Volume 6, Issue 6, June – 2021 International Journal of Innovative Science and Research Technology

ISSN No:-2456-2165

Digitization Deployment Challenges in

Pharmaceutical Supply Chain
Ashish. A. Adhikari, DBA Scholar
Dr. A. Seetharaman, Dean Research

Abstract:- Digitalization and Digitization are related, There is greater synergy between the physical and
however their meaning is different. Digitalization is digital worlds, which enables manufacturing companies to
made up of several different areas like Digital become digital (Linz et al. 2017). This is possible if
communications, while digitization is converting technologies like the Internet of things industrial processes
analogue information into data formats. Industry 4.0, and services can be integrated to generate value through
another commonly used term is the digital network of managing data better. This integration can also serve as a
people, machines and products. future competitive advantage (Porter and Heppelmann
2015).
Pharmaceuticals is a research intensive industry,
which keeps on churning new products to save patients’ A. Research Questions
lives. The safety and efficacy of products is stringently In the Pharmaceutical space both Industry and Product
regulated, and rightly so. Pharmaceutical companies development are impacted by Digital technologies. Experts
have started to explore Digitization for higher feel the Pharma Industry with its regulatory requirements as
efficiencies, faster and better clinical trials and cost pre requisites to high quality products, can be one of the
reductions. Digitization offers multiple opportunities, generators of digitization development in the world (Lisna
but there are also implementation challenges that need to A.G 2019).
be considered. The study result show the factors that
affect Digitization in Pharmaceutical Operations and There is a 90% failure rate in implementation of
how mitigation can be done. enterprise digital systems. Our understanding of how
organizations implement digital tools is very limited (John,
Keywords:- Digitization Application, Digitalization Impact, Sally, Vikas and Glenn 2018). The objective of this study is
Pharmaceutical Operations. to understand the considerations to make Digitization
successful by asking the following questions:
I. INTRODUCTION a. How to choose the right Digital applications from the
various choices?
Industry 4.0 or digitization is the new buzzword across b. How to mitigate cybersecurity risks and reduce change
industries. It promises to bring in a revolution on how resistance amongst stakeholders?
technologies can change the way work is done and managed. c. What is the impact of leadership on Digitization
It provides a new perspective in making decisions between deployments?
the priorities of cost, flexibility, speed and quality (Tava d. How to consider high cost of Digitization
Lennon Olsen and Brian Tomlin 2020). When it comes to implementation for success?
digitization, academic and industry leaders are in agreement e. Is there a role for Digital innovations in a Pharmaceutical
that it will bring sweeping transformations across the value regulatory environment?
chain, right from R&D, supply chain, manufacturing and
operations to commercial sales and service (Brian, William B. Research Objectives
and Subu 2015). As a response to the above queries the study is aimed
to meet the following research objectives. How to fit various
With current progress in technology, the usage of data Digital technology applications for maximizing benefits?
by people and organizations has seen a sea of change. a. How to minimize Digital fear and improve acceptance?
Benefits of flexibility, analytics and artificial intelligence are b. How to incorporate proactive leader-led Digital strategy?
providing greater insights from large amounts of data. c. How to develop a benefits calculation methodology to
Digital disruptions are creating advancements through evaluate Digitization implementation?
Virtual and Augmented reality, future interfaces, advanced d. How to create a win-win synergistic relation with
robotics and Additive manufacturing (Brian, William and Regulatory to smoothen digitization?
Subu 2015).

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C. Scope of the Study B. Trust
The pharmaceutical Industry has already exceeded Having an Operational standard is a pre requisite for
USD 1 trillion in revenues globally. However they have still success in a digital world. Without this data access and
not leveraged on the opportunities that Digitization offers. transparency will get hampered (Sebastian, Jeanne, Cynthia,
For example, in Germany, the Pharma/Healthcare industry is Martin, Kate and Nils 2017). Introducing digital
ranked at the bottom of a digital index scale in strategy, technologies in pharmaceutical setting is complex. We need
product, sales, customer experience, and processes (Alina, to resolve a number of organizational, technological, legal,
Eldar and Levent 2017). This article attempts to provide a social and economic tasks. Looking for an optimal solution
road map for a Digitization Applications deployment is difficult. Having trust in the technology application is
framework in the manufacturing operations area. vital (Vladimir and Valentina (2018). Data is increasingly
being used to make decisions. Trust in data based decisions
II. LITERATURE REVIEW is a key factor for supply chain collaborations. (Gregor,
Jannick and Gred (2019). Organizations are interested in
Pharmaceutical companies are facing a challenge on using data processes which are more transparent, reliable
how to organize, utilize and predict future trends in supply and trustworthy (Ketevani 2019).
chain. The big question is how to enhance performance in
operations by using large quantities of data. (Shafique and Today cyber-physical systems are connecting people,
Khurshid 2018) machines, and resources. We need to prioritize ownership,
privacy, data security and transparency (Rohan, Laya and
The literature review is structured basis the factors Nimita 2018). Cloud systems increase risks for data security.
considered for the research. The dependent factor is “Impact The difference between cloud and on-site systems is who
of Digitization applications in Pharmaceutical Operations” controls security. Cloud-based security depends on the
and the independent variables are i) Interactions between vendor while on-site security is in the hands of the
Digital technologies ii) Trust iii) Leadership iv) Costs and v) organization (Francisca Maria Sousa e Silva 2019).
Regulatory policies. The article emphasizes on
understanding their impact on Digitization in The use of cybernetics in digital applications can
Pharmaceutical Operations. impact data security and online integrations between
entities. This can lead to data leaks and security breaches
A. Interactions Between Digital Technologies resulting in high costs to manufacturing companies. Security
Industry 4.0 has some main technologies like 1) Cyber is a serious issue which should be dealt with effectively
Physical systems (CPS) 2) Internet of Things (IOT) and 3) (Francisca Maria Sousa e Silva 2019).
Cloud computing. Other technologies include 1) Big Data 2)
Virtual Reality 3) Augmented/Virtual Reality 4) Machine C. Leadership
Learning 5) Artificial intelligence 6) 3D printing 7) Block Only 44% of managers and executives believe their
Chain 8) Wearables 9) Advanced Robotics 10) Digital Twin companies are prepared for digitization. Worse, 50% of
etc. Industry 4.0 is utilization of all these technologies and employees believe their leaders are lagging behind in digital
their interactions, in the biological, physical and digital innovation (Von Kutzschenbach, 2017). Leadership buy-in
domains (Michael 2018). Data analytics are used to optimize and support is required to create a digital vision. In most
factory operations. This helps in better equipment company’s digitization is at an infancy stage. In these
utilizations, improved product quality and lower energy organizations, revenues come from products and services
consumptions. With several tools available, factory which are traditional. Successful digitization is limited to
managers have a better understanding of raw material flow identifying ways of applying these technologies and data
and conversion into finished products, which can help them access to add value to customer relations, products and
cut costs and improve efficiencies (Brian, William and Subu services (Sebastian, Martin, Jeanne, Cynthia, Kate and Nils
2015). 2017). In the pharma context, most of the thought leaders
agree that the old organizational and business model must
With multiple choices available, organizations spend change and new ways need to be used. (David, Amy and
substantial amount of time deciding on specific technology Olivier 2015).
applications and their interdependencies to maximize
benefits. Further, the lack of subject matter expertise of
technology applications complicates the matter.

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CEO’s entrust digital topics to executives other than down in the long run is taking shape. Such an elaborate
the CIO, creating a new role like the Chief Digital Officer. project requires significant implementation costs. It provides
Research shows that CEO’s and CIO’s need to have a an area of uncertainty between potential benefits and the
mutual understanding of common goals to promote costs involved. Some investments need to be made upfront
successful business IT partnerships. This can create potential so that other beneficial systems can be implemented later.
non collaborations within the organization. Alignment is High early costs of smart factory implementations
necessary and this is usually the missing piece (Ingmar exacerbates the uncertainty, as benefits of these investments
Hafke 2017). Organizations have to holistically think of accrue in an uncertain time in the future (David, Vinit,
integrating IT/Digital technology with Business strategy Markus and Aleksander 2018).
(A.B Kazim 2019)
E. Regulatory Policies
Some research indicate leadership as the reason behind In the pharmaceutical industry digital technologies can
Digital failures, while others blame management practices, affect the development of both Industry and products. There
governance, culture and other transformational programs is high level of regulation to ensure quality products and
which are running in parallel. There are problems with compliance (Lisna 2017). The biggest barrier for
getting new competencies to align with Digital practices. Pharmaceutical Digitization are regulatory concerns.
Studies from successful firms suggest that Digitization is Sufficient data quality and tracking is needed to ensure
less dependent on technology adoption than on leadership regulatory compliance. Regulatory’s biggest issue is
mindset and strategy (A.B Kazim 2019). ascertaining data quality, security and availability.
Considering the value placed on end patient safety, this
concern is valid (Alina, Eldar and Levent 2017).
D. Costs
The pharmaceutical Industry is highly regulated, Regulation of medical products is a basic and
resulting in its inertia to adopt innovation. Rising costs and important part of any healthcare system to ensure Patient
focus on patient centric products and services has pushed safety. While the simplified creation of digital products
Pharma to embrace Innovation (Rohan, Laya and Nimita accelerates innovation, regulatory requirements remain the
2018). Digitization applications promises to reduce same yet seem to be necessary to provide a safe market
Pharmaceutical manufacturing cost base provided enough entry. Because the risks of medical products cannot be
scrutiny is done on the right Digital investments. assessed by the users it is the duty of regulatory procedures
to reduce those risks. Regulatory processes must evolve to
Customer demand helps organizations improve their changing cycles of innovation and keep pace with
processes and systems. Companies invest in innovative digitization applications (Andreas and Simone (2017).
technologies to streamline their capability to provide
customers what they need and anticipate future need. III. RESEARCH METHODLOGY
Process improvement using digitization should be a big
priority for any organization (Francisca Maria Sousa e Silva Research Methodology is the process by which a
2019) researcher describe, explain and predict a process. Research
methods are tools that researchers use when they inquire or
Once the decision to digitize Manufacturing is taken, investigate. It provides the focus and approach for the study
next steps are to identify actions, feasibility and and is the process through which methods will be used to
prioritization. Digitization costs would include technology address specific questions (Sami 2016).
costs, training and support costs and data maintenance costs.
Also considering that Digitization will enable change, the Different sources of information was used for the
costs involving ways of working will apply (Anne-Maarit, Research methodology. This included secondary data from
Linnea and Ville 2016). However it is hard to identify and an online search of journals, reports etc. The research model
prioritize the most viable actions with respect to manageable suggests a direct relation of five factors - a) Digital
costs. This is because of restricted know-how in most cases technology Interactions b) Trust c) Leadership d) Costs and
(Andreas, Welf, Anders and Orjan (2017). e) Regulatory Policies on Digitization applications in
Manufacturing Operations.
The concept of Smart factory, which incorporates most
of the digital technologies to bring Manufacturing costs

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IV. RESEARCH FRAMEWORK

Based on the literature review a framework is developed as shown below.

Research Framework
Title: Impact of Digitization Applications in Pharmaceutical Operations

Digitization Applications in the Pharmaceutical Operations

Regulatory
Variable

Digital technology Costs

Trust Leadership Policies
Interactions

Visionary Heavily regulated

Limited Cybersecurity Risk ROI mapping
Leadership lacking industry
understanding of process missing
applications SME lacking Decision making High focus on
Risk to benefit
complex quality/patient
Multiple Choices Change assessment
safety limits
Problems

available Resistance Non Collaborative missing

innovation
Stakeholders

Fitting Digital Incorporate Develop a digital Proactive

Minimize Digital
technologies proactive Digital benefits alignment with
fear & improve
applications for strategy using calculation Regulatory
acceptance
maximizing collaborative methodology policies
Objectives

benefits stakeholders.

Digital Skills Formulate Finance Ongoing updating

Evolve a Digital
enhancement Operations budgeting of Regulation
applications
Strategy imbibing process policies on digital
fitment process Pilot projects to Digitization integrates Digital applications
Solutions

gain confidence. projects

Analysis and Outcomes

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ISSN No:-2456-2165
V. ANALYSIS AND OUTCOME Organizations need to embark on a skill enhancement
drive to ensure people have complete understanding of
A. Digital Technology Interactions – Analysis And Outcome Digitization technologies, applications and security
There is no doubt that pharmaceutical organizations concerns. It is advisable to start with the implementation of
should have sufficient software and hardware resource pilot projects (Vladimir and Valentina (2018). This can be
capabilities to maximize their operational improvements used to gain confidence in technology applications, risks and
(Shafique and Khurshid 2018). benefits. Companies need to develop a time based
implementation strategy.
Key questions that organizations need to ask are
 Where do I Digitize? Which technologies do I use Organizations need to adopt a Risk management model
specifically? revolving around the FMEA (Failure Mode and Effect
 What comes first? What are the Interdependencies Analysis, US Armed Forces Military Procedures document
required? MIL-P-1629 1949) Matrix to identify the impact of utilizing
various technologies. The matrix can help quantify the risks
Companies need to develop skills in Digital which can be mitigated through brainstorming with
technologies to make an informed decision around the right internal/external subject matter experts and stakeholders.
prioritization and application. For example the analysis tools
used in “Big Data” are complex and require skill in C. Leadership – Analysis And Outcome
evaluation and visualization of results. Complexity of the Culture and Leadership skills deficiencies are one of
results of digitization comes from complexity of the data the top barriers to implement Digitization in Pharmaceutical
sets (Fitzerald, Bonnet and Welch 2013). Organizations Operations (Alina, Eldar and Levent 2017). Also
need to start thinking of ways of creating a process of Digitization in companies do not succeed because of fixed
understanding, evaluating all relevant and available mindsets, cultures and processes that negate change. Lack of
technologies and fitting them together as part of the a Digitization strategy and competing priorities were typical
Implementation strategy. obstacles in digitalization (Clara and Susan 2017) Research
indicates that effective leadership ensure successful digital
The “Impact to Value Framework” (Hammer, M., & transformation, a focus on change management and
Mangurian, G. E. (1987). SMR FORUM the Changing organizational communication (John, Sally, Vikas and
Value of Communications Technology. Sloan Management Glenn 2018).
Review (1986-1998), 28(2), 65.) can be applied as a decision
evaluation matrix to identify the right fitment of Pharma companies that want to move ahead in
technologies. Based on the framework, companies can Digitization need to be optimistic to act now and develop an
identify which technologies can offer the optimized value in innovative culture by investing in people and process
terms of efficiency improvements, effectiveness and degree capabilities (David, Amy and Olivier 2015). Digitization is
of innovation. This can be correlated to the time of not dependent on technology alone, and has a component of
implementation, geography or scope of application in leadership. Leadership by influence is the need of the hour.
multiple areas or locations and relationships. For Digitization to be a success excessive force and power
will not do. A leader need to understand when to lead,
B. Trust – Analysis And Outcome support, coach, facilitate and influence others. The
The healthcare industry has reported a 10% increase in traditional traits of charisma, all knowledgeable etc. are not
the number of industrial espionage cases since 2010. In 2017 going to be enough. Digitization requires a top driven
this industry contributed to 18% increase in data breaches visionary mindset, implemented through independent teams
out of which 63% cases were attributed to malicious (A.B Kazim 2019).
activities. (Donovan, Shannon, Jacqueline and Stacy (2019).
In 2017, Merck & Co. a biopharmaceutical company, was The way forward is to formulate a long term business
affected by a worm Petya. This malware infected strategy with Digitization as one of the Key enablers. The
manufacturing processes connected computer systems, top leaders need to communicate, practice and deliver on the
resulting in non-availability of Gardasil and Hepatitis B change by using the power and influence of key
vaccine (Donovan, Shannon, Jacqueline and Stacy (2019). stakeholders including internal/external change leaders and
experts. Development of internal teams and
Cybersecurity can affect suppliers of Pharmaceutical restructuring/creation of roles might be needed, for example
companies. This is when sensitive data, like customer data, hiring of a Chief Digital officer.
security is compromised (Francisca Maria Sousa e Silva
2019). Digital attacks are a reality and it is a negative To align business strategy to Innovation and IT
influence on digitization implementation (Saheed 2019). Strategy we could use the “Strategic Alignment model”
Trust in Digitization can be compromised if security threats (Venkatraman, N., Henderson, J. C., & Oldach, S. (1993).
are not mitigated. This can lead to organizational change Continuous strategic alignment: Exploiting information
resistance due to “Digital fear”. technology capabilities for competitive success. European
Management Journal, 11(2), 139-149.). This will ensure that
there is a creation of a dynamic administrative process to
align Business and Digital strategy. This model results can

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ISSN No:-2456-2165
be integrated to the “Strategy Map” (Kaplan, R. S., Kaplan, Health Regulatory agencies and Pharmaceutical
R. E., Norton, D. P., Davenport, T. H., & Norton, D. P. industry are natural stakeholders, partners and suppliers to
(2004). Strategy maps: Converting intangible assets into the entire Patient health system. The objective of both are
tangible outcomes. Harvard Business Press) as created by same, which is to enhance health. There needs to be an
Kaplan and Norton. This can be the basis of a top driven environment of trust, honesty and respect if this relationship
Digital action plan. has to progress. There is a need to collaborate, communicate
and coexist. Regulatory Agencies face several challenges
D. Costs – Analysis And Outcome owing to legal, technical and scientific domains. There
If we are planning a Cloud based platform, the initial needs to be a strategic level partnership and synergy
costs are usually lower and is charged based on number of between the two which includes 2-way communication flow
users. This is easier to predict and organizations can to strengthen this relationship (Sandeep, Vikram and Harish
estimate the additional hardware and costs involved. 2017).
However what is difficult is the amount of money required
over a period of years. If the organization decides for an Companies must evolve a security policy to protect
onsite solution, the initial investment is much higher. The against data breaches. The most sophisticated privacy
organization will also have to pay for regular maintenance. regulations must be used. These proactive and committed
However the onsite platform also offers much more actions can help create an environment of trust between
predictability for costs over a period of time which is Pharmaceutical companies and Regulatory bodies.
advantageous from a budgeting point of view (Francisca
Maria Sousa e Silva 2019). Pharmaceutical Industries who are moving ahead on
Digitization could form a strategic consortium or knowledge
When it comes to solution customizations, cloud based group to further enhance their skills, challenges and
platforms have less flexibility. This is balanced by more understanding of regulatory framework. The Discussions
stability and upgrades. On site platforms usually have more could be focused around having a working relationship with
flexibility and customizations and lesser upgrades. If there regulatory agencies in terms of current and future trends,
are upgrades there are costs involved (Francisca Maria risk-mitigation plans etc.
Sousa e Silva 2019).
The Pharmaceutical organization needs to analyse its
The main aim of Digitization is to reduce costs, relationship with Regulatory agencies as an important
enhance performance, create internal efficiencies and adapt stakeholder using the “Instrumental approach of Stakeholder
to new changes (Degryse 2016). So the decision to introduce theory” moderation model (Berman, S. L., Wicks, A. C.,
digitization has to be based on the return on investment and Kotha, S., & Jones, T. M. (1999). Does stakeholder
the cost – benefit analysis model (Boardman, A. E., orientation matter? The relationship between stakeholder
Greenberg, D. H., Vining, A. R., & Weimer, D. L. (2018). management models and firm financial performance.
Cost-benefit analysis. Cambridge Books). Academy of Management journal, 42(5), 488-506.). By
using this approach senior leaders within the Pharmaceutical
When Digitization actions are identified, a feasibility firm can re look at their collaborative efforts on Digitization
analysis needs to be done and actions and outcomes need to applications through the prism of honest and ongoing
be prioritized. The feasibility analysis needs to revolve communications.
around a cost benefit analysis, risk analysis and constraint
analysis. Feasibility analysis can involve costs of trials, VI. RESEARCH IMPLICATIONS
prototypes etc. to gain better understanding. These actions
needs to be brainstormed for their interdependencies. The study is based on qualitative research articles and
validated secondary data. A framework is provided as the
E. Regulatory Policies – Discussions Analysis And most important factors that need to be considered by any
Outcome Pharmaceutical company to go for Digitization applications
One of the biggest challenge for Pharmaceutical within its Operations domain. Implementation risks can be
companies is the cost of launching new products. Regulatory largely mitigated if stakeholders use the framework as a
requirements are hinged on ensuring safety of patient and guiding tool. Pharma leaders can make use of Kotter’s
product efficacy. This can result in the reduction of clinical “Change Phases” model (Kotter, J. P. (1995). Leading
success rates. Over the past 13 years, in the US alone the change: Why transformation efforts fail, Harvard Business
success rate was 4% out of the total products launched, Review) and integrate the five factors within their
while the cost to launch products was 1778 Million USD. Operations domain. These research findings should help
The return on investment is declining so rapidly that the Pharmaceutical operations to realize better efficiencies,
pharmaceutical model has to evolve (Fumio, Tomohiro, remove non value added processes, increase transparency,
Yeongjoo, Shintara and Kota 2019). This naturally creates cut costs and help improve human performance and learning
additional cost pressures. Regulatory agencies, being aware capability.
of these challenges are inclined to be over cautious in
scrutinising compliance to prevent companies from cutting
corners.

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 Volume 6, Issue 6, June – 2021 International Journal of Innovative Science and Research Technology
ISSN No:-2456-2165
VII. LIMITATIONS AND SCOPE FOR FUTURE [5]. Berman, S. L., Wicks, A. C., Kotha, S., & Jones, T. M.
RESEARCH (1999). Does stakeholder orientation matter? The
relationship between stakeholder management models
Secondary data was used for the study. Depending on and firm financial performance. Academy of
when the data was collected some of the facts could be Management journal, 42(5), 488-506.
outdated. Technology life cycle is short, hence considering [6]. Biggs, J., Hinish, S. R., Natale, M. A., & Patronick, M.
that the topic of research was around Digitization, some of (2017). Blockchain: Revolutionizing the global supply
the parameters of the data set studied may have changed. chain by building trust and transparency. Rutgers
The study was conducted considering Pharmaceutical University.
Operations. How do these factors change or behave for other [7]. Blossey, G., Eisenhardt, J., & Hahn, G. (2019,
functions of the Industry like R&D, Commercial and January). Blockchain technology in supply chain
Marketing, Upstream and Downstream Supply chain, management: An application perspective. In
Logistics have not been studied. What is the impact of these Proceedings of the 52nd Hawaii International
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weightage of the five factors has not been arrived at. A. R. (2009). A cost-benefit analysis of the
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The Pharmaceutical Industry remains one of the (2016). The impact of digitalization in the drugs
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