The pharmaceutical supply chain connects a wide variety of drug manufacturers and 60,000+ pharmacies and dispensing outlets. Effective pharmaceutical logistics supply chain management supports a range of critical functions including demand forecasting, inventory optimization and risk mitigation.
Getting drugs from lab to patients is complex, with many touchpoints in the process. Find out how pharma companies are building agility and resilience to deal with future challenges.
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Developing Life-Changing Drugs
Pharmaceutical firms rely on a complex supply network of distributors, pharmacies, manufacturers, hospitals and retailers to get their drugs into the hands of patients. This network is a mix of organizations with different goals and objectives, making it challenging to manage pharma supply chains effectively and ensure resiliency in the face of disruptions.
The drug development process requires large volumes of data, and analyzing and drawing meaningful insights from this information can be challenging. This is particularly true for temperature-sensitive drug products like biologics and vaccines, which must be shipped with specialized monitoring technologies to ensure the proper storage and distribution conditions are maintained (5).
Using digital technology to manage pharmaceutical supply chains can help improve transparency and agility in the face of disruptions. This includes leveraging the power of digital supply networks and multienterprise work management software to create and support shared incident response workflows, improving demand forecast accuracy and inventory management, and improving on-time/in-full performance and recovery from disruptions.
Managing the Supply Chain
The pharmaceutical supply chain is different from other business supply chains because it needs to ensure the right quantity and quality of drugs reach the correct place, customers, and patients at the right time. This is critical because any interruption in the drug supply chain could threaten public health.
This is especially true for temperature-sensitive drugs like biologics, which require specialized cold chain transportation and storage. These products can begin degrading or even becoming toxic if they are not kept at a specific temperature throughout the entire distribution process.
To address these challenges, pharma companies need to adopt agile and resilient pharmaceutical supply chain management strategies. This involves developing collaborative planning, forecasting and replenishment policies to improve inventory management and decrease procurement and delivery times. The resulting policies can also reduce stockouts and backorder value and optimize fleets and distribution centers. They can help mitigate internal and external risk and make the pharma supply chain more flexible and responsive.
Getting Drugs Into Patients’ Hands
When it comes to pharmaceutical supply chain management, getting the right drug to the right patient at the right time is everything. This is especially true for life-changing drugs and vaccines that require temperature-controlled transportation.
As a result, the pharma industry continues to place increased emphasis on enabling an agile supply network. Achieving that goal requires implementing the right logistics technologies to ensure real-time, global visibility into a supply network.
In addition, companies need to be able to identify and eliminate counterfeit drugs. This means implementing a wide range of logistical processes, from ensuring the right mix and location of factories and warehouses to vehicle routing analysis. It also means leveraging technology-enabled cold chain pharmaceutical logistics solutions to reduce the risk of temperature fluctuations during shipping. In addition, they must ensure that their supply chain meets DSCSA requirements. And they need to do all this while managing volatile demand and addressing supply network disruptions. Integrated telematics solutions in refrigerated trucks and containers enable real-time monitoring of temperature during pharmaceutical supply chain logistics.
Managing Risk
The pharmaceutical industry needs to be able to adapt quickly and effectively when disruptions occur. This requires a high degree of visibility, rigorous risk management and advanced technologies like 5G and mobile edge computing.
This technology enables companies to integrate data from multiple systems and provide end-to-end supply chain visibility, while also improving efficiencies through collaborative incident response and supply chain monitoring. The technology also improves agility by fostering a digital partner ecosystem and allowing organizations to implement shared workflows that span across teams.
Unlike other industries, pharma executives cite a lack of supply chain resilience as the main reason for their susceptibility to disruptive events such as natural disasters, cyberattacks and global trade disputes (Exhibit 1). But building resilience begins with understanding the risks.
