Pharma Supply Chains Call for Better Visibility

The pandemic has managed to single-handedly undermine many critical aspects of pharmaceutical product development. Many of the manufacturing companies that had to shut down production have been slow to get back up to speed due to being understaffed from quarantined employees. In vicious-cycle fashion, supplies of raw materials needed to manufacture treatments for COVID-19 have been depleted with very few or no supplies available to restock the shelves.¹

Lately, it seems the only other term uttered as often as COVID-19 is supply chain. In addition to the pandemic-induced supply chain woes, global supply chains are largely becoming more complex, difficult to manage, and vulnerable to uncertainties and risks. For instance, companies in the pharmaceutical sector have been contending with challenges such as:

• Material shortages.
• Longer lead times due to shipping delays.
• Fluctuating demand trends.
• High costs of misaligning staff resources, inventory, and production schedules.
• Difficulties complying with good manufacturing practice (GMP) guidelines.

Pharma Shortages: Not Just a Pandemic Problem

Product shortages — particularly pharmaceuticals — have imposed the heaviest toll on society. The American Medical Association is asserting that “the drug shortage is an urgent public health crisis that threatens patient care and safety.”²

According to a report by the U.S. Food and Drug Administration (FDA), “[even] before the emergence of COVID-19, drug shortages were already on the rise. The FDA reported an increase in the number of drug shortages from 2017 to 2018, a contrast to the declines observed since 2011. The shortages are lasting longer, too, and can be even more than eight years in some cases. Over 60% of shortages in 2019 were attributed to supply disruptions due to manufacturing and/or quality issues.”³

Unveiling the Manufacturing Root Cause

Clearly, few businesses are immune to supply chain concerns. Based on current pharmaceutical manufacturing trends, companies are dealing with more third-party vendors. In Deloitte’s annual survey on extended enterprise risk management, 84% of respondents cited having experienced an incident involving a third-party organization within the last three years. Nearly half of the organizations that responded to the survey believe the financial impact of failure by a third party or subcontractor has at least doubled over the past five years.⁴

What Can Pharma Companies Do?

The upside is supply chains are transforming from a linear sequence to a dynamic, interconnected approach. This shift from sequential supply chain operations to an interconnected, open system of supply operations is laying the foundation for the future. Technology solutions, such as a pharmaceutical manufacturing execution system (MES), that allow for end-to-end tracking and traceability enhance visibility across the entire supply chain, making it easier to develop workable management strategies.

Pharmaceutical development takes place in one of the most highly scrutinized and regulated industries. Therefore, companies are quickly discovering that improving supply chain performance is essential for maintaining an efficient operation and getting quality products on the market quickly.

Visibility is a critical aspect of supply chain management and continued regulatory compliance with GMP guidelines. It is the foundation for making quick, accurate decisions, mitigating risk, and delivering quality products. Supply chain visibility means having real-time access to data relating to every transaction and demand trigger, across every step and tier of the supply chain, and all the logistics movements in between.

Many companies in pharma manufacturing are employing advanced technology, such as artificial intelligence (AI), to gain more visibility across the supply chain. AI algorithms can improve end-to-end visibility, leading to more efficient demand forecasting, inventory management, logistics optimization, procurement, and workforce planning.

Companies that take an integrated approach to supply-chain optimization reduce redundant effort, waste, and product recalls. They can be more proactive in forecasting, planning, and capacity management — thereby improving service levels, mitigating risks, and strengthening the combined supply chain.

3 Recommendations for Improving Your Pharma Supply Chain Operations:

• Align quality across the supply chain: A digitized quality management system (QMS) with secure access portals can enhance supplier accountability, communications, and governance.
• Collect objective data on supplier performance in real time: Having access to supplier data in real time allows ample time to adjust schedules and resolve issues such as a supplier corrective action request (SCAR) or a component supply shortage.
• Dissolve silos: Siloed supplier management can impair your organization’s ability to apply the appropriate discipline and rigor to managing quality and risks.

1. “The Pandemic and the Supply Chain: Addressing Gaps in Pharmaceutical Production and Distribution,” Joshua Choe, Matthew Crane, et al, Johns Hopkins Bloomberg School of Public Health, Nov. 2020.
2. “Supply Chain Crunch Is Causing Drug Shortages for Cancer, COVID-19, and Other Diseases,” Jamie Reno, Healthline, Oct. 30, 2021.
3. “The COVID-19 Pandemic Magnifies Pharmaceutical Supply Chain Issues,” David Alvaro, Emilie Branch, Cynthia A. Challener, Pharma’s Almanac, Sep. 29, 2020.
4. “Be Responsible and Effective: Strike a Balance,” Deloitte Global Survey 2020.