Get connected10 April 2019
The internet of things (IoT) offers huge potential to improve efficiencies across the supply chain. These technologies provide real-time data about products and conditions, facilitating the ability to respond quickly and anticipate future issues. Karen Taylor, director of the Centre for Health Solutions at Deloitte, speaks to Louise Thomas about how to integrate IoT into existing systems in order to maximise the benefits of the technology.
The internet of things (IoT) is a concept thrown around a lot, both inside and outside the pharmaceutical industry. Defined as a technology that allows the tracking and monitoring of connected devices, it offers huge potential for better control of the supply chain, particularly when combined with tools such as blockchain. IoT is an umbrella term and includes a number of different options to improve efficiencies and traceability, as well as differentiation and innovation. A 2017 Deloitte report highlighted three key aims of IoT for supply chain: collecting data from real-world objects, communicating and aggregating the data into insights, and using these results to improve systems.
There are two main families of IoT devices. The first of these are ‘things’, are devices attached to an object, or independent devices that can behave autonomously. These are temporarily or permanently connected to a network (such as the supply chain), collecting and communicating information about its functioning. In some cases, these technologies can receive instructions to modify their behaviour based on the data they are gathering. Sensors or beacons are the second family, which are devices that take extrinsic measures of behavioural or environmental conditions and can be attached to moving objects or fixed in place. ‘Things’ and sensors work together.
Get to know those involved
In order to optimise the effectiveness of IoT, consideration of the whole infrastructure is important, rather than merely the network and the devices. “The IoT isn’t just about technologies, it’s about the integration of devices that allow you to collect data to monitor and evaluate the activities across the supply chain,” explains Karen Taylor, director of the Centre for Health Solutions at Deloitte. “You've also got to have the connectivity landscape involved.”
The integration aspect is key as it manages both the sensor and network elements, aggregating the data from both of these and assimilating with other data sources and preparing it for the next part in the process. Augmented intelligence takes the information gained and translates it into actionable insights that can be taken to optimise the supply chain. These can either be in real time (known as data in motion) or long-term data (known as data at rest). Augmented behaviour is the next phase that encapsulates the actions or changes in human or machine behaviour resulting from insights generated by applications using IoT data. “The whole point of IoT is obtaining automatic collection of different information sources to be able to understand what is happening along the supply chain and that impact,” says Taylor. “That includes information about the types of products, the types of pharmaceutical ingredients to the technology around developing the way that those ingredients will be provided to patients, whether that’s injectables or tablet form, blister packets and those sorts of things.”
There are a number of challenges faced by the supply chain. These can be addressed by combining IoT technologies with blockchain. However, it’s important to acknowledge that blockchain is not merely a storage system. “Blockchain isn’t just the technology to be able to trace the products as they move down the supply chain,” says Taylor. “It provides that security because you will know who has been involved with that product and the different stages down its journey.”
Do not adjust your monitor
Traceability is clearly one of the key ongoing issues with supply chain management, including the requirement for event monitoring and the collection of productspecific data. IoT can provide a full audit trail of data throughout the supply chain, which is beneficial for multiple individuals and organisations involved. “It’s about providing that end-to-end security for both the pharma company and the clinicians who will be prescribing it, and that certainty that what they are prescribing is on the label,” says Taylor. “Labelling is a particular area where IoT can have a big influence because you can have a digital based sensor label that will alert to any tampering of the supply chain.”
Tracking products throughout their journey is particularly useful for those travelling through the cold chain. Deviations in temperature can easily be captured with an IoT device, the data of which can be input and tracked on the blockchain. This would then generate notifications and action can be taken to intervene in that aspect of the chain. “Being able to monitor the products that are being maintained at a certain temperature, whether they are being shipped or moved in freight, being able to collect data that the temperature that they’re being kept at is at the right level, that is a really important part of ensuring the quality of the product,” says Taylor.
Technologies can also be coded to perform specific tasks and trigger diverse responses depending on the conditions being measured. For example, in a worstcase scenario, if certain pre-conditions are not met drugs could be automatically pulled before being released to the market. This not only reduces the risk of non-compliance but also protects patients from adverse events.
Compliance is another key difficultly that obviously needs to be evidenced to demonstrate adherence to regulations. The immutable and irremovable nature of blockchain means that a single, timestamped, tamperproof source of data can be produced.
“Having a complete view of the supply chain and data that can demonstrate how products have progressed along it enables requirements to be met in a more effective and efficient way,” explains Taylor.
IoT devices can help to capture data that could be useful to any stakeholders with credentials to retrieve the information which could be a reliable source for entities such as the FDA, which then would be able to obtain a full product history. The ecosystem could also develop its own processes to trigger and notify stakeholders whenever predefined conditions or unusual events occur.
A further challenge is flexibility; companies are faced with having to adapt to different environmental conditions in a cost-effective way. However, IoT and blockchain enable the creation of smart contracts, providing real-time rule-based verification of multistakeholder confirmation. “If you’re monitoring a global supply chain, you’ve got to be able to track products across different geographies so that has to be brought into mind when you’re developing a digital approach to managing your supply chain,” Taylor says.
Although all of these capabilities have huge potential for optimisation of the supply chain, the implementation of the technology is still in its infancy. “How many companies have fully embraced the technology is hard to answer,” Taylor says. “My understanding is that they are at the early stages of adopting this technology because it is such an expensive and global initiative.”
Part of the trade
Part of the reason for this relatively slow uptake is the uncertainty around them. As acknowledged by a 2017 Deloitte paper, these technologies remain unproven. For example, blockchain is effective in securing transactions but can be limited with regard to performance, scalability and confidentiality. IoT also needs to demonstrate that its infrastructure is effective, efficient, secure and reliable. As it is an amalgamation of multiple technologies, standards will have to be defined and accepted so that they can work well together, which will take time.
Integrating IoT also demands greater crosstalk between the digital and the physical world. One of the key functions of a blockchain is sharing information on a trusted platform and the collection of this information demands a strong interconnection. A number of different strategies will need to be tested to see which is best able to seal and authenticate products effectively. This need for verification is also true of sensors, and for the resources that are calibrating and maintaining them. It is inevitable that some tough decisions will have to be made about risks versus costs when using IoT and related technologies, as well as the value of both the products being transported and the value of the data generated about them. The global nature of the pharmaceutical supply chain makes the implementation of IoT particularly difficult. Achieving complete control thus requires all stakeholders to commit to investigating and implementing these technologies. “Natural ingredients are sourced from one country, shipped to another for research and development, to another for production and manufacturing so they need to have end-to-end visibility of that supply chain and they build their systems over many years,” says Taylor. “The digital technology that is now much more widely available provides an opportunity to improve the efficiency of all of those interactions but this is at the interaction phase that all the challenges exist.”
Trade-offs will inevitably have to be made between transparency and confidentiality among stakeholders. While navigating these decisions, it is of course imperative that efforts are made to ensure that company strategies and activities cannot be leaked.
Where IoT is being integrated into supply chain management, vast amounts of information are being generated, which can be challenging to turn into useful insights. “The mass of data that’s available means that companies have to find ways of turning that data into intelligence,” says Taylor. “That’s where the other parts of IoT come in, the analytics platforms, the systems and software providers that can capture all this data and turn it into insights that then allow the company to make decisions at speed to improve and intervene when necessary.”
Looking to the future, it is clear that IoT development will continue to evolve and gain greater momentum within the industry. “Inevitably, you will see a wider use of digital technologies to improve the efficiency and effectiveness of the supply chain, with robotics, process automation and application of AI and machine learning,” says Taylor. “The systems will be iterative and improving all the time.”
Taylor remains highly optimistic about the potential of these developments for the supply chain. “Improving the efficiency and productivity and will become second nature to the managers of supply chains,” says Taylor. “Having this vision of an IoT will mean all these technologies have a part to play.”
Although these developments won’t occur overnight, they are not a product of the distant future either. “I’d say this will definitely happen within the next five years,” says Taylor.
Companies cannot remain passive if they want to implement these effectively. “The development of new business models are contingent on the technologies,” explains Taylor. “The fact that you are using real-world data and you’ve got real-time information, you will need to change working practices,” she concludes.