Addressing the Gaps of the Pharma Supply Chain in the Post-Pandemic Era

Owing to the global volatility triggered by the COVID-19 pandemic, inflexible supply chains and insufficient safety nets have drawn attention, leading to delays in both commercial and clinical production processes. This volatility has exposed deficient planning, delays in drug development, product shortages, and inflexible supply chain networks. As a result of these supply constraints, manufacturers are undergoing a paradigm shift to ensure agility, resilience, product availability, and safety.?

Pharmaceutical leaders have now realised that their traditional methods of supply chain management are insufficient for handling such challenges. This has created an opportunity for industry leaders to rethink their supply chains and shift from a dynamic to a strategic approach.

Impacted Areas of the Pharma Supply Chain

1. Visibility - A proven strategy to ensure minimum disruption is to have an unobstructed view of the various value chain elements, such as inventory availability, market demand, supplier capabilities, and manufacturing capacity. However, to reduce risks and prevent potential losses, businesses will need to consider more innovative ways of comprehending visibility across function and category. For increasing visibility, automation of time-consuming, expensive manual operations as a single source of truth is necessary.
2. Inventory Management - The global lockdown amid the pandemic had caused a halt in the stocks-in-transit spread out throughout the upstream and downstream stakeholders in the supply chain. This caused a massive shortage of essential goods and affected local manufacturing units. By comprehending inventory status, short- and long-term forecasts, supplier information, and delivery status, procurement leaders can close these gaps in the supply chain process.
3. Supplier Network - Depending on a limited network of suppliers can cause unexpected delays and cost uncertainty for pharmaceutical goods. For instance, the pandemic's demand peaks exposed many organisations to delays, leading to a lack of essential supplies like PPE and ventilators. Organisations are under increasing pressure to diversify their supplier bases as a result of constrained supply chains and the shortages they have caused.
4. Geographical Shifts - In a worldwide market that is continuously changing due to geographic variables, obtaining materials is one of the largest issues facing pharmaceutical procurement teams. The desired source for an ingredient may no longer be available, and shipments from that country may be subject to tariffs that significantly increase costs beyond anticipated timelines. A procurement department is under extreme pressure because it must keep track of, oversee, and include each one of them in its sourcing procedure.
5. Logistic Capabilities - The last-mile function along the entire value chain is in charge of meeting customer demand, which makes logistics and distribution more important. The effectiveness of production will be complemented by adequate planning for the effective distribution of finished goods to various delivery services, pharmacy chains, and pharmacies.

Strategic Imperatives for Pharmaceutical Supply Chains

To stay afloat, companies need to get past the traditional buyer mindset. They must provide value to businesses by driving healthy collaboration between their procurement teams and their suppliers to drive productivity, increase savings, and lower unnecessary supply chain risks.

Mentioned-below are some strategies that can help procurement professionals in creating agility and managing complexity.?

1. Digitising the Supply Chain - Automation and digitisation, or creating a digital supply chain, are the most efficient ways to optimise and streamline the supply chain. Implementing a cloud-based, unified software system that provides real-time data, has robust reporting capabilities and demand sensing technologies, and easily interfaces with current systems can be effective. Blockchain, AI, IoT, machine learning, and other emerging technologies can also be utilised for attaining real-time visibility, automating tedious tasks, and doing predictive analytics. Aside from redesigning their supply chains, businesses may also optimise process flow, implement best practices, negotiate better contracts, source cost-effectively, and analyse vendor performance with the help of external procurement specialists.
2. Tailoring Inventory - Big pharma companies frequently take a one-size-fits-all approach while maintaining huge inventory and offering high service for all of their products. Amid diverse portfolios, custom treatments, and a rising consumer base, it would be far more effective for leaders to categorise their supply chain based on multiple criteria such as product kind, product value, demand, consumers, and markets. Demand fluctuation, one of the prime challenges of pharma businesses can also be dealt with by the use of tailor-made supply chains. This would be helpful in optimising inventory for each segment, boosting productivity, elevating service standards, and reducing the production strain of manufacturing units.
3. Deriving Powerful Insights - Extracting the right insights from analytical capabilities can reveal untapped value to nurture cross-functional collaboration and place procurement at the centre stage. These insights can break the cycle of inefficiency and enable each function in charge of product planning, positioning, and sales to seek out prompt and higher-level engagements with procurement. Furthermore, this will pave the way for improved visibility, teamwork, and an analytics-focused procurement transformation which can elevate the corporate performance.
4. Raw Materials Nearshoring - With the onset of the coronavirus pandemic and growing market demand for critical goods and APIs, the idea of nearshoring has attracted industry-wide C-level attention. Nearshoring is the technique of moving specific operations, CMO and key supplier operations to emerging markets and nearby nations. As a result of such competitive forces, regional pharmaceutical supply networks have now replaced global supply chains. This strategy is helpful for trimming expenses, especially for shipping and customs clearance.

Conclusion

While every sector will inevitably be impacted by supply chain digital transformation, the need is critically urgent in the pharmaceutical industry. Drugs are among the most regulated and delicate goods in the world, and their supply chain needs to be able to account for their fragility while advancing the industry's development and meeting evolving consumer demands.?

Reinventing this supply chain demands high investments and change in perspective from global top-tier management and supply chain leaders.

For remodelling their pharmaceutical supply chain, leaders can replace their manual operations with Procol’s procurement software. Our next-generation software helps businesses gain a competitive edge and scale procurement operations via one user-friendly platform featuring solutions such as supplier management, spend analytics, eRFx, smart eAuctions, contract management, and much more. Speak to our representative today and explore how we can transform procurement for your business!