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Stability of Pharmaceutical Industry Supply Chains Against the Backdrop of Deglobalization

Views: 24     Author: Unibest Industrial     Publish Time: 2024-02-23      Origin: Site

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In the tide of globalization, supply chains, as the important link connecting the economies of various countries, play an extremely important role. However, in recent years, the trend of deglobalization has gradually emerged, bringing unprecedented challenges to global supply chains. Especially in the pharmaceutical industry, the stability of the supply chain is directly related to the life safety of patients and public health. This article will explore how to use the SCOR model (Supply Chain Operations Reference model) to ensure the stability of pharmaceutical industry supply chains against the backdrop of deglobalization.

Challenges Facing Pharmaceutical Industry Supply Chains Against the Backdrop of Deglobalization

Against the backdrop of deglobalization, pharmaceutical industry supply chains face multiple challenges. First of all, the rise of trade protectionism has led to an increase in international trade barriers, obstructing the cross-border circulation of medicines and raw materials. Secondly, geopolitical risks have intensified. Conflicts and tensions in some regions may have unpredictable impacts on supply chains. In addition, the frequent outbreaks of global pandemics have also brought tremendous shocks to pharmaceutical industry supply chains.


Application of the SCOR Model in the Pharmaceutical Industry

As an important tool for supply chain management, the SCOR model can help the pharmaceutical industry achieve stability in a complex supply chain environment. The SCOR model includes six core processes: Plan, Source, Make, Deliver, Return, and Enable, which are important in the pharmaceutical industry.



SCOR Process

SCOR's 6 management processes. src:https://www.apics.org/docs/default-source/scor-training/scor-v12-0-framework-introduction.pdf


Plan

The importance of planning in the pharmaceutical industry goes without saying. Facing a complex and changing supply chain environment, pharmaceutical companies need to formulate detailed supply chain plans, including production, procurement, logistics and other links. Through accurate demand forecasting and supply chain planning, companies can better cope with market changes and ensure stable supply of medicines.

In particular, in the pharmaceutical industry supply chain, upstream petroleum energy, as an important cornerstone of pharmaceutical chemical industry, has received unprecedented attention against the backdrop of deglobalization in recent years. Since 2018, the trend of globalization has begun to undergo subtle changes. The United States has implemented trade tariffs and other measures to drive the return of manufacturing. And the sudden COVID-19 pandemic in 2020 not only caused physical isolation on a global scale, but also caused serious asynchrony between global manufacturing and demand, which undoubtedly injected new momentum into the trend of deglobalization.

We must realize that petrochemical products play a vital role in modern pharmaceutical manufacturing. Not only can they synthesize the chemical molecules required for drugs, they are also key raw materials for manufacturing many drugs such as analgesics, antihistamines, antibiotics, and antiseptics. In addition, from rectal suppositories, cough syrups to various ointments, creams and gels, petrochemical products are ubiquitous. More critically, whether it's tablets, injections or capsule preparations, they all rely on plastics or glass derived from petroleum or crude oil as carriers and packaging materials for drugs.

Under current circumstances, OPEC+ still adheres to production cut policy, which continues to tighten oil supply. For downstream pharmaceutical chemicals, this has undoubtedly had a profound impact on their supply and pricing. Therefore, at the Plan stage of the supply chain, we need to pay more attention to the stable supply of upstream petroleum energy to ensure the continuous production and quality stability of pharmaceutical products.

Source

In the pharmaceutical industry, the procurement link is directly related to the quality and supply stability of medicines. Companies need to establish strict supplier audit mechanisms to ensure that the purchased raw materials and medicines meet quality standards. At the same time, by establishing long-term stable cooperative relationships with suppliers, procurement risks can be reduced and supply chain stability can be ensured.

When this procurement link is implemented in the procurement departments of enterprises, one of the Key Performace Indicators is "reduce procurement costs to obtain more/better products or services". Although the procurement department can achieve this kep performance indicator through strategies such as signing annual supply agreements and bidding, these strategy approaches have certain side effects:

  • Excessive procurement occupies company cash flow

  • Long-term agreements reduce supply chain flexibility

  • ...

Therefore, comprehensively considering transportation and inventory costs, risk management, quality and ESG considerations, quantifying various evaluation indicators, and implementing strategic procurement, is something procurement departments and companies can consider.

Make

In the pharmaceutical manufacturing process, companies need to follow strict production specifications and quality control standards. By introducing advanced production technologies and equipment to improve production efficiency and product quality, stable supply of medicines can be ensured. In addition, companies also need to establish sound production scheduling and inventory management mechanisms to cope with fluctuations in market demand.

Unlike traditional manufacturing, pharmaceutical chemical production has its unique characteristics. Among them, high-risk chemicals and high-risk chemical reactions are an aspect that the pharmaceutical industry's supply chain assurance needs to additionally consider. In addition to production suspension and supply chain disruptions caused by fires and explosions, environmental regulatory pressures brought about by hazardous reactions and high-pollution regulatory policy risks also pose supply chain disruption risks. Therefore, in addition to introducing advanced production technologies and equipment to improve production efficiency and product quality, using green chemical manufacturing methods such as flow chemistry and mechanochemistry to achieve sustainable production is something not only pharmaceutical chemical manufacturers need to consider, but also something purchasers need to pay attention to.

Deliver

Especially in the finished preparations downstream, the delivery link is directly related to the life safety of patients. Enterprises need to establish a sound logistics system to ensure the safety and timeliness of medicines during transportation. Pharmaceutical distribution companies can improve logistics efficiency and service quality through cooperation with professional third-party logistics companies, thereby ensuring timely delivery of medicines.

With the development of biotechnology, novel drug formulations and dosage forms are emerging one after another. Ensuring products are delivered is fundamental. Due to the nature of such product**, these innovative products often require a higher standard of storage and transportation**: for example, biologics usually require cold chain transportation, CAR-T cell therapy, RDC radiopharmaceuticals, etc., require a responsive logistics system even more.

Return

In the pharmaceutical industry, the return process is equally important. Enterprises need to establish a sound return handling mechanism to conduct strict quality inspection and handling of returned chemical engineering products or medicines. At the same time, by closely communicating with suppliers and customers, the return rate can be reduced and supply chain costs lowered.

For pharmaceutical distribution companies and manufacturing companies, digital capabilities are an important guarantee for achieving returns, a non-standard operation.

Enable

The enable process covers various aspects of supply chain management. Enterprises need to establish a sound supply chain management system, including supply chain management processes, information systems, talent development, etc. By continuously optimizing the supply chain management system, the resilience and adaptability of the supply chain can be improved to better cope with various challenges and risks.


Ensuring Stability of Pharmaceutical Industry Supply Chains

Against the backdrop of deglobalization, the SCOR model plays an important role in ensuring the stability of pharmaceutical industry supply chains. First of all, through accurate planning and scheduling, companies can better cope with market changes and supply chain risks to ensure stable supply of medicines. Secondly, by establishing strict procurement and manufacturing processes, companies can ensure the quality and safety of medicines. Thirdly, by establishing sound delivery and return mechanisms, companies can improve logistics efficiency and service quality to ensure timely delivery and return handling of medicines. Finally, by continuously optimizing the supply chain management system, companies can improve the resilience and adaptability of the supply chain to better cope with various challenges and risks.


Conclusion and Outlook

Against the backdrop of deglobalization, the stability of pharmaceutical industry supply chains faces unprecedented challenges. By applying the SCOR model, companies can manage supply chains more systematically to ensure stable supply and quality safety of medicines. In the future, with continuous technological advances and innovations in supply chain management, we believe that pharmaceutical industry supply chains will become more stable, efficient and safe.


At Unibest, we implement green chemistry to achieve sustainable pharmaceutical production, manufacturing and distribution supply chains, operate international trade of high-value pharmaceutical intermediates and active pharmaceutical ingredients, and aim to become a one-stop solution provider for the global pharmaceutical industry.


We sincerely invite partners, industry experts and professionals to jointly discuss and practice ways to ensure sustainable pharmaceutical supply chains. We believe that through everyone's joint efforts and wisdom, we will surely be able to promote the green transformation of the pharmaceutical industry and make greater contributions to human health and sustainable development of the Earth.