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Pharmaceutical supply chains have always been focused on product security, product protection and customer safety. Many past decisions have leveraged risk as the primary factor, making it easier to justify budgets and expenditures. Today, the safety of product and patient is still the top concern, but best practices, responsiveness and cost reduction are also critical.
Global expansion and variable margins in emerging markets, as well as diversification of product portfolios, highlight the value of supply chains and costs associated with eliminating 100 percent of service risks. And there is sufficient justification for setting a target of 100 percent, especially with existing and pending challenges such as:
• Evolving and Emerging Global Markets - Multiple-tier pricing structures and approval processes make market entry and sustainability challenging.
• Government Price Controls - New legislation is now impacting facility and production location selection.
• Track & Trace Regulation - Governments around the world are moving toward product serialization, and California has its 2015 pedigree mandate. Another example is the European Union's ratification of the Falsified Medicine Directive, which sets the stage for expanded use of serialization within the EU. These are key regulations that help protect the integrity and safety of pharmaceutical and medical supply chains.
• Sourcing and Quality Controls - Issues with global suppliers, particularly in Asia, continue to demand more inspection.
• Integrated versus Decentralized Supply Chains - Integrated systems create efficiency, and rapid organization realignments make adaptability critical.
• Logistics Service Providers Rationalization - Having fewer partners with a more global reach increases short-term flexibility, while reducing risk. But also consider costs and restrictions when selecting core LSP partners.
• Integration or Diversification of Supply Chains - Whether shared facilities, consolidated shipping, or integrated procurement and sourcing, the ability to add or shed business units while maintaining secure and seamless business execution is critical.
Due to additional pressures and uncertainties in 2012, it is important to ensure a short planning horizon for supply chain adaptability and rapid reorganization. An integrated, adaptable global supply chain that has full visibility and shared planning is needed to achieve profitable growth.
For pharmaceutical companies in 2012, supply chains will play a major role in their ability to adapt, consolidate or refocus their core business segments. The world will continue to throw new obstacles and challenges for moving products and materials into and out of specific markets and countries. But with the right supply chain configuration and adaptability, pharmaceutical and related healthcare supply chain leaders will overcome these obstacles effectively.
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