From Shortages to Surpluses MedTech and Pharmas Demand Planning Remedy

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From Shortages to Surpluses: MedTech and Pharma’s Demand Planning Remedy

2 minute de lecture

In the current business environment, a company’s global supply chain can make or break its success, regardless of industry. The stakes are especially high, however, for pharmaceutical, medical device, and health care manufacturers and distributors. If planners fail to accurately match supply with demand, the results are product shortages, scrapped inventory, cancelled procedures and patient health risks. These manufacturers and distributors absolutely need to get their forecasts, inventory levels and supply strategies right.

In today’s volatile, disrupted supply chain environment, that’s easier said than done. Life sciences companies operate across a globally dispersed manufacturing and supplier network. Materials shortages are common. Natural disasters, socio-political conflicts and other events interfere with their ability to deliver products to where they’re most needed.

Challenges also exist on the demand side. Manufacturers have moved products closer to end patients to minimize delivery time and costs — but that has only added to the complexity of demand variability. Forecasts must consider shelf life, product serialization, changing regulations and jurisdictional requirements. Increased access to health care, changing modalities and demographics — such as an aging population — are other forces that impact consumer demand. Significant market events — including breakthrough product introductions, regional disease outbreaks and public health emergencies — can also influence demand.

All these supply and demand dynamics place life sciences companies in a tough situation. If they forecast too low, patients won’t get the products that can positively impact their health. If they forecast too high, they’re left with excess inventories, outdated products and high levels of waste.

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Diagnosing the problem: Siloed, outdated planning processes

These are big challenges. But the real problem is that most pharmaceutical, medical device and health care manufacturers are applying outdated demand planning technology, manual analysis and static planning cycles that fail to recognize the dynamic nature of modern health care, medical and pharmaceutical demand.

And, while their supply chains are complex, dispersed and global in nature, many life sciences manufacturers are using siloed planning tools, processes and data. The extended supply chain can’t react to demand changes in a rapid, orchestrated manner because most stakeholders lack real-time visibility and awareness of demand plan updates.

Static traditional planning cycles are also an issue. Pharmaceutical, medical device and health care markets are fast-paced and dynamic. New trends, disruptions and consumer needs unfold in real time. That means these companies need a real-time, dynamic way to constantly update forecasts, as well as rebalance supply and demand.

To build resilience into their supply chains, demand planners must stop relying on outdated forecasting tools, manual processes and planning methods that simply weren’t built for today’s urgent challenges. Because the complexity of demand planning today exceeds human cognition, planners need to instead rely on the power of advanced artificial intelligence (AI) and machine learning (ML) to determine an optimal plan — as well as replan, dynamically and continuously, as conditions change.

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Blue Yonder Cognitive Demand Planning is the perfect prescription

This vision sounds hard to achieve, but Blue Yonder has invested in developing the ideal cure. Enabled by AI and ML, Blue Yonder Cognitive Demand Planning helps life sciences companies simulate real-time market conditions, generate actionable insights and prepare for seamless, collaborative execution across the supply chain.

This solution enables the industry’s demand planning teams to significantly improve forecast accuracy, make data-driven decisions, identify disruptions at an early stage and enact a rapid, orchestrated response. In fact, Blue Yonder 

Cognitive Demand Planning has been proven to reduce inventory levels by up to 25%, while ensuring product availability and on-time delivery. Reducing inventory levels frees up capital that can be invested back into the business for increased innovation.

Let’s take a deep dive into three advanced capabilities that help improve the health and well-being of demand planning processes:
 

  • Improved analysis, supported by causal simulation. Life sciences companies are inundated with data about historic demand, supply constraints, regional public health trends, regulatory developments, competitor moves, world and local news, economic indicators, weather…the list goes on and on. Blue Yonder Cognitive Demand Planning ingests hundreds of demand-driving variables, then makes intelligent, data-driven recommendations. Next, it enables planners to simulate a specific decision path and see the likely outcome — before executing the plan. Blue Yonder’s predictive models and statistical algorithms give planners visibility into the cause-and-effect factors that drive the forecast, creating explainability for perhaps the first time. No matter how many demand drivers there are, how many products are involved, and how many time horizons are considered, this solution can improve forecast accuracy by up to 20%.
  • A unified, multi-enterprise planning process. The modern life sciences supply chain is composed of multiple suppliers, co-manufacturers, resellers and other trading partners. To ensure true end-to-end agility and responsiveness, the demand plan must be shared across this network in real time. Blue Yonder Cognitive Demand Planning is built to allow cross-functional and even multi-enterprise planning. It connects all partners with real-time data and invites them into decision-making processes, accelerating execution and ensuring delivery accuracy. All stakeholders have a clear view of demand signals, production needs and distribution plans — for a single version of the truth. The entire supply chain works together to profitably deliver the right critical product to the right place, and the right patient, at the right time.
  • Dynamic and productive real-time planning. Forget manual processes, time-consuming and error-prone human analysis, paperwork and static planning cycles. Blue Yonder Cognitive Demand Planning drives incredibly rigorous, AI-enabled analysis that produces recommendations in mere minutes. It not only accelerates decision-making — so planning becomes a continuous, dynamic process — it also increases planner productivity by up to 75%. Planning lead time is cut from weeks, days or hours to just minutes, enabling a new level of real-time responsiveness to market changes. Many processes are automated, allowing human planners to do what they do best: Create value by managing assumptions, adding new causal factors, and otherwise fine-tuning the solution’s inputs and outputs.

 

Discover the cure for demand variability

The life sciences industry is evolving quickly, along with the rest of the world. While today’s fast pace of change has brought supply chain challenges, it’s also enabled manufacturers to introduce exciting advancements in biologics, advanced therapies, smart devices, robotics, wearables and other areas that dramatically improve patient outcomes.

Just as pharmaceutical, medical device and health care manufacturers are at the leading edge of product technologies, it’s imperative for them to embrace that same spirit of innovation across their supply chains — particularly in the complex activity of demand planning. Modern capabilities from Blue Yonder are already enabling the world’s leading life sciences companies to achieve healthier, more profitable financial results, while also delivering life-changing benefits to patients and medical teams.

Leveraging Blue Yonder Cognitive Demand Planning to align supply and production planning with real-time demand signals is the cure for today’s unprecedented demand variability. Learn more about Blue Yonder’s demand planning capabilities for MedTech and Pharma, or contact us to start a conversation about your unique challenges and opportunities.