Originally Posted Oct 5, 2022

The PAXAFE team recently had a blast meeting with old friends and making new ones at LogiPharma 2022 in Boston, MA.

Ivan Castro and Jacqueline Diaz repping the PAXAFE booth

 

Here are some of my favorite takeaways from the trip:

ONE:

Yes, hardware is commoditized, but it’s not created equal

 

I’ve always touted the commoditization of hardware — this notion that all of the IoT sensor companies use mostly the same components, similar contract manufacturers, yield similar certifications, etc. and there’s very little that separates them.

I was wrong. At least through the lens of Pharma.

Contrary to commoditization, pharmaceutical companies are noticing a large disparity when it comes to hardware performance (e.g. ping rate consistency), platform offerings, overall service and price.

As such, they’re implementing parallel sourcing strategies to mitigate risk and create a competitive environment that equips them with the optimal device-agnostic visibility control tower.

TWO:

All of a sudden, sensor companies want to be more than sensor companies

 

On the other side of the equation, most sensor companies are sick of being known as sensor companies.

They see that pharmaceutical companies are starting to leverage sensor data to develop their own advanced capabilities or partner with other device agnostic intelligence software providers, and the sensor companies want to acquire downstream capabilities.

They are starting to talk about investing into advanced intelligence capabilities in a meaningful way, but the jury is still out on their ‘Make vs. Buy’ rationalizations.

THREE:

Visibility cannot be a human problem…it must be a machine problem

 

The pharmaceutical appetite for ‘advanced capabilities’ and ‘operationalizing visibility’ has matured.

Gone are the days where live-streaming location and condition data are enough. Pharma companies now understand that in order to get any value from this feed of data, they need to invest in data teams to interpret and visualize the data, intervention and ops teams to coordinate between carriers and customers, etc.

Before long, they start to question why they made that original investment and what the actual ROI of this visibility program will ultimately be once all of the manual labor required to support is in place.

Now, Pharma companies are asking how they can seamlessly access data to quantify OTIF risk, automate intervention and predict future events impacting OTIF — all at scale and with minimal human intervention.

FOUR:

Goodbye Passive, Hello Active!

 

There is finally a universal acceptance that real-time, active IoT will fully cannibalize passive, non real-time data loggers. This is coming from the same people and companies that — as recent as last year — were saying that real-time visibility was going to be reserved for high-value, high-criticality and/or high problem lanes. Some of the leading sensor companies were proclaiming that Passive is here to stay; that Active is just too expensive, not enough cellular infrastructure and not enough value.

This year, for me, the writing is on the wall — almost every single pharmaceutical company I spoke with (40+) had ambitious intentions to get to 100% real-time visibility in the next 3–5 years.

That being said, I do think it would be wise to temper that expectation, as shifting from passive to active is a significantly longer and more arduous journey than what most project.

FIVE:

Few brave industry pioneers are showcasing their progress from investments into intelligence

 

There are a few (<5) large pharmaceutical leaders that I spoke with pushing the bounds on AI-enabled visibility and risk management investment, and are and have been investing into a subset of predictive capabilities, advanced risk management, digital temperature management, data contextualization and other advanced capabilities for at least one (1) or more years (and are speaking about it publicly).

It seemed that most other ‘large Pharma’ were either:

1.) just starting their real-time visibility journey by testing active IoT sensors

2.) are in the process of implementing active sensors, OR

3.) have recently implemented real-time active sensors and are now starting to talk about advanced capabilities.

Meanwhile, mid-size Pharma was either:

1.) not making investments into real-time, and trying to digitize and extract value from their passive data, OR

2.) just starting their real-time visibility journey by testing active IoT sensors.

Bonus Hot Takes:

— Prediction and predictive capabilities will be the new ‘buzz word’ and ‘cool factor’ for the next 2–3 years.

The challenge will be separating real capability from imposters. 3PLs to sensor companies — everyone says they can offer an ETA — but is it any good?

That’s the challenge Pharma will have to parse through across the board with advanced capabilities.

From my perspective, there’s typically a strong correlation between the size of the DS and ML teams (as a percentage of overall team size), and the strength of the advanced capability being offered.

— In 2–3 years, companies will realize that the ROI on predictive capabilities will be magnified through automated recommendation. Of course, we already know what this looks like on the consumer side. If not, just ask Ronnie Cheng.

Before long, intelligence layers in your visibility control tower will be able to tell you to enhance your packaging thermal life by 10% on a particular lane.

Or to stop using a reefer between February and April on a particular leg, because it’s causing overcooling.

Or to change your shipment SOP to leave 2 hours later to improve on-time-delivery (OTD) by 20%.

In order to see this 2–3 years from now, you need to start with that dot on the map today. There’s no way to leapfrog around it.