How the pharmaceutical industry is re-building supply chain resilience against economic uncertainty

The pharmaceutical industry has been deeply impacted by rising inflation, exhausting supply chains and losing large amounts of revenue. As a result, drug prices have skyrocketed, resources have been strained and accessibility to healthcare has ultimately decreased.

In a survey conducted by WBR, 74% of heads of supply chain surveyed said they see their supply chain as ‘resilient’ to current economic volatility. However, 20% view their supply chain as only ‘somewhat resilient’.

To combat economic uncertainty, companies are focused on improving supply chain resilience and finding innovative ways to mitigate the effects of inflation.

To find out more, download the LogiPharma Agenda here.

The growth of artificial intelligence

Over the next 12 months, heads of supply chain are looking to invest in new technologies to help rebuild their supply chain resilience. Automation and data analysis will be crucial for pharma organisations looking to manage their supply chains and detect potential logistical problems before they emerge.

Investing in predictive analytics can help companies anticipate customer needs and adjust supply chains accordingly. This can be especially useful in the pharmaceutical industry, where it is important to ensure drugs are available when and where they are needed. Currently, there is an increasing reliance on artificial intelligence (AI) in the pharma industry.

However, AI implementation is not something that can be achieved overnight and requires a large amount of investment. Brands need to identify the areas where AI can provide the most benefits, ensure data is in proper order to make the most of it and be prepared for early failures.

For this to run smoothly, heads of supply chain should remember to hire the right people to manage the implementation and ongoing management and bring in third-party suppliers where appropriate.

In light of these advancements, Novartis has revealed that they are internally evaluating the most efficient ways to automate their processes.

For example, they are looking at their current manual risk assessments. As a result, distributors and wholesalers are gradually being incorporated into an automated risk management process. This will ensure a standardised and auditable practice across the globe.

Diversification of suppliers

Building resilience requires pharmaceutical companies to employ a wide range of suppliers. Heads of supply chain should shift their focus toward investing in suppliers from different regions and countries to reduce the risk of supply disruption due to external factors. Additionally, companies can use a mix of long and short-term suppliers to reduce the number of supply shortages.

Pfizer is currently evaluating application programming interface (API) suppliers to ensure they are able to deliver quality products and services in real-time. This type of risk profile helps identify the strengths, weaknesses, opportunities and threats associated with each potential or existing API supplier.

By looking into an API supplier’s compliance track record, successful batch numbers, environmental stewardship, and financial metrics, Pfizer CentreOne can accurately assess the risk of working with each supplier. T

This ensures they are able to reliably deliver quality APIs to their clients without compromising on safety or efficacy standards. Similarly, with regards to suppliers and third parties, GSK have invested billions to grow a more diverse suppliers.

They are making it clear the importance of building strong relationships with third-party providers. Selecting suppliers that can ensure a continuous supply of quality materials and control transportation conditions building resilience against economic turbulence.

Final remarks

Inflation is having a significant impact on the pharmaceutical industry, driving up costs and reducing access to essential medicines.

However, by investing in technology and diversifying suppliers, companies can increase supply chain resilience and mitigate the effects of inflation by creating cost efficiencies.

Additionally, large organisations and research institutions are helping to provide guidance and support to ensure that essential medicines are available and accessible to those who need them.

To read more, download our industry-leading LogiPharma Benchmarking Report here.