Home' Forge : Vol 1 No 4 Contents 101
Can innovative supply chain
management assist in commercialising
Advances in technology are
fundamentally changing the way that
many industries operate -- and in health
care, the changes are potentially life-saving,
and good for the Australian economy.
But frst, we can adapt our supply chain
systems to cope with demand.
In a world where the outsourcing of
manufacturing to foreign companies is
the norm, the idea of adapting a localised
approach to managing the development
and distribution of new sophisticated
stem cell--based therapies seems absurd;
however, according to Dr Peter O'Neill
from Monash Business School, 'going
personal and local' could be an answer
to providing cost-effective solutions to an
overburdened health system. Regenerative
medical therapies using human stem cells
are breaking through from expensive and
often inaccessible interventions, to genuine
healthcare solutions provided by local
'One drug suits all' versus custom-
made health care
Regenerative therapies are complex and
diffcult to manufacture to the precise
specifcations demanded by regulators
in Australia and other Western nations.
The traditional pharmaceutical
'product' has a 'one drug suits all
patients' approach. Products are
approved according to the specifc
chemical, manufacturing and
distribution processes advised to
regulators. Any deviation can result in
the loss of licensing for that product.
Pharmaceutical manufacturers have
therefore developed sophisticated
processes and quality-control systems
that enable reliable production on a
massive and centralised scale.
Dr O'Neill believes that regenerative
therapies that are custom-made to each
individual patient are the future. These
therapies will use a patient's own stem
cells as their base. They could require
careful transport between patient
and laboratory, where the cells are
'transformed', and then transferred back
into the patient's body; however, each
supply chain movement adds to the
price, and thus reduces the availability
of what could be vitally important
'You could imagine that having to
transfer that material from Australia
to Asia and then back again would
substantially add to the cost of the
treatment,' O'Neill says.
These are some of the challenges that
O'Neill and his team at Monash Business
School have been working on with
colleagues in the United Kingdom from
Newcastle University and the National
Biologics Manufacturing Centre.
'Some of the medical science is already
here,' O'Neill says. 'The regenerative
medicine industry needs to develop
ways of distributing its products safely
and effciently, and in line with
Rather than long, complex supply
chains, O'Neill says that a unique
business model with on-premises
'manufacturing' may prove to be the
most effective distribution plan for
He envisages dozens of healthcare
centres scattered throughout commercial
and residential areas of a city or region.
These facilities would offer both
consultative (specialist and general
practitioner) services and regenerative
medicine laboratories on site. This
would mean that the transportation
of cell material could be kept to an
'A doctor could recommend a particular
regenerative therapy, and order it from
the lab, possibly in the same building.
The lab could produce a custom product
-- for example, an 'autologous' remedy,
using a patient's own cells -- and have it
ready for the patient on the same day.'
O'Neill says that advanced
manufacturing techniques, including
sophisticated robotics, could be
successfully applied to the low-output
but high-value laboratory work
involved in regenerative medicine.
This would ensure that each product
was produced in line with an approved
Some frst steps; small yet effcient
Contrary to many people's thoughts
on economies of scale, smaller does not
have to mean less effcient.
'It can also mean more tailored,
personalised products delivered on
demand, at reasonable price points.'
O'Neill admits it will likely be a slow
economic transformation -- but he notes
that the pieces of the puzzle are being
assembled now. Franchise business
models, for example, are providing
an ideal management system for a
large number of similarly combined
laboratory and practitioner facilities.
'It is up to both the science and
engineering communities to work
together on effective therapeutic
solutions,' he says, noting that medical
innovation also requires commercial
application in order to succeed.
'Only therapies that deliver affordable
and life-changing medical treatments to
patients will be successful in the coming
decades,' O'Neill says.
Dr O'Neill comes from an engineering
background and has spent 20 years as a
project manager across the construction
and manufacturing industries. He
is currently a senior lecturer in the
Department of Management at Monash
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