Ecosystem Innovation for Pharma Supply Chains

Ecosystem Innovation for
Pharma Supply Chains
GBX Events
Supply Chain Innovation Summit 2019,
Barcelona, 21 November 2019
Shaun West & Michael Huonder

Ecosystem Innovation for Pharma Supply Chains | Supply Chain Innovation Summit 2019 Barcelona | 21 November 2019|Shaun West & Michael Huonder 2
Introduction
Who are we and what do we do?
Mail me at: shaun.west@hslu.ch
Industrie 2025, F&E Konferenz zur Industrie 4.0 |Jürg Meierhofer & Dr Shaun West
For more information please visit slideshare.net/ShaunWest
Who we are…
A multidisciplinary group from four universities in two countries
2
Projekt4 2.8.2007 19:17 Uhr Seite 1
Senior Lecturer
Industry 4.0
Coordinator Platform
Executive MBA
Dr. sc. techn. ETH (PhD)
Jürg Meierhofer
8401 Winterthur, Switzerland
Rosenstrasse 3, P.O. Box
www.zhaw.ch/idp
www.zhaw.ch/=meeo
juerg.meierhofer@zhaw.ch
Phone direct: +41 58 934 40 52
School of
Engineering
IDP Institute of Data Analysis
and Process Design
Zurich University
of Applied Sciences
Jürg Meierhofer
Expert Smart Service Engineering
https://ih1.redbubble.net/image.206903471.7035/mp,840x860,gloss,f8f8f8,t-
pad,1000x1000,f8f8f8.u2.jpg

Ecosystem Innovation for Pharma Supply Chains | Supply Chain Innovation Summit 2019 Barcelona | 21 November 2019|Shaun West & Michael Huonder
… to show how the ecosystem perspective provided new insights
How can the ecosystem
mapping process be
improved to develop better
understanding of market
dynamics for better decision
making by investigating two
pharmaceutical supply
chains?
… to show the current state of pharma supply chains
Purpose
… existing models for supply chains over oversimplify the situation
and failing to integrate people, processes and digital technologies
Problem
Introduction
Ecosystem Innovation for Pharma Supply Chains
3

Background
Supply chain in the past was so simple
Linear value chains with 1-to-1 relationships
4

Background
Supply chain in the past was so simple
But was it ever really so simple?
5
https://clarisconsulting.net/update/wp-
content/uploads/2018/09/Simple.jpg

ity
©2018Mapping:West,Müller-Csernetzky,Huonder
n of many value networks
Background
We have moved from command and control to team of teams
Supply chains are more like team-of-teams we cannot control everything anymore…
6

Background
Patient centric means “push” will no longer work
Supply chains are largely production-centric and fail to capture patient consumption
- Develop patient centred understanding
- System-dynamic models are needed
- Inefficiencies exist across the entire supply chain
https://lh3.googleusercontent.com/iRfvOPpodMiTiwDWGP6zAF9
P_ZAbq8Kg0ro9X9NNmlOcqo3nPaI6sUf07OFCKw7bz3e45YI=s85

Background
Supply chain is about service co-delivery
Goods and services are mechanisms to render the service, which is the real basis of exchange
- Service is the application of knowledge and skills to
provide benefits to others
- Provision of service and co-created value with
customer is defined by final user in a unique way
https://lh3.googleusercontent.com/sN1tgGRbKgwTw_LOfOq_KizDZ92R8
EwATzAnbmEJ5O81QiHYTC_nHvC71ByGpnorD9PI=s92

Background
Business Ecosystems are relevant to the new approach that is needed
Shift from regarding mapping as ‘nice-to-have’, to considering it as integral part of operations
- Loosely connected community in different levels of
organizations that share common goal and co-evolve
- Fragmented and characterised to its different terms,
common terminology enables higher-level learning
https://lh3.googleusercontent.com/R49Uj9hHrl54L3DTlaiKCccz4HZe
SNcWKWEEQNL92vUwNpoUfxMn79CEW7VGLjn41b7Cgg=s90

Two countries, two cases and many opoortunies for confusion
Methodology
We used interviews and cases to understand the challenges
Case work Interviews Analysis

Case work
Drug journey through the ecosystem in a mature market
Many different
governmental
organizations involved
Focus on cost
explosion and
efficiency
Decentralized system
with more actors
Material A
Packaging
Equipment
Material A
Qualified staff
Regulator
Production
Maintenance
Distribution
Hospitals
Contracted
production
Pharmacies
Patients
A formal structure with more predicable demand

Case work
Drug journey through the ecosystem in a mature market
Stable, regulated markets are ripe for disruption
- Stable growth
- Decentralized and complex healthcare system
- Incentives on optimizing healthcare system
- Ecosystem mapping for innovation
Case work
Drug journey in a mature market
Many different
governmental
organizations involved
Focus on cost
explosion and
efficiency
Decentralized system
with more actors
Material A
Packaging
Equipment
Material A
Qualified staff
Regulator
Production
Maintenance
Distribution
Hospitals
Contracted
production
Pharmacies
Patients
A formal structure with more predicable demand

Case work
Drug journey through the ecosystem in an emerging market
Regulator
Production
Distribution
Hospitals
Contracted
production
Pharmacies
Patients
Regulator
Customs
Official
High influence of
regulators and
government
Rapid developing
market with high
expectations
More central
regulated system
Hidden ‘ecosystem services’ were more important in the supply chain - relationships

Case work
Drug journey through the ecosystem in an emerging market
Building ecosystem service and hinder access for others
- Rapid development of healthcare
- Central governmental engagement
- Incentives on scaling up healthcare system
- Ecosystem mapping as market access tool
Case work
Drug journey in an emerging market
Regulator
Production
Distribution
Hospitals
Contracted
production
Pharmacies
Patients
Regulator
Customs
Official
High influence of
regulators and
government
Rapid developing
market with high
expectations
More central
regulated system
Hidden ‘ecosystem services’ were more important in the supply chain - relationships

Do we really live in a ‘connected world’?
Interview findings
I need to know where my stuff is and where it is needed
Implementation of demand driven supply chain
models can provide more flexibility
Focus must be on people, processes and
enabling technologiesLack of structured market
assessment frameworks
Development of control towers to connect
separate data lakes to one single source of truth
Design driven approaches can combine existing
sources of information
Developing an ecosystem can be dangerous
because it might already be obsolete

Analysis
So what does this mean for me?
We need to optimize revenues and margins with constraints
We have to gain system wide views
… so we visualize the challenges
… so we don’t make the same mistakes again
… so that we can continue to learn and adapt
https://lh3.googleusercontent.com/MC9zT5VtNePOYhoK7RxSLZX8EBc
9R893DsPMTQ1UHDXshdf-Prkc40VKwHGjdHoQdCUTsXo=s90

Analysis
Where is my stuff and when will it arrive?
We have to know where stuff is going
… so we need to integrate different sources
… so we need ‘shared’ transparency
... So we understand implications of decisions
https://traintimes.org.uk/map/tube/

Analysis
Understand and manage ‘ecosystem services’ and keep flexible so tthat you can react
Many ecosystem services are taken for granted
… so you need to have different scenarios ready
… so you can be proactive with ‘what if…’
… so that you can replace ‘ecosystem services’
https://lh3.googleusercontent.com/-
ekreG8J8Q54rkGQpxSPdBmPwDDuJsjuZbJ41F3bZgJYi1rsGFUdGYoSrKDK_YDE_4VuwA=s142

Food for though
Who does this well today?
Can you afford to be frozen out? Remember that these firms deliver directly to the customer…
https://lh3.googleusercontent.com/F92ap2FYhGPYTzoW0QaVRFJP9XowltL
Ap-0sCKe7b3xA2JJl3roe3gWIscmo9aO2gWl4ug=s152
https://lh3.googleusercontent.com/gGu8Q-
7C5Z7UEofsBfHfIMeO1nDgOM20l4TdPGkjHTRAkXII9iHz-A53iZR6dyj_5yPd=s128

Closing
Lessons learnt
We need to start to map and
then to model the
ecosystem. You will be able
to make better business
decisions and will become
more agile
Linear supply chains do not represent reality
Ecosytem mapping helps us to make more informed decisions
Visualize your ecosystem and start the discussions
Ecosystem map can merge existing paradigms

THANKS FOR YOUR TIME!
VISIT WWW.SLIDESHARE.NET/SHAUNWEST
OR MAIL ME AT SHAUN.WEST@HSLU.CH

Ecosystem Innovation for Pharma Supply Chains

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