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Pharmaceutical Supply Chain Pains and Gains


Pharmaceutical Supply Chain Pains and Gains

According to the 2015 CMR Pharmaceutical R&D Factbook, 2014 global pharmaceutical sales surpassed $1 trillion and are expected to increase to $1.3 trillion by 2018. The US pharmaceutical market is among the largest such markets estimated at $395.2 billion in 2014 by research firm, Global Data. The company forecasts the US market to grow at a CAGR of 5.6% through 2020 to $548.4 billion.

Highly regulated and one that spans across the world, managing the pharmaceutical supply chain is not easy. However, in its recent survey, ‘Pain in the Supply Chain’, UPS noted that there have been important gains in managing regulatory compliance, product security and using logistics and distribution partnerships as a strategy to address challenges.

With that being said though, challenges remain and the biggest one is managing costs.

According to UPS, costs such as fluctuations in fuel and raw material costs, complying with increasing regulations and new market expansions, are among the many costs that pharmaceutical manufacturers face. All of these ultimately drive up supply chain costs and as a result, the need to manage warehousing, transportation and logistics costs is crucial.

How Are Logistics Providers Addressing Costs?

One way logistics providers are addressing these costs is by way of new solutions. For example, the former TNT Express, acquired by FedEx, recently introduced a new cold chain packaging and shipping solution, Medpak VI. The solution is a reusable temperature-controlled packaging network service to help healthcare manufacturers reduce costs and waste when shipping temperature-sensitive pharmaceutical and biological materials. The service combines packaging and TNT’s air and road network. In addition, the service provides tracking and monitoring solutions to ensure compliant cold chain management. TNT provides the boxes on a one-way rental basis, transports the temperature-sensitive materials and takes the empty boxes back after delivery to the receiver.

Embracing Technology Solutions

Logistics providers as well as pharmaceutical manufacturers are also embracing technology solutions to gain better visibility across the supply chain. By doing this, pharmaceutical manufacturers and their supply chain partners can work together to identify unnecessary costs and develop solutions to mitigate such costs. Visibility brings better control and management of inventory, thus the ability to achieve optimal inventory levels. There is also a need to optimize transportation costs and there are a variety or ways to do so, via a Transportation Management System (TMS) or the use of an online freight marketplace. Either way, it is always in the shippers best interest to collaborate with supply chain partners to determine the best approach.

Note: UPS’ annual ‘Pains in the Supply Chain’ is available to read for free here: