shipments. Handling the smaller shipments require automation using third-party logistics partners that manage the distribution of smaller orders. For instance, a small shipment of pharmaceutical products may need to be delivered directly to home care, clinics, and physicians. However, third-party logistics partners require contracts that long for a significant amount of time to justify the automation of their operations that form part of SCM for pharmaceutical companies (Nabelsi & Gagnon, 2015). The new developments in the pharmaceutical industry are favoring delivery from manufacturer or warehouse to the client and the implication of the identified trend requires increase automation of warehouses to efficiently handle smaller volumes of the general inventory.
Conclusion
In conclusion, SCM technologies impact logistics, warehousing, inventory, and transportation positively in the long term. Automation of SCM and especially the integration of IoT has introduced features in SCM that enable real-time tracking of movement of inventory as well as capturing data on the go helping reduce delays and inconsistency in data captured. With IoT and automation SCM can attain accurate predictive analysis and manage inventory more efficiently. Drones can be fitted with sensors and RFID scanners and help in reading inventory as well as limited delivery in difficult to access areas. Lastly, AI enables SCM to become fully automated and autonomous in working while delivering the desired outcome. Overall, SCM technologies help enhance the transparency and visibility of SCM in the pharmaceutical industry.
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