In the world of bringing a pharmaceutical product to market, supply chains play a vital and multifaceted role, ensuring the seamless flow of materials, timely delivery of products, and adherence to regulatory requirements across complex global networks. A McKinsey study states, “…On-time delivery generally is not a problem. On-time, in-full (OTIF) fulfillment levels are 97 percent. Clinical drug supply professionals corroborated these findings, as they focus primarily on not missing doses…On the other hand, waste levels for investigational medicinal product (IMP) kits reached a concerning 50 percent, driven primarily by poor forecasting and planning—highlighting a significant opportunity to capture value.” (mckinsey.com).

Just like a Commercial Supply Chain, a Clinical Supply Chain has multiple interconnected nodes and inherent complexity at a global level from the moment the first patient is enrolled. Naturally, the volume of product requirements is relatively low, so the Supply Chain is not yet experiencing high-volume operational constraints and intensive resource requirements. Nevertheless, a continuum of capability building should be present. The reason is simple: there are already escalating costs and potential risks that must be proactively anticipated and mitigated. 

Figure 1 below illustrates the relationship between complexity and time for two variables: The technical readiness of the product itself, as well as its manufacturing, and Supply Chain Maturity. It highlights the interplay between product development and supply chain scalability, emphasizing the challenges and transitions leading to commercial readiness. 

Figure 1. Clinical Supply Chain Complexity vs. Technical and Clinical Uncertainty

The point of the illustration in this figure is to simply acknowledge an evolving landscape across the domains of technical development, clinical uncertainty, and the supply chain’s increasing complexity over time. In many respects, technical and clinical complexity are also increasing, so this is not to suggest otherwise. However, for clinical supply chain purposes, over time, more unknowns are becoming at least directionally better understood and more easily shared by the clinical and technical development groups. For the supply chain, this makes the biggest difference as they are now receiving more robust input to make decisions and establish operational capabilities.

Let’s decompose the Clinical Supply Chain into its parts, see Figure 2 below.

Figure 2. Primary nodes in the End-to-End Clinical Supply Chain

While the 4th segment of the Supply Chain in Figure 2 above is the most visible and widely appreciated outside of the CMC function, a great deal of the supply chain risk lies in nodes 1-3. Commonly, there is a management separation from a Supply Chain point of view at node 3. In other words, nodes 1-3 are managed under one Supply Chain governance, while node 4 is managed under another.

This division makes sense from a workload perspective, but it does create two domains of competency that are not always fully in sync. Let’s discuss improved alignment across these segments.

Achieving Better Clinical & Operations Alignment

An often overlooked, but impactful governance mechanism that can be used to maintain alignment across these functions is a Clinical & Operations Planning (C&OP) process. Typically used for Clinical and CMC alignment, this process actually supports alignment within CMC and outside of it. The key is that cross-functional participation and learning about each function’s key drivers enables streamlined integration of the ever-evolving plans. 

The reality is that Clinical Supply Chain sits in-between to highly variable environments; i.e. CMC development and its inherent variability and clinical operations and its equally variable nature. The position and effective role of the Clinical Supply Chain is illustrated in Figure 3 below. 

Figure 3. Clinical Supply Chain as the link between two evolving functions in the development and clinical trial phases

The role of the Clinical Supply Chain is, therefore, to smooth both sides, de-risk critical connection points, and sustain a stable supply to Clinical Operations. These particular processes closely mirror those linking complex Commercial Supply Chains, offering an opportunity to build capabilities by leveraging ‘light’ Commercial Supply Chain tools and methodologies. These may include Supply Chain Management dashboards, forecast accuracy measurement, performance-to-plan tracking, and others. All of these being core elements of a well functioning C&OP process.

Following this ‘light’ tools approach can significantly enhance a teams’ readiness to support growth, establish risk management processes, and develop future capabilities.

A great example of establishing and operating on-going alignment through C&OP is the Clinical Supply Chain function clearly articulating its information and timing requirements on a recurring basis and through the formal forum of C&OP. A simple diagram of these parts coming together is illustrated in figure 4 below.

Figure 4. The simple elements that are core to a successful C&OP

The formal forum is needed because the clinical supply chain function has to do this in both the CMC and Clin Ops directions since the information needs are to align both.

The processes are ongoing, but there are critical information elements that have critical timing implications. Many of these information elements seem simple to the originator of the information (CMC or Clinical Ops) but they are critical to the clinical supply chain. Things like expected yield, timing of output, and target quantity. From Clin Ops, these may include expected first patient in, dose, and number of patients.

There is always hesitation to provide some of this information given the uncertainty in the processes, and again, this is the case with both CMC and Clinical Ops. This is understandable, but a good rule of thumb is that it may take 12 months for a supply chain to produce and make a product available. While this number can vary, it is helpful to think in this order of magnitude since it is indeed a long time to get a product from beginning to end.

In the world of the Clinical Supply Chain and given these long timeframes, an uncertain number is better than a more accurate one too late in the process. For examples like this, C&OP as a consolidated forum is indeed the best practice as a formal governance process to enable optimized alignment across clinical and supply chain operations.

Wish to discuss more about this subject and how ScaleUp Inc can help you with Clinical & Operations Planning (C&OP) in Clinical Supply Chains? Schedule a quick connect with Marcos Buelvas here.

Author – Marcos Buelvas, Managing Director, ScaleUp Inc

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Despite the criticality of the answer to these questions, that information is not at the fingertips of executives, leaders and personnel. Needless to say, this should not be the case.

The problem is not exclusive to large pharmaceutical companies with multiple business units and thousands of SKUs; it also shows up in clinical-stage, pre-commercial companies, and companies about to launch products. The challenge manifests very differently of course, if we are talking about a large company vs. a small one, and everything in-between. The drivers differ, and so does the decision-making process. 

However, there is hope. This is not a complicated process, but it does require some doggedness and attention. This is best described with an example, so let us look at small biotechs. These teams are mostly under-resourced and uber-busy fighting fires. What falls to the wayside is time to think through where and how to start attacking the problem of building capability, process and tools that are cost-effective, easy to use, and implement. They often give up before simple barriers simply because they don’t have someone to turn-to (e.g., an excel formula, a template for suppliers, emails and quick working sessions to round people up).

4 easy steps to address the problem

Let’s start by breaking down the process:

1. Obtain inventory status from each supply chain node at the end of the month
2. Aggregate key inventory data elements into a data repository
3. Link data repository with a reporting engine (e.g. PowerBI, Tableau, Excel)
4. Establish a recurring review and inventory adjustment process

Believe it or not, what will determine the success of this process is step 4, and by the way, that step can be as short as 30 min/month once you get it IN CONTROL. This is absolutely critical because the superb principle at work here is the one popularized by Lean-Six-Sigma about shining a light on something. You shine a light on this, and it will run. The prior 3 steps are also quite easy to run once implemented.

For Step3, the reporting/analytical engine provides robust insights using tactical visualizations and using the right reports makes a world of difference in how pain points are identified and how teams drive decision making.

Here is an example of a simple visualization technique that can substantially impact operational teams and execution.

The above chart, while simple, is a horizon view of expiry across a product portfolio and supply chain nodes. This will enable your personnel enough time to react Vs the alternative of learning expiries within 1-2 months of when it happens. Even small companies can manage and produce this type of insight very easily with expert support. It makes a huge difference to visualize expiries across the horizon Vs present it on a simple list. 

What if the inventory review process is not followed?

This process is not running consistently in a large percentage of companies. Given the simplicity of this, why is it not running everywhere?  As I said earlier, it is not running consistently because of simple things that teams just can’t get passed. I apologize for repeating myself here, but it can be an excel formula, a template for suppliers, the emails and quick working sessions to round people up.

Another powerful angle to doing something in this area is the support you will get from your Finance department. In my opinion, they should be the first to get in your corner. They will definitely support what you may need to get this process up and running. Their lives will be that much easier and the confidence in where the business stands in this critical dimension will substantially improve.

There are some infamous examples of the staggering cost of failure in this department, and I am sure some of these will resonate, but I can only highlight a few because there are too many scenarios to cover.

• Near-term product expiry at clinics leaving no time to react (e.g., next month)
• Short supply of bulk material to run the next batch and development requirements
• Not enough inventory reserved for a specific batch for a particular study
• Not enough components (e.g., vials, syringes) to perform the last step of the process

The implication of any of these scenarios can derail a program, a launch or commercial operations and ultimately impact patients. The fix is simple and may only require a little nudging from a concerned executive or leader. Get ahead of this one; inventory is like cash…you really don’t want to run out of it.

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