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Lead Change or be Left Behind

Wednesday, April 20, 2011

Most people know that I spend at least 60% of my time in the field with customers. For instance, this week I will be in the office on Monday and the rest of the week listening and working with customers to solve their problems. The source of all our innovation comes from customers. Many are fond of telling me when and where we thought of that specific feature or capability.

As I was reflecting on my past few weeks of fairly intense travel and interactions, it became clear to me that the pace, magnitude and criticality of change at our Pharma/Bio customers is accelerating. The reality of $267 Billion of product sales losing patent protection over the next 6 years has shifted from planning for the impact to executing on a strategy to lead the organizational changes at the company. One thing is certain; there are no magic bullets since there are no new blockbusters that will fill the large revenue holes.

In the last five years, there have been many strategies openly discussed and shared within the industry. Therefore there is no secret strategy that one company has as its secret sauce. The following press release, IMS Forecasts Global Pharmaceutical Market Growth of 5-8% Annually through 2014, indicates the approaches the industry will take for continued growth. These strategies include:

  • Growth from emerging markets
  • Personalized medications and complex therapies
  • Graduated approvals with on-going evidence of outcomes

The supply chain organizations are the most impacted by these changes, because they need to transform. A recent PwC report, Pharma 2020: Supplying the future, concluded by saying: “The supply chain is simultaneously becoming more important, as the medicines the industry makes get more complex and the opportunities for generating value from pure product offerings diminish”. These changes thrust the supply chain organizations into a strategic role within their company.

In all cases, the transformation of the supply chain involves driving more visibility and collaboration upstream all the way to raw materials suppliers, downstream to patients and across geographies into emerging markets. Here are some quotes from the field that demonstrate the imperatives:

  • “The company is banking on emerging markets for revenue growth and we need to ensure secure distribution”
  • “Emerging markets have 10x the counterfeiting and diversion and the trust factor is material to our revenue opportunity”
  • “Three out of five new product launches this year will be with products manufactured by outsourced providers”
  • “We need to track outcomes in order to enter the market and maintain FDA approvals for most new medicines”
  • “We want to be at the center of our virtual network and have all our partners connected to us with real-time visibility”

In the technology industry, we went through a similar stage for personal computers when the value of product innovation merged with the value of operational excellence. Dell and HP emerged as winners because they were able to combine product innovation with supply chain execution excellence. Change and transformation was not a matter of optimization but a necessity for survival.

Of the companies we work with, the ones that understand the moment are moving at a fast pace with determination that clearly sets them apart as leaders. They recognize that change is accelerating and Wall Street is very unforgiving of execution failures. Traditional and safe decisions are not acceptable when they don’t deliver the results necessary for the business. There is no buffer for mistakes or being a year behind.

At TraceLink, we are embracing the change and working with the industry to support their transformation. The velocity of the transformation will hit higher levels every day and we will be there with you delivering the visibility and collaboration your business needs.

NoBullWhip!

Posted by Shabbir Dahod | Comments ((Disabled)) | Trackback (0) | Permalink

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