Tag: Merck

OM in the News: Drones Seek a Role in Delivery of Covid-19 Vaccine

A handful of drone-delivery startups want to help transport Covid-19 vaccines from distribution facilities to health centers, vying for a logistical role in what is likely to be a sprawling and complex undertaking, reports The Wall Street Journal (Nov. 2, 2020). Several of these businesses have entered into medical delivery partnerships with drug companies and retailers—including Merck and Walmart — that could help position them to take part in the high-profile effort to distribute Covid-19 vaccines. Walmart said the pilot project with DroneUp will help the company learn about the role drone deliveries can play in pandemic response, health-care delivery and retail.

Meanwhile, some startups have discussed with governments around the world their ability to use unmanned aerial drones to transport vaccine doses, mainly in remote areas. The efforts are indicative of drone companies’ ambitions to reshape shipping and logistics. Delivering Covid-19 vaccines would enable drone startups to demonstrate on a world stage their ability to streamline operations and cut costs across distribution networks.

A Volansi drone

To be sure, using drones to transport Covid-19 vaccines likely would represent a sliver of the overall effort. They would primarily be for hard-to-access regions and fly along fixed routes to move doses in bulk.

Drone fleets can reduce reliance on drivers, increase delivery capacity and speed up the time it takes for supplies to reach patients. These advantages would be valuable in complex and urgent Covid-19 vaccine distribution.  Fleets of dozens of drones, for instance, could make half-hour trips delivering thousands of vials each day to health centers in remote areas.

Merck partnered with Volansi recently to fly medicines and vaccines from its manufacturing facility in North Carolina to a health clinic in unmanned drones. Vidant Health System is participating in the program, which is using a Volansi drone capable of carrying 5 pounds of medical cargo to locations up to 50 miles away.

Classroom discussion questions:

  1. What are the advantages of using drones for vaccine delivery?
  2. The disadvantages?

OM in the News: Merck’s Move to Prevent Drug Shortages

Merck, the Germany-based pharmaceutical, needs to stockpile medications to make sure it has enough on hand because some expire before they can be used. Its supply-and-demand forecasts are about 85% accurate. To sharpen its predictions, Merck plans to use analytics and machine learning to predict and prevent drug shortages, a move that could also save it money. Its new platform, from TraceLink Inc., can analyze data in real time from organizations within Merck’s supply chain, including pharmacies, hospitals and wholesalers.

The U.S. had 600-1,200 drug shortages every year from 2014 and 2019, reports The Wall Street Journal (Oct. 15, 2019). Shortages can happen due to issues with manufacturing, supply-and-demand forecasts, and natural disasters. Drugs in short supply have included antibiotics, chemotherapy and cardiovascular treatments. More precise supply-and-demand forecasts mean pharmaceuticals could save hundreds of millions of dollars annually, a benefit of not having excess drugs on hand and avoiding expedited shipment costs.

On average, pharmaceutical companies carry 156 days of inventory. For retailers selling consumer products, it is 78 days. For IT equipment, it is 57 days. Pharmaceuticals traditionally have predicted demand for drugs based on historical data and input from sales teams. But as many as 10 entities handle a drug before it gets to a patient, including manufacturers, pharmacies and wholesale distributors. “It’s a highly complex supply chain,” said TraceLink’s CEO. The TraceLink network includes data from more than 275,000 organizations world-wide, including hospitals, retail pharmacies, wholesale distributors and drugmakers.

TraceLink’s algorithms give Merck signals about the days of inventory for a specific drug and how long it will take for a drug to get to a particular phase in the supply chain. A better supply-and-demand forecast also makes it easier for Merck to expand into locations without a reliable supply-chain infrastructure, such as parts of Africa and Southeast Asia.

Classroom discussion questions:

  1. Why do pharm firms carry such a large inventory?
  2.  How might data analytics improve forecasting at Merck?

OM in the News: Merck Introduces Automation to its Supply Chain

German pharmaceuticals firm Merck plans to deploy artificial intelligence and predictive analytics throughout its entire supply chain by the end of 2019, reports The Wall Street Journal (Sept. 11, 2018). Occupying the forward edge of an industry-wide shift towards automated supply chains comes with a competitive advantage. But it also will require that Merck address those jobs affected by the technology, a process called AI augmentation.

The company is using analytics software from Aera Technology to mitigate supply shortages, predict spikes in demand and bottlenecks with about 100 products. It plans to expand the pilot program to its 5,000 products by the end of next year. Merck views AI as a way to augment the jobs of the company’s supply chain planners, and reduce often tedious and repetitive work. By 2021, AI augmentation will save billions of worker hours.

The Aera software captures supply chain data from dozens of data bases and ERP systems throughout the company. Then machine learning algorithms analyze it and suggest recommendations, such as whether and when to adjust product supply or demand forecasts. The algorithms factor in external data such as weather, natural disasters, trends in patient health and expansion plans of pharmacies.

In the pilot test, 10 supply chain planners get detailed alerts via automated phone messages every morning about supply shortages and spikes in demand. The system offers suggestions, based on real-time demand data, such as whether to increase inventory, start production or identify a replacement product across 100 drug products globally. By the end of 2019, one hundred supply chain planners will be using the technology. The goal is eventually to have the retrained supply chain employees make more accurate decisions about how to better position inventory, in order to guarantee supply for patients more effectively.

Classroom discussion questions:

  1. What is predictive analysis?
  2. What is the goal of AI augmentation?