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What is Pharmaceutical Supply Chain Management?
What is Pharmaceutical Supply Chain Management?

October 12, 2023

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Let's talk about the pharmaceutical supply chain. It's a perfect mix of planning, execution, and control of all processes related to the flow of information and materials, from acquiring the raw materials to the final delivery of the goods to the consumer. This process mainly includes producers, vendors, transportation companies, warehouses, distribution centers, and retailers. 

Even if supply chain optimization in the pharmaceutical sector sounds similar to other supply chains, it has a slightly different focus. Simply put, the pharmaceutical supply chain enables businesses to develop distinctive products and experiences for their customers. This includes every strategy an organization utilizes to offer its customers specialized added value and gain a competitive edge. 

Consequently, the pharmaceutical supply chain management process is designed to make sure manufacturing goes as planned, and products are available on time at pharmacies, health care centers, and hospitals as required. The crucial part of the pharma supply chain includes product development (R&D), marketing, operations, distribution, finance, and customer service. 

The pharmaceutical supply chain planning is currently facing ever-changing complexities at different levels. Furthermore, the pharma business models have also changed significantly over the years. The trend is shifting towards more result-oriented solutions, where integrated diagnostic and treatment solutions are the focus. That is why strategic supply chain management is crucial to developing a supply flow that ensures the appropriate medication or device is delivered to the right place, at the right time, and to the correct entity. 

How Does the Pharmaceutical Supply Chain Management Process Work? 

The production and logistics process of pharma supply chains requires strategic management. This includes the collaboration of key stakeholders between suppliers, distributors, business partners, and consumers from procurement to final delivery. 

The pharmaceutical supply chain's primary goal is to access the highest level of competitiveness in the market and scale profitability as the supply chains advance into a logistical system that is getting faster, more flexible, more personalized, more accurate, and more efficient. Without accessing high-level visibility, accurate processing is unthinkable. 

Effective supply chain systems consist of five key components: 

  1. Planning  

The planning process includes laying out a perfect plan for a product or service that involves everything from raw material procurement to final delivery. 

Once the entire supply chain is in place, the planning process provides key metrics to measure whether it is operating effectively and efficiently, delivering optimal value to customers, and meeting core business goals. 

  1. Procurement  

This process includes picking suppliers for the materials and services needed to manufacture a product. One vital step in procurement is setting up methods for managing and monitoring your inventory. An effective inventory planning software can come to your aid to streamline this process. 

  1. Production  

The production process includes organizing the activities required to get the raw materials, manufacture the product, inspect the quality, ship the package, and schedule a prompt delivery. 

  1. Delivery and logistics 

This process involves coordinating customers' orders, managing and scheduling deliveries, effectively executing shipments, accurately billing customers, and finally, receiving the payments. 

  1. Returns and recalls 

Reverse logistics is one of the most critical supply chain factors these days. In this process, organizations set up a streamlined structure for defective product takebacks and excess or unwanted inventory stocks. If businesses want to avoid and improve their reverse logistics processing, then agile inventory planning software is one of the best options to make it right. 

Three Effective Ways to Build a Resilient Pharmaceutical Supply Chain 

Resilient supply chains need three crucial elements: end-to-end transparency, regular reassessment, and reduced exposure to discrepancies. 

  • End-to-end transparency  

Interrupted visibility into a supply chain can be a significant risk for pharma organizations. A business must map its supply chain flow by tier to have end-to-end visibility and locate vulnerabilities. It's also essential to clearly understand exposure above supply, considering how products are developed, delivered, and stored because every stage reflects its potential problems.  

Getting a clear picture of everything happening at each stage requires gathering historical internal and external data sources via sales and operations planning software to enable your business to access maximum visibility and improved decision-making. 

  • Regular assessment 

Leading businesses often use various scenarios and simulation models to anticipate supply chain discrepancies, evaluate their potential impact, and mitigate their effects. For instance, during the coronavirus pandemic, some pharma companies used demand forecasting software to understand the implications of manufacturing slowdowns on the supplies of patient medications. This enabled them to deal with supply chain-related problems and find better and safer ways for their workforce to perform optimally and get the best solutions. Once an organization gets visibility into its supply chain, it can regularly assess possible future difficulties. 


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