The Grey Market

This is a transcript of The Axway Podcast of the same name.

CHAUGHTAI: “Grey market” refers to legal goods which are sold outside the normal distribution channels. And they’re done without having any relationship with the producer of that good directly. This frequently follows the form of what is called parallel trading or parallel importing. Entrepreneurs basically buy the products. They’re available cheaply. And then take the product and offer it for retail in their designated areas to actually gain significant profit from those products. It’s mostly doable because those products are not directly available in those markets.

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ANNOUNCER: From Phoenix, Arizona, this is The Axway Podcast. Here’s your host, Mike Pallagi.

PALLAGI: While a channel partner has a clear responsibility to adhere to the terms and conditions of partner programs, the burden of enforcing those T&Cs ultimately falls on the organization itself. So how, I wondered, can a track and trace solution help an organization protect its profits and brand equity by detecting potential “grey market” product diversion? Here’s Atif Chaughtai, Axway’s director of solution marketing for the Healthcare industry.

CHAUGHTAI: Because of the nature of the grey market, it is difficult or impossible, in some cases, to track the precise number of grey market sales. It’s hard to put a finger on “Okay, how many millions of dollars of grey market sales is happening for a particular product?” Importing — there are certain legal restricted items, such as prescription drugs. Drugs or firearms would be categorized as black market, as with smuggling the goods into the target countries to avoid import duties. Some prescription medication, most modernly popular and branded, can have very high prices in comparison to the cost of transporting those drugs there.

PALLAGI: I asked Atif to give us an example.

CHAUGHTAI: If you look at the drugs that are being distributed in Canada, it’s much more expensive than the drugs that are in the U.S. This varies from country to country. It’s mostly because a government has negotiated specific prices in their market or in their country. This opens up the potential for savings by the consumer to purchase these drugs from Canada or between the U.S./Canadian borders for significantly lower prices than the same drugs would cost in the U.S. pharmacies.

PALLAGI: What this situation calls for, Atif says, is a solution that allows you to integrate your supply chain from the manufacturers to the distributors. A solution that provides end-to-end visibility. You’ve probably heard about this idea before — end-to-end visibility. But what does it mean? What does it mean to actually integrate your supply chain? Here’s Atif again.

CHAUGHTAI: To actually leverage your massive product data, which might be in an ERP system, your line systems that are being used in the data manufacturing facility or in distribution facilities, along with your inventory systems. Or any other system that has captured the data about your production and about your distribution. We can actually bring it all together and give you a 360-degree view of what’s happening in your supply chain in real time or near-real time. Why real time or near-real time is important is because you want to be able to detect these things right there and then and stop it. There’s no point in chasing the diversion after even three months or six months after it has happened.

PALLAGI: It’s about monitoring all of these different data sources in real time and applying business rules to them, so that any problems can be detected, like product diversions, for example.

CHAUGHTAI: Let’s talk about what happens in the field investigation. Either you have an audit company that you have hired to actually check for these kinds of conditions throughout your supply chain, or a retailer who has gotten a product from a pharmacy that might have gotten products, and they are suspicious of the origins of the product or the distributors that were involved. They actually all need to have a way to authenticate the product that they have received. Now, with the emerging regulations around the globe, the U.S. has the (Drug) Supply Chain Security Act, and in Brazil, it’s ANVISA, that is promoting serialization and visibility into… visibility and identification into the whole manufacturing-through-distribution process. Then actually leverage some of these regulations that are in place to provide capabilities to these third parties either through a portal, where they can simply login and type in a product identification, that might be a combination of serial numbers or other encoded information on the bottle to authenticate with your master data and your events data that you have captured throughout the supply chain to verify that this product is real and it is coming from the manufacturer directly or the authorized distributor directly.

PALLAGI: Another aspect would be to actually leverage an automated authentication by using a solution that can expose data to certain APIs. You probably know that APIs are becoming extremely common throughout tech industries. Well, these APIs can allow you to pull off various moves, like authenticating product and sharing information that you’d want your consumers or the dispensers to have. I asked Atif one more thing: How can a manager use a track and trace solution to quickly detect anomalies? What capabilities should she expect from a track and trace solution?

CHAUGHTAI:  …the capability to define business rules, and define scenarios through those business rules. Those scenarios are basically your standard operating procedures or your normal business work. In real time, when we are collecting information from the supply chain, and those events are coming in, we can run those business rules and do correlation on the information coming in to identify any data that constitutes an anomaly outside of the norm or the normal behavior that we have defined in the standard operating procedures. Once we detect an anomaly, we can notify a manager that there is something outside the norm — doesn’t meet the normal behavior, doesn’t meet the thresholds you have set — to identify and quickly act on those anomalies.

To learn more about the DQSA and whether a cloud global traceability and compliance service is right for your business, please click here.

Delivering actionable intelligence tailored to each stakeholder

This is a transcript of The Axway Podcast of the same name.

ANNOUNCER: From Phoenix, Arizona, this is The Axway Podcast. Here’s your host, Mike Pallagi.

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PALLAGI: Operational intelligence — a category of real-time dynamic, business analytics that delivers visibility and insight into data, streaming events, and business operations — seems to be getting more and more press lately. Organizations seem to be realizing that there are lots of opportunities to pull together data and make better business decisions. So to learn more about this, I caught up with Laurent Van Huffel, Axway’s Vice President of Sales for Operational Intelligence, and asked him what’s driving today’s enterprises to use operational intelligence to improve operations?

VAN HUFFEL: There are multiple reasons for why the enterprise will use operational intelligence. Let me just start with a few things. One is, typically organizations, or specifically operations, are organized in silos. So many of the staff, or business operations people who make sure that the executions of the business process happened as it should — and at the end of the day, the commitment that had been made by the company to their customers are fulfilled every day — have a difficulty to ensure that this is happening, because they don’t have an end-to-end visibility of the executions of this process. So they’re kind of blind: they can see one piece but not the whole (of) pieces.

PALLAGI: Laurent said another reason is that organizations are just tired of being reactive rather than proactive. Historically, when something goes wrong, like a payment not being made, for instance, companies often learn about the missed payment only once they get a complaint from the unpaid party. And that creates a bunch of issues, everything from damaged reputations to missed SLAs. And all of that can be very costly. So being able to resolve process issues in real time before it impacts your customers’ businesses is one of operational intelligence’s big perks. But there are others, too.

VAN HUFFEL: Three major benefits, or three major business drivers, for which you know you would build a business case for companies: one is risk mitigation, the second one is operational efficiency, and the third one is customer experience improvement.

PALLAGI: Before Laurent goes into all that, it’s important to keep in mind that every business process has multiple stakeholders who work together to execute the business process straight through to the end. Supervisors, executives, managers. Sometimes payments even have to be manually returned. There’s still no shortage of things for actual human beings to do in this process. But anyway, here’s Laurent again.

VAN HUFFEL: Operational intelligence, first and foremost, has to deliver actionable intelligence that is customized and tailored to each stakeholder, because each stakeholder has different operational objectives and therefore they have different concerns. And those concerns are about what could happen to prevent them (from meeting) the objectives. You need to deliver contextual content in the form of digital dashboards or alerts to different people.

PALLAGI: Laurent said that operational intelligence solutions should be agnostic from the underlying competing infrastructure so that they can collect information from different sources and create high-level, end-to-end views. And then as the operational intelligence solution is collecting data, it should crunch the numbers — a whole raft of numbers, really — to figure out ahead of time what might go wrong, a sort of high-tech prognostication.

VAN HUFFEL: So, for instance, you have an order that has been stuck into a business step for too long. Or you have an abnormal number of payments that failed their STP route and are going into manual repair. Why would there be a concern, for instance, is that because if you have way more (payments) going for repair than (usual), maybe you’re going to exceed your manpower capacity to repair those payments fast enough. And therefore you may miss an important payment cut off.

PALLAGI: So it collects real-time data from multiple sources, analyzes this information into a matrix that’s been configured to create the business logic to address each of the concerns of each of the stakeholders, and it publishes that information in the form of actionable intelligence to dashboards or via alerts so that everyone who needs to know about it will know about it.

VAN HUFFEL: It’s not just pure real-time information as well. You need to compare real-time information with historical, contextual data.

PALLAGI: For example, maybe you might want to compare your activity today to a typical day’s activity throughout the last month.

VAN HUFFEL: Depending on who you are, you are going to expect different type of information because that information has to address the specific objective that you have. You will expect personalized and production-ready solutions in a few days. You can deploy… There is no coding that comes into play. It’s all point-and-click, drag-and-drop, in order to configure the right business logic to create those dashboards. And again you are going to create the logic depending on… To provide the right content to the right persons.

PALLAGI: Laurent noted that “an operational intelligence solution is very incremental.” And what I gathered from that is that it’s got a quick learning curve — you can customize dashboards in about two or three days, but then once you do, you’ve undertaken a journey, rather than arrived at a destination. Because you’ll start with a dashboard that’s configured one way, but as business conditions change, modifications will almost always be necessary.

VAN HUFFEL: And that’s perfectly okay. You will maybe you want to modify the layout or you want to add additional KPIs or new information in order to meet new demands or new changing conditions. Because there was a dashboard editor that allows you to make those changes extremely easily and very quickly, then you will continually adapt the content of the dashboards to your business, to your own test, if you will, and so on. Very authoritative, very incremental. It’s quick, it’s agile, it’s contextual. You can mix real-time information with historical, contextual information. You can create reports. You can receive alerts if you are not in front of your computer.

To learn more about operational intelligence, please click here.