Gyan Pandey, Global and Group CIO, Aurobindo Pharma, explains that digitalisation is not a one-time process, but an evolving journey. In an exclusive interaction with Sanjiv Das, he also shares more details about his company’s digital journey and its various milestones
How is the pharma industry navigating Industry 4.0?
Industry 4.0 solutions are helping the industry to reach new avenues in terms of transparency, quality, safety, efficiency, and adherence. In the pharma industry, we have to follow complex processes and meet stringent requirements. Intelligent manufacturing will help organisations in the pharma sector to adapt to the highly dynamic market environment.
The pharma industry has more regulations and compliance laid out as compared to other industries. All these changes in the production, machine, processes have to make sure that the end product is a high-quality and compliant product. Technologies like IoT, AI, blockchain, RFID, etc can help manufacturers and distributors to have end-to-end visibility of the whole process and thus, making sure that the highest quality product reaches the customer at the right price and in the right condition. A few years ago, we decided to embark on our digital transformation journey keeping in mind the constant evolution taking shape in the sector.
Is the industry ready for an era of AI and connected devices?
There have been many perceptible ways in which technology has driven success in the pharma industry. AI and its subsets like automation, ML are changing the face of the pharma sector like other industries. Here, I would like to state that AI is not meant to replace humans but to provide additional support in a certain course of action. However, the constantly emerging technologies like AI and ML have shaped up trends with each passing era. The most common use of AI in pharmaceuticals is in drug discovery, where AI is mobilised to scan through all available data on a particular molecule for a drug. In addition to streamlining the process of drug discovery, the application of AI in pharma offers additional advantages such as identification of both tangible and intangible enhanced parameters of growth. It customises sales and marketing messaging for greater customer engagement and automation of sales and marketing messages across channels. AI-embedded Software-as-a-Service (SaaS) applications help utilise AI to automate pharma supply chain management.
What are the major challenges which hinder the adoption of technology in the pharma industry and how can they be overcome?
Digitisation has a great impact on the pharma manufacturing sector as the industry is stepping up towards complete transformation. As an industry, we deal with sensitive information that is required to comply with several regulations. The law impacts the participants of the entire supply chain which includes the manufacturers, repackagers, wholesale distributors, and retailers. Adoption of technology seems more of a necessity to obtain greater transparency throughout the supply chain as these supply chains are complex in nature. ERP solutions have proven to boost business processes resulting in improved communication with advanced features.
Our supply chain is highly dependent on the changing regulatory requirements which makes it highly challenging to put complete trust in technology, avoiding any barge in the overall mechanism.
The pharma industry is a bit too conservative to make bold choices like adopting technology. Best way to overcome the bespoken obstacles one should choose swift modes of adaptation giving out a material impact on the businesses.
Tell us about Aurobindo Pharma’s digital journey? What has been your strategy and focus areas?
Our key strategy has been to bring in digital technologies to achieve and sustain the required efficiency. Digital technology will reduce the costs in the long run, thereby bringing new ways of doing business. However, to ensure the successful outcome of digital, there was a dire need to have a checklist that included IT infrastructure, the skillset of the IT team, technology partners, and cybersecurity. Most of our plants had physical infrastructure that lacked redundancy and availability at every level. We decided to move to virtualisation, and today, 90 per cent of our servers are virtualised.
What are the major lessons learnt from the journey so far? What have been the most significant benefits?
As the pharma sector is highly regulated, we decided to create two buckets – activities affected by regulations and activities that are not affected by regulations. The second category consists of common operations majorly like finance, HR, Admin, etc. It is comparatively easier to implement technology and manage changes. The other set of activities, which fall under regulatory, includes operational technology. Here the decisions will be owned by Operations, Regulatory, QC, and QA teams. These people will do a comprehensive study of the solution, successful proof of concept (PoC) – a bit more difficult than the other category.
Digitalisation is not a one-time process, it is an evolving journey. You should start slow but have a bigger vision. Already matured processes will be easier to digitalise. You should leverage the existing technology as much as you can. However, above all, you need to have a plan on how you will manage the change and adoption of digital, in accordance with your organisational culture.
The significant benefits that we have seen are – efficiency and transparency of the processes, quick decision making, analytics to bring the business insight across the process, cost optimisation, and higher level of collaboration and hence better compliance and a single source of truth.
How has it affected your human resources? Do they need to upskill or reskill themselves?
We had to mix and match manpower. Going digital has hugely impacted our workforce. To obtain certain efficiency in execution, there have been constant efforts to reskilling the old ones and bringing in the new ones. We also leveraged senior people experience and knowledge for better solution design and project execution. We had to revamp our entire HR operations to match the requirements while bringing in trusted technology partners. We witnessed the overall end-to-end communications for B2B sales taking shape flawlessly.
We also received constant assistance from our technology partners to guide our business at each step while we made conscious efforts in upscaling the overall functioning and gauge optimum benefits out of the quintessential transformation.
How do you plan to take this journey forward?
As a next step, we will be start automating repeated and redundant tasks in Finance, HR, Supply Chain etc with the help of RPA technologies. We are trying to enhance collaborations and data sharing so that there is no duplication of data. We will be basing our decisions on data-driven insights, so we will be using more and more analytics by integrating internal applications (MFG, Quality Management Systems, LIMS, SCM, CRM)
What are significant benefits Aurobindo Pharma has accrued through technology? What has been Oracle’s contribution on this front?
Supply chain management in the pharma sector mission-critical. The medicine can go waste if there are oversights in the supply chain. The whole bottom line in pharma business depends upon the supply chain management in terms of efficiency, cost and compliance. Our supply chain was fraught with many challenges like:
- Inefficient process – As the whole process was manual, so it was time-consuming and used to lead to inefficient handling and higher cost of operation.
- Loopholes – There was no end to end visibility into the whole process, leading to various loopholes in the chain leading to loses in terms of time, money and product.
- Long settlement process – As there was no internal control on linking end to end operation of Logistic, the invoices used to get lost, thus resulting in a painfully long time for invoice settlements. Timely availability of the documents was a big challenge and then collating all those documents from different functions was a bigger challenge.
- No data-driven decisions – As there was no coordination between various functions, there was no reliable data that could be used to cull out insights to base our decisions.
We integrated our ERP, OTM on cloud and logistics service providers systems, and have been able to address most of the operational challenges successfully. We have brought operational excellence, cost optimisation that too with a lean team. We have been able to achieve productivity enhancement, complete process visibility, and tracking improved compliance on claims and complaints resolution. We have automated around 80 per cent manual process related to export operations which have helped us in reducing the FTEs by 30 per cent. It also has contributed significantly to cost optimisation on overall logistics operation. This has enabled to run our logistic operation in a truly digital way. Going forward, as part of OTM Phase II, we plan to include our import-related logistic process as well on the OTM cloud. This will include financial controls related to imports and domestic transactions –- 100 per cent financial transaction control and visibility.
We are currently using Oracle Sales Cloud for our Indian operations. CRM tools have enabled us to view a single source of information now that the scattered information is collected into a single place, thus bringing efficiency in the production processes. Having a proper sales management system in place has brought about transparency in the entire flow of information, which earlier used to be on paper or email. It has reduced process inefficiencies besides bringing more visibility concerning future forecasting. We are now able to plan our production better because of the demand forecasting. We have reduced almost 50 per cent of the workforce from the marketing team.
With enriched data, our execution has become faster. It has brought more efficiency in terms of sales. Indirectly, it has also impacted our demand plan thus reducing the stockpile up in the manufacturing units.
What challenges did the company face while adopting digital technology? How did you overcome them?
I believe that the biggest challenge while going digital was to convince the existing workforce. These people are working with us for a long time now, getting them to work with new technology was a challenge. After a certain period, any change can be unsettling, so we decided to leverage these senior resources and their skillset and proficiency of business process knowledge as business partners. We instituted a new role of IT business partner in the organization which resulted in a collaborative and successful model to give the right solution to business problems. We mixed and matched our employees by bringing new ones with knowledge of cutting-edge technology and upgraded skills of the existing employees as well.