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SUPPLY CHAIN SPOTLIGHT: PHARMACEUTICAL INDUSTRY
An overview of the issues, trends and challenges for supply chain managers
Supply chain management practices are increasingly assuming centre stage in the pharmaceutical manufacturing sector as companies seek to adopt more sophisticated approaches to get their products to the end customer at the right time, in a secure fashion and at a competitive but also profitable price.
More than 86% of North American pharmaceutical manufacturers have initiated lean practices, mainly over the past tew years, according to research published by Aberdeen Group in 2006.
"Lean is now a key tool to provide supply chain agility, reduce total costs and provide value-added customized products for customers," concluded an Industry Canada report on supply chain issues in the pharmaceutical industry. The report, conducted in partnership with Supply Chain & Logistics Canada, added that the top three factors driving pharmaceutical companies to implement a lean strategy are pressure to improve operational performance; inventory reduction; and shorter order cycle times.
When it comes to supply chain, however, pharmaceutical companies have unique concerns and ways of measuring performance. For example, while the majority of manufacturers identify on-time delivery as a main key performance indicator, the pharmaceutical industry identifies cost per unit as its top KPl (followed by inventory turns and manufacturing cycle time.)
The heavy regulation the industry faces (in Canada, for example, pharmaceutical supply chain partners must provide a daily inventory' through Drug Identification Number codes to multiple government) means that traceability issues are top of mind. In tact, more than 65% of firms are concerned about regulatory traceability mandate issues, according to the finding of another Aberdeen Group study. The same study also found that North American firms that are proactive in implementing technology to respond to compliance initiatives have improved their time to complete product traceability by 49% and reduced by 31% their cost of counterfeiting/gray market initiatives.
Supply chain-based solutions to pharmaceutical counterfeiting
The ability to track and trace...