Building a Digital Superhighway DIGITAL REPORT 2021
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BUILDING A DIGITAL SUPERHIGHWAY
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We speak to pharmaceutical leader MSD (Merck in the US and Canada) about digitising the supply chain and their global blockchain innovation programme
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SD's origins go all the way back to the 17th century, when Friedrich Jacob Merck purchased a drug store in Germany, which later evolved into a drug manufacturer. Today it is not only one of the world's largest pharmaceutical companies but is also one of the world's biggest companies in any sector, ranked 69 on the 2021 Fortune 500 list. Five years ago, MSD began a digital transformation programme, with the aim of accelerating growth and modernising operating models across the business, including the supply chain. Paolo Migliari, Executive Director Supply Excellence and Head of Connected Channels Global Blockchain Programme explains that the patient is at the core of the digital project. "Everything we do in terms of digital transformation should be patient-centric. Whatever we build in our digital portfolio must have the patient at the centre." MSD has a "plant to patient" programme with four key priorities: leveraging data to enable automation and move towards more advanced analytics; streamlining decisionmaking and ways of collaborating; focusing on growth drivers; and innovating with Blockchain technology to create additional value. A key goal is to get products to the patients as fast as possible, as well as reducing overall cost and friction. "We are building solutions
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to make the supply chain more secure and of higher quality, by helping other institutions help with patient adherence" Migliari adds. "The aim is to create an ecosystem that will allow usto make this possible." Within MSD's digital transformation is a digital logistics programme. Fredric Brut, Head of Supply Chain for EMEA and APAC, explains: "Supply chain transparency and real-time visibility of inventory positioning and movement, driven by increased value of freight, time and temperature sensitivity of the product portfolio, and potential for freight diversion, offered an opportunity to engage in more real-time alert track and trace technology.” In 2015 MSD began to review its technology, and invited TransVoyant on board as a partner to provide IoT capabilities. TransVoyant provides a consolidated data platform that helps MSD track products through IoT (Internet of Things) monitoring services, that offer real-time visibility and responsiveness in terms of shipment position, temperature, light and other critical aspects of shipping. "TransVoyant is a key partner for us," Brut says. "We leverage their digital technology in a cloudbased platform, to drive data integration, return shipment visibility, lane risk assessment and predictive analysis. It's a really great application and service for us to track our products through. and with some 3rd party warehouses”.
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See. Understand. Improve. TransVoyant provides real-time transparency and live situational awareness enabling actionable intelligence for end-to-end global supply chains.
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redicting Supply Chain Behaviour Using Big Data, ML/AI, and Blockchain
Jim Butera, Vice President of Customer Growth, explains how TransVoyant provides real-time actionable intelligence to supply chain professionals TransVoyant’s world-class Continuous Decision Intelligence (CDI) platform tracks over one trillion events per day to provide supply chain professionals with live transparency, real-time situational awareness and predictive insight. The company’s customers are forward-leaning companies with complex global supply chains that need to ensure their high-value/ high-consequence goods are delivered on time and in proper condition. Top tier pharmaceutical, automotive, consumer goods and industrial supply companies are lining up to work with them. Since 2012, the company has analysed big data streams with its proprietary ML/AI models to help predict arrival times, anticipate delays due to global events, measure lead times, optimise capacity, labour, and inventory. This enables customers to proactively find opportunities to cut costs, improve customer service and anticipate disruptions. Data-Driven Insight To provide the type of out-of-the-box intelligence in which TransVoyant specialises, you need:
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Enterprise Data. Orders from ERP, inventory from warehouse management, and shipments from transportation systems.
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Trading Partners Data. Intelligence that is collected from outside of the four walls of the enterprise but that remains relevant to the company’s industry.
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Risk Events. Natural disasters, epidemics, and geopolitical upheaval: anything that surrounds and could impact a company’s supply chain.
TransVoyant immediately brings two out of three sources to the table: trading partners and risk event data. Fused with its customers’ enterprise data using a private blockchain, applies ML/AI, automation, and customers get actionable supply chain intelligence. Self-Service Software As TransVoyant continues to evolve and mature, its clients increasingly use its platform to achieve unique, company-specific supply chain insights—all without TransVoyant’s help. “It’s a new paradigm given my 20+ years in the enterprise software space”, Jim says. It has never been easier or more cost-effective for customers to digitally transform their supply chains”.
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A good example of how real-time information is key in achieving a secure supply chain is how it supported MSD during the Suez Canal blockage in March 2021. "With just one click we could check where our products were. At the time we had 12 shipments going from Europe to Asia Pacific, and fortunately, they had already passed the canal, but we were able to immediately identify and ensure this." The use of IoT has provided MSD with several clear benefits to date. "In less than 18 months and to prevent loss of product in transportation we have tracked 7,000 shipments, reduced shipment expenses and inventory discards, optimised the sales when supply is constrained, increase our company reputation from missed customer commitments and made insurance premium cost reductions," Brut explains. The total sales value of benefits is above average, he adds. 8
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“ WE ARE LOOKING AT HOW WE CAN UTILIZE BLOCKCHAIN TECHNOLOGY TO BUILD AN EXTERNAL DIGITAL SUPERHIGHWAY THAT WILL GATHER AND PROVIDE INFORMATION. FOR MSD BLOCKCHAIN IS A GAME-CHANGER” FREDERIC BRUT
HEAD OF SUPPLY CHAIN EMEA & APAC, MSD
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To date, all manufacturing sites, including critical CMO Partners, have been enrolled and are utilising the complete digital portfolio, or are engaged with the IoT device use, as the global implementation is finalised. Next step will be to use digital logistics data as an input source and with a supply chain control tower, reduce resource intensity and mitigate logistics disruption. We want to also facilitate the integration to other data sources and ecosystems to improve collaboration within the logistics networks. The COVID-19 pandemic highlighted the importance of supply chain visibility. “At the start of the pandemic, due to restrictions imposed in many countries, across the world, we saw massive supply disruption that rippled through the entire chain, causing shortages of different products in many locations. From this experience, many organisations and governments see the importance of supply chain resilience. 10
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Through digitalisation, and a trusted network ecosystem, organisations can make use of connected devices and leverage the application of digital twins in their supply chain operations. This will allow a bird’s eye view of the end-to-end supply chain, enabling real-time alerts of potential risk events, quicker decision making, and greater flexibility to react to sudden shocks globally, ensuring patients and customers of MSD can continue to rely and trust on a stable supply. In a post-pandemic world, the behaviour of consumers (and patients) has changed as well, the shift in frequency/channel of purchase will require a corresponding change in supply chains. So digitalising our supply chain will allow for the organisation to better cater to this paradigm shift – for example supply-replenishment, connectivity with e-commerce platforms (direct to consumer model for prescription medicine),” Brut says.
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FREDERIC BRUT TITLE: HEAD OF SUPPLY CHAIN EMEA & APAC INDUSTRY: PHARMACEUTICALS
EXECUTIVE BIO
LOCATION: SWITZERLAND Brut joined MSD in 2013, initially as the Head of Global Logistics & Operations for the EMEA region. He has moved into several senior roles while here before becoming Head of Supply Chain for EMEA and APAC in May 2020. Before MSD, he spent five years as Head of Operations and Supply Chain for Walgreens Boots Alliance, one of the largest pharmacy retail companies in the world. Brut is Non Executive Board Member at Sitel Group (BPO, Digital transformation) Brut describes himself as an inclusive leader, inquisitive, self-assured, and dedicated to empowering people.
“ SUPPLY CHAIN TRANSPARENCY AND REAL-TIME VISIBILITY OF THE INVENTORY IS KEY” FREDERIC BRUT
HEAD OF SUPPLY CHAIN EMEA & APAC, MSD
Daniel Laverick, VP, Head of Digital and Data Solutions at Zuellig Pharma, tells us about innovations in blockchain technology and working with MSD.
Laverick focuses on developing customerfacing innovations to enable secure ordering and ensuring the pharmaceutical supply chains are visible. Zuellig Pharma was founded nearly 100 years ago, and has grown to become one of the largest healthcare service provider groups in Asia, valued at US$13 billion. Key products include the online ordering portal eZRx, and eZVax, a solution that provides governments, local health authorities and the private sector with end-to-end vaccine management. The latter is primarily used for the COVID-19 vaccine currently, but Laverick says the plan is for this to be used for any vaccine in the future. Another important service is the eZTracker solution, which uses blockchain-
based technology to drive transparency and visibility in the supply chain for product authentication. eZTracker’s partnership with MSD began in 2020 when eZTracker was deployed in Hong Kong to enhance the traceability of Gardasil®9, MSD’s HPV vaccine. Laverick explains how eZTracker works: “As the vaccines move through various handover points in the supply chain, the products’ data points are loaded into eZTracker’s secure blockchain ledger, and this ensures it can’t be tampered with. Users such as healthcare professionals and patients are able to verify the authenticity of the vaccines by scanning a unique data matrix code on the product pack.” Collaboration between the two companies has grown since then. “We work closely with MSD’s Connected Channel globally, as well as the regional teams, on expanding the use and outreach of eZTracker” Laverick says. “It really is to support the initiative that MSD has, to go from plant to patient and track and trace its product and material movements.” Zuellig Pharma recently completed a project to explore how blockchain technology can be leveraged further to provide more visibility around inventory and streamline ordering processes. Next, Zuellig Pharma is looking at ways MSD can have a self-operated node to be in control of the data the blockchain contains. “We have a very strong partnership with MSD” he adds. “We look forward to continuing to build on this, and seeing how we can support digitally enabled end-to-end supply chains, and the vision to track from plant to patient.”
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PAOLO MIGLIARI TITLE: EXECUTIVE DIRECTOR SUPPLY EXCELLENCE INDUSTRY: PHARMACEUTICALS LOCATION: ITALY
EXECUTIVE BIO
Paolo joined MSD in 2019 to set up and lead the Connected Channels blockchain programme and to drive MSD’s engagement in the blockchain sector and PharmaLedger consortium. Paolo has over 20 years’ experience in pharmaceutical data analytics. He combines the use of technology with a deep knowledge of the pharmaceutical market and its dynamics acquired through consulting activities for several large pharmaceutical companies and many years in business development in companies such as Aegate, CegedimDendrite, IMS Health and Codd & Date.
“ EVERYTHING WE DO IN TERMS OF DIGITAL TRANSFORMATION SHOULD BE PATIENT-CENTRIC” PAOLO MIGLIARI
EXECUTIVE DIRECTO SUPPLY EXCELLENCE, MSD
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Another key element of MSD's digital journey is the use of blockchain technology. "Imagine a future where we digitally connect to our external partners," Brut says. "We are looking at how we can utilise blockchain technology to build an external digital superhighway that will gather and provide information, even make decisions based on algorithms built into the blockchain. For MSD, blockchain is a game-changer." Blockchain is a team effort, Migliari says, and for this purpose, MSD is part of a research and innovation consortium called PharmaLedger where the company has heavily invested to build the collaboration and network with 11 pharmaceutical companies and 17 other entities, including patient representative organisations, research, and academic organisations. It is a three year expedited co-creation effort
between the industry and healthcare stakeholders. The project is sponsored by the pharma industry – EFPIA and the EU Commission with a total EUR 22 million funding. Industry collaboration is the key success factor in the journey to unleash the power and potential of blockchain technology. MSD has been championing this challenge with the creation of a Global Blockchain Consensus Board. The forum, which has so far brought together 14 of the biggest pharmaceutical companies in the world to facilitate progress in blockchain adoption, has no cost, is open to all industry members to join and operates under a legal framework and anti-trust compliance. "In terms of the ecosystem we have to engage in mindful supply chain partnerships," says Brut. "For instance, MSD is also partnering with wholesalers, distribution partners and clinics in Asia Pacific and Canada to seek rapid customer integration, demonstrate the benefits achieved, and meet the transformation agendas of governments while leveraging the digital twin and blockchain capabilities.” If we talk about applications on top of blockchain-enabled networks, our goal is expand our business case portfolio and the deployment of solutions under major capability areas, such as product traceability and anti-counterfeiting; eLeaflet; inventory visibility; and auto-order management, Testing on Importation among other possibilities at the supply chain domain. In clinical trials we explore eRecruitment, eConsent , IoT use in trials and more through the consortium. Geography is equally important, as it can dictate the partnerships, choice of network, with the most useful applications (i.e. anticounterfeiting in emerging markets and eLeaflet for paperless markets). www.msd.com
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1891
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Biopharmaceutical INDUSTRY
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$48bn REVENUE
This can be achieved with technology. The objective is to have a foundational stack with a modular architecture, to join existing networks vs creating our own, depending on geography and aligned strategies. Zuellig Pharma supports the physical distribution, warehousing and order fulfilment of MSD products in the Asia Pacific region, through blockchain-based solutions. An example of this is the mobile application used in Hong Kong for MSD’s Gardasil®9, HPV vaccine. It was created to enable healthcare providers and patients 16
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to verify the provenance on a unit level and report suspicious packs and with that help increase safety in a region challenged by counterfeit medicines. In APAC, MSD and Zuellig Pharma are co-developing and testing a trusted network to which MSD expect will attract more of its Pharma peers. The partnership with distributors and wholesalers adds enormous value to the traceability of pharmaceutical products, without the partnership of Zuellig Pharma or other distributors the final benefit to the customer and patient would be reduced.
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“WE CALL IT CONNECTED CHANNELS BECAUSE WE NEED TO BE SURE THAT THE ECOSYSTEM WE ARE BUILDING, STARTING FROM THE MANUFACTURER AND ENDING WITH THE PATIENT, IS CONNECTED” PAOLO MIGLIARI
EXECUTIVE DIRECTO SUPPLY EXCELLENCE, MSD
Having a robust, external partner network is part of MSD's Connected Channels programme. "The reason we call it Connected Channels is because we need to be sure that the ecosystem we are building, starting from the manufacturer and ending with the patient, with partners, stakeholders, pharmacies and doctors in the middle, are all able to be connected with each other" Migliari explains. Connecting these different actors must require little effort - it could be via an app on a smartphone, or a system used to manage a clinics. "It's so patients and healthcare practitioners can really take advantage of what we are building as an added service and can be part of that value creation as well." Migliari says they are ensuring data will be correctly managed and secure and will also enable patients to take ownership of the data. The architecture must have “privacy by design” as its core concept and data must be self-sovereign for the people using it. “It's really an environment where all the partners and stakeholders own their own data and understand how this data is used." Migliari emphasises that it's important for pharmaceutical companies to collaborate with each other. "Pharmaceutical companies absolutely must compete, but we also need to really take advantage of collaboration,
within legal parameters, especially in the case of logistics. All pharmaceutical companies should collaborate to be sure that the genuine product will arrive as fast as possible to the patient." Collaboration will also help to reduce counterfeit products, another key aim of the aforementioned PharmaLedger. "Once we have all the pharmaceutical companies and supply chain partners on board it will really change our approach and make the environment easier to use and also more secure," Migliari says. He hopes the concept will become widely adopted. "The idea is great, and this digital ecosystem will be of advantage to everybody as the purpose is to be patientcentric. I believe that is an objective of all pharmaceutical companies." MSD’s digital innovation journey is the walk of the talk. It started with a good look into its own operations and infrastructure and in finding the right partners to digitalise logistics. Now it continues to evolve towards an outward focus and the creation of a common utility network which the industry can adopt, and customers and patients can benefit from.
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