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Over the past few years pharmaceutical companies have begun to look more and more at other industries to help shape their own business growth – from learning how to manage their social media pages from the fashion industry to mitigating and reducing risks within clinical trials by learning lessons from the airline industry, according to Clara Heering, VP, clinical risk management, ICON plc. 

As supply chain within the pharmaceutical industry becomes increasingly more important as a means of addressing quality changes, E2open – a company providing a supply chain operating network of more than 41,000 companies – has recommended five lessons these companies could learn from other industries to improve their supply chain in 2017, as written about in their white paper. Read the full paper here , a snippet of which is below:


Leading pharmaceutical companies are following the successes of other industries like high-tech and consumer goods. In essence, there are five recommended courses of actions for pharma companies:

  1. Connect and collaborate using a business network. This is the foundation to run a multi-enterprise supply chain. The modern approach is to leverage the cloud to connect electronically to all outside supply chain partners. With the software-as-a-service (SaaS) model, there is no need to force suppliers or CMOs to install, run, and maintain specific software applications. A cloud network provides a wide range of connectivity options, depending on the partner’s technological maturity.
    Furthermore, to support this emerging outsourcing model that requires multiple actors to work in sync, these should not be point-to-point connections but a true, multi-tier network – connecting everyone, like the Internet does. Beyond the connectivity and end-to-end visibility that is enabled, collaboration capabilities are needed to support the business interactions between the different actors, routing the information in both directions as required by the business – like an ERP system but for the entire supply chain. Without such a platform, it is almost impossible to enable the level of real-time visibility and coordination among all supply chain partners that is needed.
  2. Understand the true demand. Demand forecasts are only an educated guess of what the future demand will be. In reality, the OTC business is in many aspects no different from other consumer products businesses. So, the most innovative pharma companies are now doing what leading consumer products companies are doing: they are capturing vast amounts of demand-related information which is then fed into sophisticated demand sensing solutions to better predict true demand.
    This means going all the way to point-of-sale (POS) data or even using signals like weather forecasts or trends via social media– whatever data is relevant to the business. This improved demand picture then needs to be propagated to all supply chain actors, ensuring that the pharma company, suppliers, and CMOs are truly aligned. Consumer goods companies have realized higher on-shelf availability and lower inventories with such an approach.
  3. Control the quality at the CMOs. In the pharma industry which is heavily regulated and where quality is critical, companies need to ensure end-to-end traceability. When external parties such as CMOs are involved, this means pharma companies need to have visibility into their partners’ manufacturing operations. It is indeed critical to track product quality across the multi-tier, multi-enterprise supply chain.
    For this, companies connect to their CMO’s manufacturing execution systems (MES) to capture relevant manufacturing data at all stages of production. This provides the pharma company very granular factory transaction visibility to track material flows, lot genealogy, processing steps, and any associated parameters such as yields or test results – critical information to ensure traceability. This a key requirement for any serialization initiative.
  4. Quickly re-plan across the network. A key requirement for pharma companies today is to quickly detect and respond to changes in the demand and supply picture. This requires visibility of the end-to-end supply chain, not only of the in-house operations.
    However, even if companies are able to integrate all the up-to-date supply chain data in a complete end-to-end plan, traditional planning systems lack the fast problem resolution and decision support capabilities required to manage tradeoffs and iterate through multiple alternative what-if scenarios.
    Leading pharma companies are using state-of-the-art planning applications that give them rapid decision support with what-if scenario capabilities. These tools allow planners to rapidly evaluate the impact of new information – be it a supply disruption or an unexpected order – and easily compare alternative plans to select the best option to be shared with all supply chain partners impacted.
  5. Better manage the distribution. Finally, on the distribution side, pharma companies are also increasingly relying on a range of external partners for transportation, warehousing, and other value-added services. Given how critical it is to ensure the right supply of the right product at the right location, pharma companies are taking the lessons from consumer product companies and are tightly managing their distribution partners.
    In particular, this includes complete downstream inventory visibility and the support of different replenishment models. Leading pharma companies are also proactively managing the allocations to the different channels, as real time as required. This is particularly important in the OTC segment, where pharma companies need to optimally and profitably allocate the right products to the right channels and make reliable commitments when competing for shelf space at drugstore chains and pharmacies.

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