By definition a supply chain management in pharmaceutical industry comprises planning, execution and control of all activities that include flow of materials and information. It follows the materials right from their purchase to their final delivery as a product to the customer.
Supply chain management optimises the flow of goods, services, and information. It ensures timely, cost-effective product delivery. So, how does it help the pharma supply chain process flow? What are the various roles of the management system? Let’s find out.
Roles in Pharmaceutical Supply Chain Management
As per researchers, there are many variations on this basic structure of the pharmaceutical supply chain. The main reason behind it is constantly developing players. The key players of this chain enable it to run smoothly and efficiently. Let’s have a look at these players.
Pharmaceutical Manufacturers
The first player in this supply chain management in pharmaceutical industry aims to supply several finished products. Such products match the demand from the pharmaceutical sector.
These manufacturers undertake the responsibility of distributing drugs from their facilities to wholesalers. Ir, they directly supply products to pharmacies (these include retail chains, mail-order and specialty pharmacies, hospital chains and health plans).
Therefore, there is no doubt that pharmaceutical manufacturers have the most influence over the prices. It is because they can assess expected demand, future competition and projected marketing cost. Such factors help them to establish the wholesale acquisition cost (WAC) or list price.
Wholesale Distributors
Upon manufacturing the products move to its distributing phase. In this phase of the supply chain management in pharmaceutical industry, the distributor “distributes” products from the manufacturers to various customers. Many wholesalers cater to a wide range of customers while others specialise in selling specific products like biologics.
So, that is what distributors do-they get the product to the retailers. However, in between the distributors and insurance companies, there is a third-party company that acts as an intermediary.
Their role entails looking after tasks such as creating lists of medicines, handling insurance claims, and discussing prices and discounts for insurance companies. They are PBMs. Let’s see their role in the supply chain management in pharmaceutical industry in detail.
PBMs (Pharmacy Benefit Managers)
PBMs do not have a direct link but rather work as an intermediary in supply chain industry. They work with health insurers, employers and government programs to manage prescription drugs that will benefit patients.
Their job also entails negotiating drug prices with drug manufacturers and determining which drugs fall under a patient’s insurance plan. They also manage formulas which is a list of covered drugs.
They also engage in negotiations with pharmacies to determine drug prices, handle claims, and offer medication therapy management services to patients. Ultimately, Pharmacy Benefit Managers (PBMs) play a vital role in managing the costs of prescription drugs in supply chain management in pharmaceutical industry. They ensure that patients can access secure and effective medications.
Supply chain management is always in a state of flux, especially after COVID. So, being responsive is the only solution to keep up with it. To do so, companies need effective management strategies in their pharma supply chain solution. This includes identifying problem areas or challenges encountered by the pharmaceutical wholesale distributor.
Strategies for Effective Supply Chain Management
Strategies help to overcome all the challenges in pharmaceutical industry. Through supply chain optimisation, you can identify all problem areas and address them. Such areas include:
Inventory Management and Optimisation
Markets are expanding, and distribution channels are increasing. So, where is the optimal location for your inventory in the supply chain? Perhaps you can reduce last-mile delivery expenses in your supply chain management in pharmaceutical industry by housing inventory in warehouses situated close to your customers.
Demand Forecasting and Planning
A significant factor of pressure on supply chains is the need to meet demand. By forecasting demand and ensuring an efficient supply, you can more effectively procure and distribute goods in a timely and cost-efficient manner.
Risk Management and Mitigation Strategies
From port closures and pandemics to tariffs, it is beneficial to foresee potential disruptions in the supply chain. Incorporate resilience into your supply chain procedures by utilising the appropriate tools, accurate forecasting, and trustworthy third-party logistics (3PL) partnerships.
Customer Expectations
Customer demands for reduced lead times and more responsive service (commonly referred to as The Amazon Effect) are reshaping the contemporary supply chain. This places pressure on operations, elevates fulfilment expenses, and heightens the requirement for technology in the supply chain management in pharmaceutical industry.
Fundamentals of a Robust Pharmaceutical Supply Chain
Since operations like a track and trace system for pharma packaging India play a crucial role in ensuring the availability, safety, and timely delivery of medications to patients. Let’s see its importance in detail.
Compliance with Regulatory Requirements
The drug industry follows a lot of rules. They need to make sure they make medicines safely and follow the rules in different countries. This is a complex challenge that is also time-consuming and costly. .
Data-Driven Decision-Making
Optimising the supply chain process requires a harmonious coordination of all departments and units of an organisation. Various management software solutions are readily available, facilitating the seamless collaboration of a business’s diverse departments.
For instance, appropriate software can enhance the synergy among your sales, inventory, and finance systems. These software platforms can centralise data, enabling all systems to access pertinent information and thereby streamlining all business operations.
Numerous tools exist to aid in data analysis, providing invaluable insights into your market and customer behaviours of supply chain management in pharmaceutical industry. Understanding customer preferences, shopping habits, and seasonal sales patterns is of utmost importance. Therefore, it is imperative to conduct thorough data analysis before making critical business decisions.
Integration of Technology and Automation
One of the main ways technology makes supply chains work better is by giving customers instant, useful information. Supply chain management in pharmaceutical industry uses things like sensors, RFID tags, and other tracking tools to get real-time data about our stock, how management moves things, and other supply chain stuff.
Then the company uses this data to make smart choices that can make things work better, reduce waste, and make everything more efficient. This quick and useful data helps management spend less money and be more precise, which is a major concern area for supply chain companies.
Collaboration and Communication within the Supply Chain
With the help of technology, companies can also improve collaboration with its supply chain. They can do so by providing a different platform for stakeholders to share information and work together towards shared goals.
For instance, using software for supply chain management in pharmaceutical industry allows manufacturers, suppliers and logistics providers access to the same data. They can collaborate in real time and optimise flow of goods and materials.
Last but not the least, technology can simplify the process by automating many manual processes that are time-consuming. For instance, using automation, companies can optimise inventory management and reduce the need to enter data manually.
With all such fundamentals and strong planning in place, you cannot still ignore the need to prepare for challenges. In fact, there are quite a few challenges that the pharmaceutical industry might encounter. Read on to find below, so you can take preventative measures.
Challenges in Pharmaceutical Supply Chain Management
Shortages of Medicines
Medicine shortages are getting more common because making and delivering pharmaceutical products is getting more complicated. This can make patients wait longer for treatment and make their treatment more expensive.
More Demand for Personalised Medicine
People want medicine that’s made just for them, and this is making the supply chain management in pharmaceutical industry more complicated and personalised.
Money Problems
The cost of making, delivering medicine is going up. Therefore, the companies need cost-effective solutions. That is where supply chain management comes into the picture.
More Competition
Many companies are competing so they need to use supply chain management in pharmaceutical industry wisely to stand out from the others.
FAQs:Supply Chain Management in Pharmaceutical Industry – Roles, Strategies and Fundamentals
How can pharma companies improve supply chain resilience?
Pharma companies can enhance supply chain resilience by diversifying suppliers, adopting digital technology for real-time tracking, and stockpiling critical medications. Additionally,developing collaborative relationships with key partners and continuously assessing and adapting to changing regulatory and market conditions is crucial.
What is a pharmaceutical supply chain?
When processes and entities participate in the production, distribution, and delivery of pharmaceutical products, from raw materials to end consumers, that is a pharmaceutical supply chain.
Why is pharmaceutical supply chain management important?
Pharmaceutical supply chain management is vital for ensuring the timely and reliable delivery of safe and effective medicines, protecting public health, and complying with complex regulations and quality standards.
What roles are important in the pharmaceutical supply chain?
Manufacturers, distributors, wholesalers, pharmacies, and healthcare providers work at different levels of the pharmaceutical supply chain. They collaborate to ensure the timely and secure delivery of products.
What strategies does the pharmaceutical industry follow to optimise supply chain efficiency and ensure product quality and safety?
Pharmaceutical industry strategies for efficiency include demand forecasting, cold chain management, regulatory compliance, and risk mitigation. These ensure product quality and safety while meeting market demands.
How can technology help to optimise pharmaceutical industry?
Technology optimises the pharmaceutical industry through advancements like blockchain for traceability, AI for forecasting, IoT for monitoring, and automation for precise inventory management, enhancing efficiency, quality, and safety.
Conclusion
Supply chain management in pharmaceutical industry is important for timely medication delivery. To stay competitive, companies need efficient strategies such as optimising inventory, forecasting demand, and embracing technology. Challenges like medicine shortages, evolving regulations, and rising competition must be addressed. Explore Qodenext‘s comprehensive solutions.
