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Let’s build a smarter pharmaceutical supply chain. Smarter, Safer Drugs InfoSphere Traceability Server IBM Software Group Smarter planet opportunities are everywhere.... smarter safe smarter solutions pharmaceuticals for retail smarter data center smarter healthcare smarter supply chains smarter transportation smarter food smarter smarter industrial manufacturing operations smarter traffic smarter water management smarter cities 2 Serialization and the New Era of Visibility The ability to obtain and verify the location, status and history of an item. Pharmaceuticals: Can I be sure my prescription drugs are not counterfeit? Parts: Which parts were assembled in my car and are they authentic? Food: Where does my food come from? Returnable Containers: Do my suppliers have enough containers to meet my production needs? The IBM Supply Chain solution enables customers in multiple industries to answer these questions today. 3 The world is changing and becoming more… Instrumented Interconnected Intelligent The explosion of new information, when integrated, analyzed, and acted upon using new types of intelligence, enables solutions that … help build Smarter Safer Drugs Trace Events in a ‘Physical Meets Digital’ World Serialized information links physical world assets, resources and infrastructure with the digital world of event processing, business analytics and optimization. Supply Chain Optimization Asset Optimization Extend supply chain visibility, analytics and collaboration to transform supply chain operations. Full lifecycle asset management through real-time visibility, optimization and traceability Production Process Optimization Leverage industry information for asset design and process optimization. Physical Infrastructure Focus on smarter buildings, smarter water management, smarter grids, etc. Supply Chain Visibility Can Produce Better Outcomes Stock-Outs – Excess safety 4.5% of revenue is lost due to supply chain inefficiencies. stock is 10% of inventory at Manufacturers and $700-800K of excess inventory at each hospital and retail pharmacy - IDC 8-10% of Worldwide Drug Supply is Counterfeit – up to $75 billion a year in lost sales - WHO 6 Global Serialization Trends Concern for counterfeit drugs, diversion and patient safety is driving a global trend with legislative and serialization requirements IBM provides a common platform to allow flexibility to accommodate new standards EU Panel Votes to Crack Down on Illegal Medicines ASSOCIATED PRESS April 27, 2010 BRUSSELS - The battle against counterfeit medicines took a big step forward Tuesday when the European Parliament public health panel approved a bill to crack down on a fast growing industry worth (EURO)10.5 billion ($14 billion) a year in Europe alone. If it becomes law, drug makers must produce medicines that can be tracked from the factory to the patient to make sure no one tampers with the content. Trusted Physical Data is Converted into Usable Information Reporting & Analytics Xylinke Xylinke Blood Thinner End-to-end Traceability Inventory Visibility Temperature Tracking Business Benefits Increased supply chain visibility Reduced counterfeiting and diversion Increased Consumer Safety Increased efficiency for conducting recalls and returns TRUSTED Pharma Manufacturer INFORMATION Distribution/ Export Retailer / Hospital 8 Smarter Supply Chain Architecture – Supply Chain Visibility Events are captured at various points in the supply chain, stored in a in a secure traceability network and can be shared with trading partners InfoSphere Traceability Server Manufacturing Plant Distribution Center InfoSphere Traceability Server Distribution Center InfoSphere Traceability Server Retail Location 9 Types of Data WHAT WHERE Manufacturing Data Location Lot/Batch Expiration Environment Data Temperature Transactional Data PO Invoice WHY Business Process Receipt Ship InfoSphere Traceability Server City/State Country/Region Store # Dock # Port # WHEN Timestamp 10 Standards Based Solution Components √ GS1/EPCglobal Certification http://www.epcglobalinc.org/certification/sw_cert Alternate Solution Architecture Standard Network Architecture Internal Applications External Applications EPCIS Query Interface ePedigree √ EPCIS Event Repository EPCIS Capture Interface √ Readers/Scanners Vendor C EPCIS Query Interface EPCIS Query Interface InfoSphere Traceability Server Vendor B EPCIS Capture Interface EPCIS Capture Interface Vendor A Siemens, …) √ Filtering & Collection Reader Protocol Business Analytics (Systech, WebSphere Sensor Event Server Optel Vision, EPCIS Capture Application ALE Interface Shipment Verification Solution Architecture √ ALE Interface ALE Interface WebSphere Sensor Event Server Vendor A Reader Protocol Reader Protocol Readers/Scanners Readers/Scanners 11 How is Data Captured? From large to small enterprises Distributor A Pharma Manufacturer IBM Traceability Server EPCIS Event Capture Device Management Needs to support multiple customers Want to drive value through internal visibility Wants to purchase and support own data management platform Distributor B Event Capture Distributed Event Capture Distributed Device Management Device Management Pharmacy C Device Management Needs to support multiple customers Has limited interest in driving value through internal visibility Government agency hosts the data servers 12 Expected Business Benefits from Track and Trace Source: AMR Research, 2009 13 New Insights – The Power of Analytics to Gain Efficiencies Xylinke Xylinke Blood Thinner 14 Compliance (US): Pedigree Types (only IBM supports both) Pedigree Document pedigree receivedPedigree Pedigree Data Requirements Topic Data Source Unique Identifier Lowest saleable unit unique identifier Manufacturer Source of Drug shippedPedigree Federal manufacturer registration number Manufacturer Receiving Event Principal address of the source Trade or generic name pedigree Shipping Event Quantity receivedPedigree pedigree Commissioning Event Shipping Event Name pedigree EPCIS Pedigree Dosage form and strength Drug characteristics Container size Manufacturer Receiving Event Number of containers Expiration dates shippedPedigree Lot number (s) InitialPedigree Business name Address Each owner of the drug Owners Date of Transaction Sales Invoice Number Business name Each owner of the drug Shipping Info Address Certification Contact information of each person certifying delivery or receipt Each owner of the drug The supply chain path of a drug is known at any point 15 IBM’s Unique Value Proposition 1. IBM offers the most complete solution components: Device Management, Capture Middleware, EPCIS, and Pedigree App (both Document and EPCIS Pedigree) – the only “one stop shop” 2. IBM employs 400,000 professionals, operates in 170 countries, and has local expertise and support in any part of the world 3. IBM has been working with many global regulatory agencies: FDA US (drug and devices regulation), EFPIA, Brazil,Turkey 4. IBM solution has been deployed for different use cases in many industries for cross-learning opportunity 5. IBM solution provides low operational risk: redundancy, HA, and fail-over contingency 6. IBM solution enables extension to business applications such as: consignment inventory, supply chain visibility, cold-chain management, chargeback resolution, targeted recall 7. IBM solution can easily be integrated with many other complementary suite of products: ILOG, Maximo, MDM, Cognos 16 Workshop Invitation Ready to learn more about how IBM can help your business? IBM experts will arrange to meet with your team to evaluate your current readiness and make suggestions for next phase deployment needs. Our teams have worked with several manufacturers and distributors globally, and can help you define a process roadmap to obtain serialization, compliance and help offset on-going costs by evaluating overall business process efficiencies. Thank you for your Attention Smarter, Safer Drugs InfoSphere Traceability Server IBM Software Group BACKUP SLIDES IBM’s Supply Chain Visibility solution – Platform for Many Applications Applications Inv Mgmt Data Center Cold Chain Recalls Prod Auth ePedigree RCM Enterprise Traceability Server (EPCIS) Serial Commissioning Number Events for units, Allocation cases and pallets Aggregation Events for cases and pallets Decommissioning and De-aggregation Events for rework Shipping Events for transfers and customer shipments Data Capture Application/Local Traceability Server (EPCIS) Packaging Plant Serial Numbers Commissioning Aggregation Events Events Line Management Decommissioning De-aggregation Shipping Events Events Events Device Management Premises Server 20 Governments & Industry are concerned for patient safety 21 Regulations are Increasing World-wide Pedigree and serialization regulations are a growing trend among domestic and international regulatory bodies Risk Management: Product Authentication & Diversion Detection Challenges • High risk of product counterfeit and diversion • High theft • Protecting brand identity • Increased inventory stock • • • WHO estimates counterfeit drug sales between $35 and 40 billion per year Between 8 and 10% of the worldwide drug supply is estimated to be counterfeit By 2010, more than $75 billion of sales will be lost per year “Leveraging Track and Trace in the Pharmaceutical Industry”, IBM Whitepaper © 2009 Benefits • Minimize lost revenue due to counterfeits • Minimize lost revenue due to diversions • Increase patient and consumer safety • Brand protection and risk mitigation Companies can identify counterfeit or stolen product entering their supply chain 23 Risk Management: Targeted Recall Benefits Challenges • Execute a targeted recall quickly and efficiently • Inability to execute a targeted recall • Enable a targeted recall over a full recall • Time, cost and effort to recall product • Track progress of recall • Lost revenue • Risk to brand identity Companies can quickly identify where product has been shipped and efficiently execute a targeted recall 24 Operational / Performance Inefficiencies: Supply Chain Visibility Challenges Benefits • Lack IDC notes the pharmaceutical industry loses 4.5% of revenue6 • Increased shipment accuracies • of supply chain collaboration • Lack of interoperable systems • Ensure inventory levels are maintained to meet market demands • Insufficient traceability • Reduce spoilage IDC notes the pharmaceutical industry loses 4.5% of revenue* due to supply chain inefficiencies * “IDC Home: The Premier Global Market Intelligence Firm. 11 February 2009. • Reduce handling cost for discrepancies • Reduce working capital requirements • Better forecasting • Increased operational efficiency Companies can optimize their business processes driving operational efficiency and reducing costs 25 Operational / Performance Inefficiencies: Cold Chain Management Challenges • High spoilage • Lack of compliance validation Benefits • Improved product efficacy and safety • Reduced spoilage • Proof of SOP – regulatory • Track temperature and shelf-life data • IMS Health reports worldwide sales of biologic medications, which require temperaturecontrolled storage and shipping conditions, increased by 12.5% in 2007 $75 billion • Nearly double the 6.4% increase in sales of traditional pharmaceuticals Companies can increase product safety and prevent spoilage due to inefficient processes 26 Operational / Performance Inefficiencies: Returnable Container Management Container Flow for Manufacturers Challenges • • • • High investment Cost to replacement Lack of monitoring High safety stock requirements Scrap New containers OEM Benefits • Reduce Costs • Reduce returnable asset inventory by up to 40% • Eliminate between 10-15% of safety stock • Sharply reduce substitution costs Plant 2 Plant 1 • Increase Operational Efficiency 3PL • Eliminate potential shutdowns • Increase asset utilization • Optimize operation processes through trading partner collaboration • Reduce Risk • Reduce asset counterfeiting • Reduce product counterfeiting • Protect investment Supplier A Supplier B Supplier C 27 A Working Deployment Model – Pedigree 1. 2. 3. 4. Traceability Server Traceability Server Event repository and processing Event repository and processing Serial Number Allocation Data Storage/Management Performance Measurements Reporting/Alerting Data Capture Line 5 Data Capture 5. 6. 7. 8. ePedigree Shipment Verification Line 6 Print serialized label Data capture Units to Case QA rework Line 1 WebSphere Sensor Event Server Processing Line 7 Line 2 Line 3 Processing Line 4 Phase 1 – One line Phase 2 – Add’l Lines Phase 3 – DCs Phase 4 – Trading Partner Data Sharing A Working Deployment Model – Realizing ROI Traceability Server Traceability Server Event repository and processing Event repository and processing WebSphere Sensor Event Server Data Capture 1. Serial Number Allocation 2. Data Storage/Management 3. Performance Measurements 4. Reporting/Alerting Line 6 Line 2 Line 3 Line 4 Processing Phase 1 – One line Processing Line 7 5. Print serialized label 6. Data capture 7. Units to Case 8. QA rework Line 1 Shipment Verification Line 5 Data Capture Phase 2 – Add’l Lines ePedigree • Returnable container management • Logistics Management • Dwell time • Cold chain • Controlled product • Returns visibility • Targeted recall Phase 3 – DCs • ePedigree • Shipment verification • Product authentication • Diversion detection • Returns visibility • Downstream expiration management • Downstream inventory visibility • Targeted recall Phase 4 – Trading Partner Data Sharing Reliable Performance US Pharma Manufacturer InfoSphere Traceability Server 30