4 Years Ago We Entered the Age of Continuous Disruption

Are Black Swans STILL COLLIDING with YOUR Supply Chain

Do you remember where you were on Friday, March 13, 2020?  I don’t think I will ever forget.  That was the day we entered, what we at Axendia call, the age of continuous disruption.  On this day the President of the United States declared a National Emergency concerning the Novel Coronavirus Disease Outbreak.

On March 18, 2020 we published an article titled  COVID-19 Black Swan Colliding with Your Supply Chain?  However, the issues that disrupted, and continue to impact global supply chains are not new. In 2010 we started advising clients about the risks associated with globalization, outsourcing and single-sourcing. (See Research Report Achieving Global Supply Chain Visibility, Control & Collaboration in Life‐Sciences: “Regulatory Necessity, Business Imperative”).

While many focused on the rewards of these practices, At Axendia we recognized that globalization and outsourcing had increased the volume of geographically dispersed partners, facilities, and suppliers in the Life-Science global supply chain. This resulted in increased supply chain risk and decreased predictability due to variability and complexity and increased the impact of ‘Black Swan’ events on the healthcare ecosystem.

Black Swans Are Still Colliding With Supply Chains

Black Swan events once seemed extremely rare and had little or no impact on Life-Science supply chains. In recent years, however, natural disasters, and geopolitical unrest are having significant impact on global supply chains.

Our research revealed 43% of industry leaders have significant concerns due to single sourcing stemming from risks associated with Black Swan events.

The vast majority of industry executives responding to our survey reported facing a confidence crisis due to the lack of visibility into their own supply chain. 

73% reported that their highest perceived risks are associated with Tier 2 suppliers.  As one Executive put it “we feel that the level of visibility goes down exponentially with every link in the supply chain.”

Even more of a concern is that the comfort level with “critical suppliers” is not much better, with a full 68% reporting their level of risk as moderate to high based on current levels of visibility.

Value Networks Improve Resilience

In inflexible and rigid supply chains, where you only have one link and two points of contact in each link, you introduce vulnerability from single points of failure.

To gain resilience, we propose the transition to smart sourcing, with a focus on value networks.  Standardized and optimized practices executed across value networks drive improvements in operational efficiencies, on-time deliveries, reduced inventory, operational cost, and the cost for quality. They also require a technological foundation that provides adaptability, flexibility, and creativity to solve the problems of the future.

Having a network of suppliers that are qualified to provide raw materials or sub-assemblies or intermediates or APIs that can be leveraged throughout your manufacturing process is the desired state of the value network,

It’s also imperative that when a supplier ships the product, they also share the data associated with your product.  This includes not just a certificate of quality saying it met your standards, but actual valuable actionable insight and data that you can use to fine-tune your processes as you are manufacturing.  Processes affected may be as diverse as whether it’s primary, secondary packaging, or whether you are doing it internally or through a CMO.

This approach provides flexibility as the product moves through the distribution network that it is fully traceable – so that you don’t need magic to know how the product makes it to the provider or patient. In addition, feedback loops, data and insights enable modeling and the ability to simulate potential disruptions in the digital world so that network resilience can be built proactively instead of reacting to shortages after they happen.


To mitigate risk, we recommend that Life Science companies address the following issues and concerns when managing this global and outsourced environment.

Enhance visibility across the value network

Deploy systems and technologies to provide visibility and control not only in the supply chain, but also in the entire value network – from product design, sourcing, manufacturing, and distribution to the consumer.

To enhance visibility across the Life-Science extended partner network, brand owners should:

  • Employ risk-based supply chain management strategies
  • Require partners to document their complete value network
  • Integrate data islands and point solutions to aggregate data needed to glean business information
  • Implement global, standards-based, and interoperable systems to support visibility outside the corporate four walls
  • Collect, analyze, and act on critical-to-quality indicators and parameters
  • Implement IT solutions to achieve business results, not simply meet regulatory requirements

Improve collaboration with all constituents in the ecosystem

Effective collaboration remains the cornerstone of successful relationships, especially in today’s global and outsourced environment.

Stakeholders in the Life Sciences should adapt to the evolving landscape by fostering partnerships, transparency, and harmonization efforts, thereby reshaping relationships to allow for earlier interactions in the process, which will support outcomes that are advantageous for all parties involved. It also means engaging suppliers who are willing to share information about the product on-demand, to support efficiencies and effectiveness across the product lifecycle.

To improve collaboration with all constituents in the ecosystem:

  • Identify partners who share your approach and philosophy to quality and compliance
  • Consider a “smart-sourcing” strategy; evaluating the total cost and potential risks, not just initial cost
  • Implement commercial, legal, and technological frameworks that promote the exchange of information
  • Enable partners to become an extension of the brand owner’s own quality and information systems
  • Create and publish standard measurable incentives to drive collaboration, improved performance, and mitigate risks
  • Establish an honest dialogue with partners to enhance the value and impact of the relationship
  • Don’t focus on price alone, consider overall value and associated risk

In Brief

Disruption is the new normal. This new paradigm is forcing Life Science companies to re-imagine the way they operate; transforming and accelerating product development, regulatory review, manufacturing, and distribution cycles aimed at improving patient outcomes.

Life Science organizations need to gain supply chain flexibility and establish the reliance necessary to quickly adapt in response to Black Swan events.

These strategies will enable Life Science organizations to minimize supply chain challenges and increase predictability in the age of continuous disruption.

To discuss how your organization can be better prepared to succeed in the age of continuous disruption, click on this link to schedule an Analyst Inquiry on this topic.

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The opinions and analysis expressed in this post reflect the judgment of Axendia at the time of publication and are subject to change without notice. Information contained in this post is current as of publication date. Information cited is not warranted by Axendia but has been obtained through a valid research methodology. This post is not intended to endorse any company or product and should not be attributed as such.

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