In 2020, the Coronavirus disease (COVID-19) ravaged the world and brought pharma’s supply chain into the forefront yet again, likely to remain there forever.
Pharma supply chain globalizes
One major trend that existed before the pandemic was the globalization of raw materials. Susan Beardslee, freight transportation and logistics principal analyst at ABI Research explains that much of the pharma supply chain relied on raw materials from China. Even before Coronavirus (COVID-19) this caused room for a wide range of supply risks.
Along with globalization grew a focus on just-in-time (JIT) inventory to drive down costs. The JIT inventory strategy focuses on pairing raw material sourcing directly with production schedules, eliminating excess source product. Jennifer Biscelgie, CEO and founder of Interos, explains that while this approach was successful in driving down costs, it is prone to failure if there is any type of disruption. Additional, global trade offer significant instability as well. COVID-19 also heightened focus on pricing policing.
Technology trends skyrocket
Like other industries in the supply chain, the trends in the pharma supply chain push technology innovation and adoption. When it comes to pharmaceuticals, tracking reigns supreme like much of the supply chain, and the COVID-19 crisis only makes it more prominent.
“Our industry has many tools for tracking and monitoring freight, from the standard onboard computers reporting the location, direction of travel and hours of service status of the truck and driver to more complex temperature monitoring systems that have risen to prominence during this crisis,” Orban says. “It is no longer a load of apples or ice cream that has to be carefully temperature-controlled; now an incredibly important shipment of vaccine could be endangered if the cooling systems in the trailer fail or the temperature rises without appropriate intervention.
COVID-19 changes pharma forever
“The pandemic has also proven the need for greater collaboration among all stakeholders within the supply chain,” says Herjolfsson. “Manufacturers, 3PLs, carriers, distribution centers, healthcare facilities and governments have all aligned on one shared goal -- to safely manufacture, distribute and provide vaccines to the world. Technology plays a massive role in connecting these disparate entities through sharing data. Doing so helps strengthen supply chain responsiveness and resilience while leading to better patient outcomes.