Creating a More Resilient Pharma Supply Chain
The pharma industry and its global supply chains constantly face new challenges and disruptions, if only because of their size. According to McKinsey & Company, the global value of pharmaceutical goods traded has grown sixfold over the past two decades, from $112 billion in 2000 to $629 billion in 2019.
Now, being consistently resilient is more critical than ever before. But how do you create an agile, robust supply chain that can handle potential challenges such as temp excursions, labor shortages, labor disputes, armed conflict, and mass shipping backlogs?
Here, we'll delve into how pharma supply chain leaders can create an adaptable supply network that delivers increased resilience for their operations.
The Challenges Facing the Pharma Supply Chain
The pharma supply chain is facing a variety of challenges due to its size, complexity, and regional dependence. Some of the common challenges include:
- Temperature Excursions: Temperature control is crucial to avoid spoilage and product degradation, but temp excursions can occur during transport due to fluctuations in temperature or handling.
- Labor and Capacity Shortages: Pharma supply chain teams may be affected by labor shortages or lack the capacity to meet increased demand due to limited shipping options or capabilities.
- Labor Disputes: Delays in freight delivery can occur when there are labor disputes, such as strikes or lockouts, at ports or airports.
- Armed Conflict: War and other armed conflicts can disrupt supply chains due to the closure of borders, transportation routes, or ports.
- Mass Shipping Backlogs: Supply chain teams may face unexpected delays in freight delivery due to mass shipping backlogs caused by pandemics, natural disasters, or other events.
To create greater resilience in the pharma supply chain, organizations must focus on taking proactive steps to assess their processes and build adaptability into their operations. There are several measures through which this can be accomplished.
Leveraging Technology to Mitigate Risk and Boost Efficiency
Technology can play an important role in helping supply chain teams become more agile and resilient. By leveraging technology such as artificial intelligence (AI), the Internet of Things (IoT), blockchain, predictive analytics, and big data, pharma supply chain teams can gain visibility into their supply chain operations and anticipate risks before they occur. This can enable them to take corrective action quickly and reduce the impact of disruptions.
AI, for instance, can be used to analyze data points such as temperature readings or labor disputes in real time, allowing teams to take proactive measures to avoid potential issues. IoT devices can provide granular insights into the health of products during transport and help detect any anomalies.
Creating End-to-End Transparency
Creating end-to-end transparency across the supply chain is a key factor in building greater resilience, as it provides visibility into operations and helps teams quickly identify and respond to issues. By connecting all stakeholders—suppliers, manufacturers, distributors, retailers, and logistics providers—under one platform, organizations can ensure that all relevant parties are aware of changes or delays in the supply chain. This helps teams anticipate and mitigate potential disruptions quickly.
In addition, organizations should consider investing in increased automation, such as automated order tracking and intelligent routing algorithms to optimize shipment delivery. This can help reduce manual errors, minimize waste, and streamline operations for improved efficiency.
Stress-Testing Through Disruption Simulations
Organizations can also reduce the risk of disruptions by stress-testing their supply chains through simulations. This helps teams identify any weak points in their operations, determine how prepared they are to handle unexpected events, and adjust their strategies accordingly.
Organizations should also consider leveraging external resources to assist with managing supply chain disruptions. These could include third-party logistics companies, freight forwarders, or consultants. These external resources may be able to provide additional capacity during periods of high demand, and they can assist in identifying weak points in the supply chain.
Supply Diversification and Sustainability
Finally, organizations should consider diversifying their supply chain networks to reduce the risk of disruptions. By diversifying and establishing alternative sources of supply, companies can ensure continuity of operations even when one supplier is affected by a disruption. This is a key consideration for organizations that have regional dependencies for specific goods or raw materials.
Additionally, investing in sustainable practices such as using renewable energy sources or reducing packaging materials can help pharma companies build resilience in their supply chains by reducing waste and increasing efficiency. This can even help organizations reduce their environmental impact, boost their reputation in the market, and increase customer loyalty.
Learn More About Supply Chain Resilience at LogiPharma
Creating a more resilient supply chain will continue to be a key industry driver throughout 2023 and beyond. Furthermore, there are other challenges facing the industry, and strategies to overcome them, that aren’t outlined in this article.
If you’d like to learn more about building a more resilient supply chain, don’t miss the next LogiPharma event. It’s happening from October 4th to October 6th at Westin Copley Place in Boston, Massachusetts.
Download the agenda and register for the event today.