logistics & supply chain issues in pharmaceutical company
DESCRIPTION
Logistics & Supply Chain Issues in Pharmaceutical CompanyTRANSCRIPT
Logistics & Supply Chain Issues in Pharmaceutical Company
The pharmaceutical Industry
• The pharmaceutical market will reach nearly USD 1,100 billion by 2015
• The research-based pharmaceutical industry currently spends over USD 100 billion (EUR 75 billion) on R&D
• Indian pharmaceutical industry ranks 4th in the world in terms of production volume and 13th in domestic consumption value
Significance of logistics in pharmaceutical companies
Need to study issues & challenges To meet customer service improvement & cost reduction It is highly crucial as it is time-sensitive Excellent supply chain management can yield: 25-50% reduction in total supply chain costs 25-60% reduction in inventory holding 25-80% increase in forecast accuracy 30-50% improvement in order-fulfilment cycle time 20% increase in after-tax free cash flows
Introduction
Issues & Challenges
Managing Pharmaceuticals Managing perishable products Degradation of the medicines as they move along the supply
chain which results in allowing substandard products to be dispensed to the patients
Maintaining temperature control Typically more focus is given on R&D Manufacturers can’t have control once Pharmaceuticals are
docked to wholesalers Shipping of expiry products
Issues & Challenges
Crisis Management In case of an epidemic break-out, global demand for certain
medicines overshoots the demand suddenly. Product withdrawal during sales due to side-effects and expiry
Issues & Challenges
Little Incentive for Reducing Inventory Ethical requirement of providing medicines Out of stock situations are unacceptable & patent lifespan is
low Exceptionally long cycle times and lots of inventory
Counterfeit Drugs and Security High price of drugs worldwide Easy to fake prescription drug labeling
Issues & Challenges
Outdated Manufacturing Sites Reluctant Govt. bodies to approve any changes fearing
product quality
Parallel Trade Cross trading across the borders Black market transactions in developing nations No track of drugs coming in & going out of the country
Issues & Challenges
Complex Network Design Controlling wide supply chain with huge Stock Keeping Units
becomes very difficult Reducing finished goods is difficult Training & education cost to the stakeholders is high Integration of domestic and international businesses. Eg :
Nicholas Piramal India Limited Bringing a consensus in manufacturing, sales, marketing, and
distribution department to agree on a forecast
Conclusion
Logistics has emerged as an important element in the pharmaceutical industry as it becomes a greater percentage of total costs
Unlike other sectors, value-chain perspective of managing process innovation through capacity and production planning is equally important
Emerging technologies like RFID can mitigate many of these logistics issues