Innovation in Manufacturing and Distribution Systems (Part Three)
Charles L. Cooney, SM '67, PhD '70, Professor of Chemical and Biochemical Engieering; Co-Director, Program on the Pharmaceutical Industry; Mark R. Bamforth, Senior Vice President, Corporate Operations and Pharmaceutical ; Genzyme Corporation; Peter Walsh, Director of Business Development, UPS Consulting ; Abbot Weiss, Senior Lecturer; MIT Center for Transportation and Logistics ; ; Daniel W. Engels, Director, R.F.I.D. Healthcare Initiative ;
Description: Genzyme is a leader in personalized medicine, as Mark Bamforth demonstrates. For instance, the company collects cartilage from a single patient, grows it in the lab, and sends it back securely to that same patient. The system, says Bamforth, tolerates "no mix ups." But the company also deals in drugs sent to hundreds of thousands of kidney dialysis patients. Each kind of product must adhere to a specific kind of manufacturing and distribution process, and the regulations of the FDA and other countries. Bamforth must navigate "a complexity and diversity of supply chains."
Peter Walsh works behind the scenes at UPS, making sure those brown trucks deliver to the right location at the right time. He believes that "healthcare is a good 20 to 30 years behind other industries" in terms of getting the goods from supplier to manufacturer to consumer. "We see in big pharma a silo approach. That needs to change ' and means sharing of information scary to think of in this industry."
Abbott Weiss sees in pharmaceuticals "a highly fragmented set of supply chains" at a time when globalization poses increased risks, such as theft and diversion, and cost pressures. He describes working at Polaroid, and shipping out 120 million packs of film a year, with 140 countries each requiring different labeling. "Exception management is the rule in supply chains," says Weiss. And unlike film, there are "life and death implications of getting the right medicine at the right time and right place." The good news is that much of the technology for solving tracking and distribution problems already exists, Weiss says.
One such technology, radio frequency identification (RFID), is a good first enabling step for pharmaceutical makers, says Daniel Engels. "If I know what I have and where it is, I can do something about it." The critical problem will be "asset visibility," communicating this unique product information to suppliers and customers. And this kind of tagging will prove especially difficult for generic or bulk drugs, sent through distributors. The "end game" is information sharing.
Host(s): Sloan School of Management, MIT Center for Biomedical Innovation
Tape #: T20182, T20183 and T20184.
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