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Medical Diagnostics Testing Industry Executives Reveal Unique Supply Chain Opportunities at BSMA Conference

Foster City, CA (PRWEB) November 18, 2013

The world’s leading community of biopharma supply chain management professionals came together on October 8 for the 6th annual conference of the Bio Supply Management Alliance (BSMA) in Foster City, California. On an exclusive track at the event, executives of the Molecular Diagnostics Testing industry launched a pioneering initiative to achieve enhanced efficiency, product quality, customer service, information sharing and compliance with best practices in the supply chain through collaboration under the aegis of BSMA. The presentations included an industry overview of the market, the foundations of success for supply chain managers, logistics design of cold chain solutions for delivery to labs and hospitals and proven case studies.

Mike Crowell, Senior Director, Supply Chain Management at Verinata Health and Alan Wells, Vice President, Diagnostics Laboratory Operations at Life Technologies opened the track session at the Conference with an industry overview of the Molecular Diagnostics Testing (MDx) market. According to Crowell, “MDx is the fastest growing segment of the in vitro diagnostic market, projected to hit $14 billion by 2014 and set to double by 2017.” The two presenters noted that MDx relies on multiple technologies to identify genetic variations in individual patients. These advances have resulted in a highly fragmented US market with over 500 companies participating.

The next presenter, Wayne McDonnell, Pharma and Life Sciences Advisory at PwC, laid the foundations of success for MDx supply chain managers. He identified three key supply chain metrics for MDx that differ from other branches of the biopharma industry. He said, “The MDx market relies on Field inventory. The goal of achieving on-time deliveries and in-full field inventories faces the formidable challenges of generating accurate demand metrics to optimize the total supply chain cost." He identified the three key metrics to be the accurate field inventory counts, supplier's inventory stocks and total cost of internal operations, as well as external 3PL service which play a big rold in MDx.

The next session featured a panel of distinguished MDx supply chain experts focused on “Opportunities for SCM Efficiency!” Panelists included Susan Jiang, Supply Chain Supervisor, Verinata Health; Arbi Harootoonian, Vice President, Business Development, Therapak; Meserve Platt, Associate Director- Materials & Facilities, Crescendo Biosciences; Christelle Laot, Technical Fellow, Cold Chain Management, Life Sciences & Specialty Services, FedEx; and Winnie To, Procurement and Planning Manager, Natera, Inc. and moderated by Alan Wells. The panel and audience engaged in a very active interchange and identified these issues unique to the MDx supply chain:
?    The question of “What is a lot?” impacts the MDx supply chain because lot-to-lot shipments from vendors vary and those variations impact test results.
?    In general, companies in the MDx industry depend on a sole source from their reagent vendor.
?    Demand strategies differ due to multiple product offerings, but in general, rapid turnaround for results is crucial.

Meserve Platt, member of the prior panel, then presented a case study titled, “Managing your 3-PL Partner.” He began by posing the question, “Who is the customer?” and then provided the following insights, “Is it CMS or other payor? Or is the patient who benefits from the diagnostic test? Or is it the MDs who write the prescription for the test? Is it colleagues within the company? Or is it the independent lab?” He then suggested several measurable indicators for 3PL vendors including on-time delivery versus expectation; carrier on-time vs. lost samples, which translates to lost revenue; and on-time performance globally for carrier versus on-time performance for the company.

Christelle Laot, also a member of the aforementioned panel, presented FedEx’s view of designing cold chain solutions for MDx customers. From the FedEx viewpoint, MDx shipments consist of small packages and almost all are shipped domestically within the U.S. (though some international business is emerging). She also said, “Unlike cold chain shipments for clinical trials, MDx shipments are very price sensitive to the cost of transportation. As a result, the MDx industry is not willing to contract for FedEx specialized services.”

Mike Crowell then presented a case study on "Implementing Pull-Based Replenishmen"t at Verinata Health. Crowell opened the session by detailing how Verinata simplified their supply chain management with a pull-based replenishment system based on the "Drum Buffer Rope" model. When comparing Push versus Pull replenishment system, he said, “PUSH based replenishment is typically an MRP-driven system that plans for expected demand based on forecasts. These types of systems do not work for the MDx supply chain because demand uncertainty is very high. By contrast, a PULL-based system relies on actual demand as the signal to pull needs downstream and is ideal for systems where the expected demand is unknown and production is demand-driven.” He then detailed the Drum Buffer Rope system developed at Verinata Health.

In the final session of the MDx track, Arbi Harootoonian presented a case study titled, “Rightsizing Your Client’s Kit Inventory.” His company, Therapak, provides kitting and fulfillment services for MDx companies. When developing kits, these companies need to consider the thermal requirements for their samples; distinctions between inbound and outbound temperature requirements; kit presentation; and kit dimensions to optimize shipping costs. For MDx industry participants, he pointed to an Intelligent Supply Replenishment (ISR) model. Comparing static ISR versus dynamic ISR, he said, “In a static ISR model, kit supply shipments are triggered based on ‘static’ pre-set min/max re-order levels. This requires manual upkeep to reflect volume changes at sites. By comparison, a dynamic ISR model calculates average weekly usage by site and kit type and manage inventory at field sites using a formula based on average weekly usage, desired stock level by site, and the number of weeks.”

To access presentations in the Medical Diagnostics Track at BSMA mentioned above, click here.

The Bio Supply Management Alliance, which organizes the Conference, was born of the need to create a worldwide community of operations and supply chain management leaders and professionals in the biotech, biopharma, and biomedical device industries. Based in the San Francisco Bay Area, home to more than 400 bio firms, the Alliance provides a forum for collaboration, learning and best practice sharing of practitioners, executives and thought leaders in these uniquely demanding industries.

Because life depends on usTM, the Bio Supply Management Alliance supports continuous learning and improvement of bio supply management professionals.

Membership Enrollment open. Click here for information. Click here for fees & benefits.

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