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With the global pandemic making it abundantly clear just how crucial end-to-end supply chain visibility truly is, a recent report from Cloudleaf and Sapio Research highlights the obstacles companies face in trying to achieve those target visibility levels.
For their “State of Supply Chain Visibility” report, the companies surveyed supply chain decision makers in the pharmaceutical and food & beverage industries. From the exercise, they learned that 92% of companies claim they cannot trust the data they have on product traveling through their supply chains.
“The findings expose decades-old blind spots in supply chains as the root cause of costly problems,” Cloudleaf points out. “This is particularly true for maintaining cold chains, which come with the added challenge of keeping product at a specific temperature throughout its journey to the end consumer.”
Manual Processes Still Prevail
Along with expressing concern over major gaps in supply chain visibility, respondents also revealed that pharmaceutical companies alone are losing between $95 million and $138 million annually on average in medical inventory spoilage due to failures in the cold chain. Cloudleaf says food & beverage companies are losing between $71 million and $179 million for the same reasons.
According to Cloudleaf, some of the pharmaceutical industry’s visibility problems can be traced to the fact that it’s historically lagged in the digital transformation department when compared to other industries. In fact, it says 99% of its survey respondents are still using some form of manual process to achieve supply chain visibility. More specifically:
- 45% are using spreadsheets
- 35% are using pen and paper
- 27% are using alarm clocks
“This means many stakeholders along the supply chain are reporting on issues after the fact and not in real time, which means they aren’t able to take preventative measure,” Cloudleaf points out.
The survey also found that product damage or spoilage (30%), temperature excursions (25%), unexpected delays (24%), lost or misplaced inventory (21%), and compliance issues (20%) are the top five current supply challenges plaguing the industry. Overall, 87% of respondents in the pharmaceutical industry said they do not have 100% visibility into the condition of products in their supply chain during the last mile of delivery.
“The COVID-19 pandemic has made abundantly clear how crucial end-to-end supply chain visibility truly is. The findings of this report illustrate a crippling reality for high value supply chains and cold chains today,” Cloudleaf’s Mahesh Veerina said in a press release.
“A vast majority of companies recognize that the traditional methods of monitoring product as it travels through the supply chain simply do not offer the visibility necessary to ensure quality and compliance,” Veerina continued. “Reliable end-to-end visibility is a capability that cannot be compromised in the highly regulated pharmaceutical and food & beverage industries.”
Managing Complex Global Networks
Pharmaceutical companies rely on a complex global network of suppliers, logistics providers and manufacturing organizations to get their products to the people and patients that need them. The industry also contends with strict regulatory requirements in its supply chains, such as tracking and tracing products, as well as maintaining consistent temperatures while being stored and in transit for optimal safety and efficacy.
These activities will all come to the forefront in 2021 as nations around the world mobilize extensive vaccination efforts for their populations. In absence of good supply chain visibility, these efforts could be delayed or even thwarted as this monumental undertaking is rolled out globally.
“The implications of these [survey] findings are significant for their operational and financial impacts as well as the final customer outcomes,” said Cloudleaf’s David Parker. “Food & beverage as well as pharmaceuticals rely heavily on cold chains that are meant to keep products at specific temperatures to maintain their safety, quality, efficacy, and regulatory compliance. Modern digital technologies are rapidly automating visibility and deliver predictive remediation actions using AI/ML to avoid the millions of dollars companies are losing and deliver better experience to their customers.”
