Sometimes words are simply inadequate. For instance, "complex" hardly captures just how much is going on in Pfizer's worldwide supply chain. Look at this snapshot: after more than 25 acquisitions over two decades, Pfizer has 90 plants on six continents; more than 300 external suppliers / contract manufacturers; 175 market-based logistics / distribution centers; more than 35,000 SKUs; 2,109 global logistics lanes, in 808 distinct country-lane pairs; 45,454 shipments; and 17,394 freight contract line items.
Delivering information and monitoring logistics performance in that warren of activity is no easy task. So the pharmaceutical giant set about getting its arms around the challenge and came up with a cloud technology-based information strategy called the Logistics Delivery Platform.
In conjunction with its partners, GT Nexus and Unyson Logistics, Pfizer has transformed its supply chain into "device independence" mode, which is a very specific strategy of injecting a virtualized information and process layer between Pfizer and its control towers, service providers and trading partners across the value chain.
For logistics network performance and monitoring, Pfizer and its external providers no longer have their own proprietary data sets or operating systems, says Jim Cafone, vice president of Supply Network Services. Instead, they all use the same platform to manage the network via activities such as performance monitoring, network analysis and management of contract rates. Thus, while the network may change over time, no new integrations are required of Pfizer. The layer insulates Pfizer from the underlying physical changes and allows network participants to be added or removed rapidly.
Moreover, the platform gives Pfizer and its partners a single version of the truth against which all stakeholders operate. The benefits include the ability to measure the flow of product, orders, and shipments to establish fact-based sets and ongoing indicators of actual supply chain behavior; drive collaborative network improvement that is not possible via traditional means; reduce costs year over year; build agility and flexibility into the network's DNA, ensuring rapid and efficient response to company and/or product acquisitions, provider changes, or disruptions in the supply chain; enable supply chain segmentation, ensuring often incongruous supply model strategies can be fully supported.
"We've insourced the 'think' and outsourced the work to our providers," Cafone says.
Traditional challenges in the pharmaceutical and healthcare supply model include cost management, product security, compliance, asset management, product velocity, availability, transportation, conveyance requirements and information / data exchange. Now, new demand from hard-to-service emerging markets complicates delivery. Then, of course, government standards and regulation can be fluid and changing. The information needed to manage the supply chain is often not readily available through traditional means. "The Logistics Delivery Platform is our strategic response to these challenges," says Cafone. "This will enable us to transform our supply and delivery chain and collaborate more effectively across our vast partner network - Pfizer manufacturing plants, suppliers, logistics centers and, ultimately, customers."
The platform is an informational and process "connection" to a robust and global virtual information layer. Rather than going directly to the underlying "devices" in a many-to-many relationship, all participants come to the same place. It's the supply chain equivalent of Microsoft Outlook vs. Facebook. In Outlook, when one person's contact information changes all their contacts must individually update the entry. In Facebook, the user updates the information and it is instantly available and accessible to everyone else. Many single enterprises thus become a dynamic, networked "ecosystem" of partners.
While the transport service providers are "plug and play", the platform consists of two key bookends: an Information Platform (anchored by GT Nexus) and a Network Analytics Platform (anchored by Unyson Logistics).
These two key providers are the virtual information layer that interacts collaboratively with a rationalized set of strategic logistics partners to drive network excellence.
GT Nexus serves as the technology foundation by providing three critical and inter-locking components into a single unified cloud platform. The three components include: a collection of functionally rich business-to-business software applications for automating global trade and logistics processes across business networks; a network controller for creating and administering the complex and highly dynamic business relationships, permissions and roles of multiple organizations working together in business communities; and a global data grid to connect to the systems of thousands of partners and providers, and to standardize the data from the systems of those partners. Without a data strategy "” and without standardized data transformed into useful supply chain information "” no software application can deliver results. In global trade and logistics, information is king.
Unyson Logistics serves as the analytics "front end" of the information layer. Unyson aggregates data from multiple sources - most in the cloud but some proprietary to Pfizer; manages the data and creates cross-database associations that enable common reporting to drive Pfizer's network key performance indicators; and visualize the data via a web-delivered, highly configurable dashboard software suite.
Pfizer's goal is to have 95 percent of global network provider spend "fully integrated" with its platform. A provider is considered fully integrated when: rates have been leveraged and procured via a collaborative procurement event; contracts are digitally, collaboratively maintained and integrated to Pfizer's freight audit platform; freight invoices are audited prior to payment, and resulting spend is transmitted to Pfizer's analytics provider; in-transit shipments are visible in real-time; and spend, cycle times, milestones and contract compliance are reported via data analytics.
All global air and ocean spend is fully integrated. By year-end 2012, this designation will expand to include over 95 percent of all network spend, says Jeff Jagiela, director of Pfizer's global transport and logistics.
By leveraging the cloud, Pfizer has connected the "single source of truth" to a highly innovative and flexible front end that produces advanced metrics and provides direct comparison of all platform elements (e.g., contractually committed vs, actual cycle times) to network participants.
Information access time, or IAT, is a strategic differentiator for a supply chain. Prior to implementation of the platform, Pfizer's IAT to key data (e.g. shipment volumes, cycle times, real-time shipment location, spend, etc.) sometimes exceeded two weeks. Pfizer would query its many providers, who would begin to look in their databases, send a report in their format, which Pfizer would aggregate, scrub and harmonize, and then begin its analysis. In one case, it required 16 weeks to gather data in order to conduct a European surface network analysis. In other cases the information could not be compiled before the original question was rendered obsolete.
Today, Pfizer achieves the metric of "7-second IAT" - not just for our own people, but across the entire value chain. Because there are no proprietary data sets, Pfizer goes directly to the Logistics Delivery Platform and gets the needed data. "We believe this is extraordinary control and visibility - a 'must have' infrastructure for any company that needs to be agile on a global scale," Cafone says.
Timely, incisive articles delivered directly to your inbox.