Pfizer, AstraZeneca, Novartis, Merck proof it these days once again: the pharmaceutical business is one of the most globalized industries in which new successful medicines are priority number one. But creating responsive supply chain models has become a priority as well. Why?
“As the pharma supply chains are global the dilemma is choosing for centralization and consolidation or a set-up where proximity to the market is the main driver. It is all about the balance between costs, service levels and risk mitigation", say Johan Beukema, partner Buck Consultants International and Eelco Dijkstra, senior consultant Buck Consultants International.
Take for example the Asia-Pacific region. Pharma companies work mainly with national distribution centers with the products being replenished from global plants. At the LogiPharma event in Singapore, Eelco Dijkstra presented recently the results of a Buck Consultants International survey which shows that 80 percent of pharma companies are reviewing their supply chains is the APAC region. Benefits of regionalisation are increased availability of products, reduced time to market and reduced supply chain costs. “On average our clients save 10-18% of their supply chain cost through a regional network redesign. But most importantly is that a regional model for the APAC-region guarantees a scalable platform for growth”, according to Dijkstra. “A strategy of postponed packaging and labeling increases the financial attractivity of regionalization even more”.
The pharma supply chains in 2020 ask for a high level of integration of product management, commercial needs and operations. That was the main conclusion of Buck Consultants International yearly Swiss Supply Chain Dinner in Basel, organized in co-operation with real estate development company Gazeley. Twenty-five high level executives attended this exclusive event, listening to the views of a.o. Roche Pharmaceuticals’ Head of Global Supply Chain Capabilities, Richard Groenenboom. He says: “Responsive supply chain is not only about rethinking location and size of distribution centers. Focus should be given to effective ways to manage a more complex global supply chain from an end to end perspective”. An important topic in the discussion was also supply chain segmentation. “Away from one size fits all pharma companies transform, towards a segmented supply chain with specific solutions per product and/or market channel, aiming to tailor the service offering to the exact needs of the market, and to prevent over or underservicing of specific market segments. Segmentation will lead in the end to a higher supply chain performance in combination with lower costs”, says Johan Beukema.
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