Executive Briefings

The State of the Bio-Pharma Supply Chain: A Report Card

Vitaly Glozman, partner with PricewaterhouseCoopers, outlines the current state and future of supply-chain operations in the biopharmaceuticals industry, with an eye toward achieving both short- and long-term goals.

The biopharmaceuticals industry is far from the most advanced sector when it comes to crafting efficient supply chains. Still, says Glozman, "over the past five to eight years, I believe that the industry has made a lot of progress in establishing a supply-chain management foundation." Less than a decade ago, such concepts as constraint-based planning and balanced scorecards were new. Today, they are commonly found in biopharma companies.

One reason the industry is behind on supply-chain excellence lies in its relative youth. Traditionally, innovation has been reserved for the product itself. Only recently have companies been motivated to improve the way that items get to market. "The industry has been very profitable," Glozman says, "so a supply-chain focus on risks and cost has not been at the forefront of management concerns. But things are changing."

For biopharma companies, existing in a world of rising costs and unpredictability, the situation could be termed dire. Complicating factors include the presence of generic drugs and "biosimilars," aping successful drugs once they are out of patent. Still, Glozman remains optimistic. Companies are beginning to focus on "the disease instead of the molecule." The shift gives them a better perspective on the needs of the patient, while allowing for the bundling of certain drugs to fight a given disease.

To begin addressing change in the biopharmaceuticals industry, management needs to "take a small step back, and really think through the strategic road map for transforming the supply chain," says Glozman. They should work to balance three key dimensions of the problem - risk, cost and service. Otherwise, he says, they could act to improve one aspect of the supply chain while sub-optimizing another. Then they can proceed to create a "thoughtful" operating model, one that integrates manufacturing, information technology, business processes, balanced scorecards and regulatory requirements. "All are part of the road map to improvement," Glozman says.

To view video in its entirely, click here


Keywords: supply chain, supply chain management, inventory management, global logistics, supply chain planning, supply chain risk management, biopharmaceutical supply chain

The biopharmaceuticals industry is far from the most advanced sector when it comes to crafting efficient supply chains. Still, says Glozman, "over the past five to eight years, I believe that the industry has made a lot of progress in establishing a supply-chain management foundation." Less than a decade ago, such concepts as constraint-based planning and balanced scorecards were new. Today, they are commonly found in biopharma companies.

One reason the industry is behind on supply-chain excellence lies in its relative youth. Traditionally, innovation has been reserved for the product itself. Only recently have companies been motivated to improve the way that items get to market. "The industry has been very profitable," Glozman says, "so a supply-chain focus on risks and cost has not been at the forefront of management concerns. But things are changing."

For biopharma companies, existing in a world of rising costs and unpredictability, the situation could be termed dire. Complicating factors include the presence of generic drugs and "biosimilars," aping successful drugs once they are out of patent. Still, Glozman remains optimistic. Companies are beginning to focus on "the disease instead of the molecule." The shift gives them a better perspective on the needs of the patient, while allowing for the bundling of certain drugs to fight a given disease.

To begin addressing change in the biopharmaceuticals industry, management needs to "take a small step back, and really think through the strategic road map for transforming the supply chain," says Glozman. They should work to balance three key dimensions of the problem - risk, cost and service. Otherwise, he says, they could act to improve one aspect of the supply chain while sub-optimizing another. Then they can proceed to create a "thoughtful" operating model, one that integrates manufacturing, information technology, business processes, balanced scorecards and regulatory requirements. "All are part of the road map to improvement," Glozman says.

To view video in its entirely, click here


Keywords: supply chain, supply chain management, inventory management, global logistics, supply chain planning, supply chain risk management, biopharmaceutical supply chain