Digital disruption Learning from Global Best Practice

Thailand Competitiveness Conference 2017

Carlos Cordon

THE LEGO Professor, IMD

… for example, ebookers uses big data to

personalize the user experience…

MACBOOK SMARTPHONE

Sporting: Social Media and Big Data

Photo source: IBM.com

Digital Transformation Using Big Data, IMD Lausanne

May 21st, 2015

The evolving eco-system

Source: Analysis

Sports

equipment &

apparel

Commercial

partners &

agencies

Data & IT

solutions

Sports clubs/

teams

Sports

federations /

associations /

events

Sport Events

and Travel

Devices Software and

analytics

Universities &

research

Coaching /

Training

Nutrition &

Supplements

Social media

Illustrative

A combination of activity tracking,

training and social media platform

Proprietary apps and 3rd party devices as data capture devices

Source: Strava.com

Aggregated user data creates interesting applications to find new routes

Source: Strava.com

Safer cycling and pedestrian pathways

Using the data of millions of Strava activities they are working with departments of transportation and city planners, as well as advocacy groups to create better urban planning

Source: Strava.com

Adidas: Omni-Channel

- Everything is online… every single item in any store in the country

- Everything is on the store, that is on-line...

- Consumers could buy in the store, on-line, on-line in the store, collect in the store, delivered at home....

Omni-Channel: the consumer could buy anywhere using any channel

Adidas: the omni-chain to enable the omni-channel

• All stock available real time to everywhere

• Every store is a warehouse

• RFID everywhere

• Logistics from store to store, store to client, reverse logistics… everything could go everywhere

… an amazing example of a pharmacy distributor

and retailer: Mediq (The Netherlands)…

• From “moving boxes” to

“taking care of the patient”

• Our mission: Mediq is a

trusted partner in

healthcare, helping people

to live their lives to the

fullest potential

• Market leader in The

Netherlands with 200+

owned pharmacies and

150+ supplied pharmacies

14

… caused by new government policies in the

NL to focus on improvement in pharmacies …

Research: Incorrect medication use leads to avoidable hospitalizations

• 2,4% of all hospitalizations are medication-related

• 19.000 avoidable hospitalizations per year in the Netherlands

• Avoidable costs: € 85 million

Recommendations: Increase guidance in pharmacotherapy

Improve compliance to guidelines

Increase support to prescriber in complex issues

Focus on high-risk patients

Source: HARM 2011

… that triggered a new Mediq’s ambition and

journey …

15

Current environment Future environment

• Added value of pharmacy not

transparent

• Compensation for distribution is

based on volume

• Tangible added value of

knowledge-based services

• Compensation for care and

patient outcomes

Source: IPC-team

Mediq introduces new program:

Integrated Pharmaceutical Care (IPC)

G

F Z

… a big data journey ….

Focus on medication Focus on patient

“ Expensive when necessary,

cheap if possible”

“Expensive if possible, cheap when necessary”

Industry driven Socially driven

From pharmaceutical compounding and distribution to

customized patient care

… of improving patient care …

Patient with cardiovascular problems

Patient with diabetes

Patient with problems in the respiratory tract

Other

Review

Coach

Use of acetylic salicylic acid in combination with clopidogrel for more than one year

Add statin to medication when LDL is > 2,5 mmol/L

Start ICS if COPD patient has more than 2 exacerbation a year. Evaluate ICS.

Gastric protection, dose correction, evaluation of medication with no indication

Monitoring of compliance on statins and blood pressure medication

Monitoring of compliance on metformin

-

Monitoring persistence (patient did not show up for first or second refill)

Monitoring of compliance on tiotropium

… all stakeholders win: pharmacists,

physicians and patients are enthusiastic …

18 Source: IPC-team

Ceased unnecessary

Plavix use Patient used Plavix 6

years without valid

indication.

•€3.500 unnecessary costs

•Increased bleeding risk

Reactions stakeholders Examples successful interventions

Added statin to

therapy Diabetes patient’s

cholesterol level was

checked after signal in

IPC tool: value much too

high

“The pharmacist puts my health at

the centre of attention”

“Mediq’s IPC helps checking repeating

prescriptions.”

Mediq’s pharmacies: “When can I join the

program?”

Pharmacists

Physicians

Patients

19

… reducing distribution errors and costs by

centralising and robotizing repeat medication …

– 80% of drugs are

repeated

medication

– 99% of patients go back to the same pharmacy

… MEDIQ looked beyond industry to their

ecosystem …

20

PATIENT/CUSTOMER

PHARMACY

WAREHOUSE

MEDICAL DOCTOR (GP)

INSURANCE COMPANY

PHARMACEUTICAL COMPANY???

HOME CARE/HOME DELIVERY?

50% OF MEDIQ PROFITS COME

FROM INSURANCE SAVINGS !!!

… MEDIQ is also looking at revenues and profits

from other ecosystems …

21

PATIENT/CUSTOMER

MEDICAL CARE INSTITUTIONS

WAREHOUSE

MEDICAL DOCTOR (GP)

INSURANCE COMPANY

• MEDIQ AGREES A DAILY FEE

PER BED FOR MEDICATION

FOR ALL BEDS

• MEDIQ PRESCRIBES DE

MEDICATION WITH THE GP

• THE MEDICAL CARE

INSITUTION DELEGATES TO

MEDIQ THE PRESCRIPTION

FULFILLMENT

• MEDIQ TAKES THE RISK OF

THE INSURANCE

22

Industry 4.0: Key Drivers

The Internet of Things

Big Data and Artificial Intelligence

Robotics

3D printing

Digital Lean

Robotics: Sensors + Big Data + Artificial Intelligence

Robots in the past: separation man - machine

Robotics: Sensors + Big Data + Artificial Intelligence

Key drivers: 3D Printing

The 3D printer is a machine that builds things by adding successive layers of material under computer control to create an object.

GE and Boeing are using it to make real parts, not only prototypes. Hearing aids

More than 10,000,000 3D printed hearing aids in circulation worldwide

Digital lean: Using digital to boost lean

• Digital tools to make lean tools easier to use and more powerful: – Using sensors to automatically make spaghetti diagrams – Use of big data to find mistakes outside the factory (i.e. Tesla) – Digital “poka-yoke” tools

• Digital tools to make possible the use of lean tools in new places: – Workload balancing in stores (i.e. Percolata) – “SMED” in the field (i.e. Telecom base stations maintenance)

• Digital tools to spread the use of lean: – Using social media to share best practices among co-workers

(i.e. Whatsapp)

Digital lean: Spaghetti diagram

Digital lean: Lean meats the smartphone

- Change - Easy to use - Eliminate waste - Empower the user - Engages

… it is not about finding answers to existing

questions but finding new questions …

• From: how can I have a better forecast?

• To: how can I make sure that patients come for the

product at the right date?

Exploring new questions

• “Computers are useless. They can only give you answers”. Pablo Picasso

… you must use new methodologies and burn the

old ones …

Explore the

world

Why: Golden Circle

Business Model Canvas

Profit Formula

Lean Start-up

UNLEARN LEARN

… then expand the why of the company …

Simon Sinek

… define the business model …

Customer Value

Proposition: Value offered to the market

Segment of customers

Communication and distribution

channel

Relationship with clients

Profit Formula: Revenue streams, Pricing, Cost structure

Key Resources

Key Partners

Key Processes

… define the Profit Formula ….

ROE =NetIncome

Sales´Sales

Assets´Assets

Equity

ROE =M argin´Assetturnover´Leverage

The traditional Dupont formula

… we are moving from traditional Profit Formulas …

ROI =NetIncome

Sales´

Sales

Pharmacy´

#Pharmacies

Investment

ROE =M argin´Salespharmacy´Pharmacyinvest

Old Mediq Profit Formula

Based on margin on products

… to new profit formulas …

ROI =NetFee

Transaction´

#Transactions

Client´

#Clients

Investment

ROI = NetFee´Re peatedtransactions´Clients

New Mediq Profit Formula

Based on fee per service

… and sharing profit formulas …

ROI =Savings

Client´

#Clients

Insurance´

# Insurance

Investment

ROI = Savings´Clients / insurance´# insurance

Sharing Mediq Profit Formula

Based on savings on hospitalization costs

… and fast implementation through lean startup …

THANK YOU VERY MUCH