How AI is helping pharma cope with supply chain disruption

Neal Singh, COO, Icertis, discusses how advancements in artificial intelligence (AI) are helping pharmaceutical manufacturers better manage their supply chains.

As the Covid-19 crisis continues to unsettle global economies and business sectors worldwide, pharma companies are facing huge disruption to their supply chains and clinical research.

And while research into potential Covid-19 vaccines and treatments is speeding along, the pandemic has slowed or brought to a halt clinical trials for other diseases, with organisations like Eli Lilly and other big name pharma’s’ putting the brakes on non Covid-19 trial activity. In fact, 50% of respondents in a recent BSI survey said they will be making changes to their supply chain moving forward.

In this climate, with pharmaceutical supply chains under so much pressure, businesses are understandably focused on protecting supplier relationships as different parties are forced to cancel agreements, delay their contractual obligations or renegotiate key terms.

This leaves anyone involved in the contracting process grappling to quickly understand the nature of their contracts, and the potential implications and risks to business and their supply chain as a result of any changes.

To address these challenges, AI is being leveraged to enable pharma businesses to quickly gain full visibility of their exposure to a crisis and critically prioritise resources, by identifying risks across all contracts such as missed entitlements, unwanted expiries / renewals, and non-compliant clauses that can damage important business relationships, slow down progress and ultimately cost money. Additionally, AI can be used to identify clauses buried in legacy contracts or within those contracts that have come into an organisation as part of an acquired entity for example; helping pharmas to digitise such contracts and then quickly identify any risks and obligations.

How AI is quickly giving pharma businesses the answers they need

For the last couple of years we’ve seen many benefits of using AI within healthcare, from transforming patient diagnoses, helping to make sense of clinical data and to develop new cures. One additional place the technology is really coming to the fore, is within the contracting space.

Using technology to optimise previously complex, time consuming processes is not a new concept. However, employing AI for the management of what is traditionally unstructured information, such as contracts, is a significant change.

With AI, digitised contracts can be analysed and amendments rolled out across an entire contract library – allowing contract professionals to quickly surface and deal with risks as they are uncovered in a way that would be impossible through a manual review. The nature of AI means those critical business queries do not need to be standardised within a system – but can address complex questions specific to a business need or executive ask. Rather than simply looking at data, organisations that have integrated AI into their contracting and supply management processes can ask specific questions such as ‘which of our contracts contain force majeure clauses and do they contain language relevant to pandemics and/or quarantines?’

From a supply chain perspective, AI provides deeper visibility and therefore better arms pharma companies to manage any risk. In today’s on-demand age, it’s an easy assumption to make that companies can simply log into a system to see a map of their supply chain and see who they’re working with in the areas most affected by Coronavirus. The reality is quite different. For large companies with different divisions participating in multi-tier supply chains, no matter how many systems they log into it can be challenging to gain a global view of their supply network, particularly as countries start to re-open post pandemic.

Using AI powered contract management solutions can enable organisations to quickly find answers to the questions they are asking themselves about their supply chains during the pandemic. Questions like what suppliers do we have in Italy (or any other affected geography)? And, do we have suppliers that are not in affected geographies that we might be able to pivot to quickly?

Many organisations across the sector are already using AI within their contracting and supply chain management function as a means of quickly extracting contract data and enabling commercial and contract professionals to work more confidently during periods of uncertainty and to respond to the current issues unearthed by Covid-19.

Device and test kit manufacturers are also using AI to respond to the huge demand for more test kits. Using AI helps them to identify suppliers within their supply chain who can provide additional sources for materials and parts when supplies are dwindling. With AI, procurement departments can easily surface and establish these new sources from across their existing supplier contracts; shaving time off a process that would typically take around 12-16 weeks down to three.

Additionally, supporting the clinical trial process is another important use case of AI during the current time. As Clinical Research Organisations (CROs) look to accelerate vaccine trials, they are challenged by the stringent contracting paperwork and processes put in place by regulatory bodies. Applying AI to clinical trial agreements can help speed up the contracting process by identifying similar clauses, languages and agreements that have previously been agreed between pharma companies and CROs, to quickly create replica contracts or contracts based on pre-approved terms.

Ultimately, AI provides those managing the contracting process with the best and most accurate information to make necessary changes in a way that presents minimal business risk to an organisation and their suppliers.

Nobody knows when the world of business will return to normality, or the longer lasting impact of Covid-19. What the industry is certain about, is that a dynamic and well protected supply chain is now critical for pharma companies to survive. The pressures on the pharma sector amidst the current pandemic require a fast, reactive, and nimble approach to trade, commerce and relationships with customers and suppliers. Applying AI to these commercial relationships and the tangible environment affecting these relationships will better equip organisations to navigate uncertainty and respond in a way that will protect their bottom line and support future growth.