Supply chain resilience in pharma: Delivering consistency amidst global events
In an interconnected economy, industries operating on an international scale are increasingly vulnerable to supply chain disruption. Global events can have a profound impact on all industries, with the pharmaceutical industry particularly at risk due to an extensive and international supply chain. From chemicals to API manufacturing, formulation, packaging, and drug delivery to the patient, there is potential for disruption at any stage along the supply chain, such as personnel, material, service, and equipment shortages.
In recent years, several geopolitical, economic, and environmental global events have placed significant strain on the supply chain. From the blockage of the Suez Canal, to the conflict in Ukraine, and the trade war between China and the US, the pharmaceutical industry has been severely impacted.
The COVID-19 pandemic, in particular, reinforced how such events can bring the pharmaceutical supply chain under strain, with need for a robust and flexible supply chain to contingency plan against an unpredictable geopolitical climate. During the pandemic, the pharmaceutical industry faced disruptions at manufacturing sites caused by various events, such as explosions, unplanned revisions, and natural disasters. These incidents were additional strains during an already challenging time, which were exacerbated by political instability and military manoeuvres in Southeast Asia, further destabilising the supply chain.
API manufacturers in the supply chain
The pharmaceutical supply chain is extensive, involving many players, with ample opportunity for stumbling blocks along the supply chain.
Active Pharmaceutical Ingredients (APIs) – the primary components that give drugs their therapeutic effect– play a vital part in the pharmaceutical supply chain. Any impact to the production and supply of APIs can have severe ramifications for the availability of essential medications to those in need.
The demand for chemically synthesised peptides has surged recently; this is largely due to the expansion of peptide applications from niche to mainstream diseases, clinical trials favouring chemical synthesis, and the emergence of more convenient administration methods, such as nasal or oral formulations, beyond injections.
This increased demand necessitates a larger supply of materials, a trend that has been on the rise in recent years. Presently, there are more than 80 approved peptides and 18 approved oligonucleotides, made possible due to a tried and tested robust supply chain.
From materials to medication
At API manufacturing companies such as Bachem, the supply chain begins at the API level, where upstream chemicals are sourced internationally. These are needed for the chemical synthesis to manufacture peptide and oligonucleotide APIs.
Next, the product is distributed to the customers or direct to a formulation site, where ingredients from across the globe are combined to produce the final medication (or finished dose product). The product is then packaged, using globally-sourced materials such as aluminium and plastics; this process takes place as near as possible to the market or is consolidated, depending on the organisation’s structure.
Maintaining consistency amidst uncertainty
To plan against threats present in the global pharmaceutical supply chain, pharmaceutical companies have implemented various strategies to ensure a robust supply chain, ultimately making sure that medications reach the users that need them. Key steps to ensuring supply continues include:
- Maintaining strategic stock levels
- Validating transportation routes
- Dealing with secondary and tertiary suppliers for key starting materials.
Crucially, an effective supply chain requires resilience. Resilience across every facet of the pharmaceutical supply chain is paramount, whether ecological, societal, organisational, or psychological. This requires adaptability in pressured situations, despite ambiguity or adversity, in order to turn weaknesses in a company’s supply chain into a strength.
Resilience can be underpinned by four pillars:
1. Visibility
Understanding your position, anticipating future events, and strategising accordingly is crucial. Full visibility encompasses not just your processes, people, and technology, but also extends to your suppliers and their suppliers, as well as the origin of materials from service providers. This comprehensive visibility is vital for operational efficiency.
Bachem have implemented three main elements to ensure visibility is maintained:
- Risk management
- Allows identification and management of risks through an annual deep-dive risk analysis from demand, supply, and manufacturing perspectives
- Business continuity management
- Prepares teams mentally and logistically for 'what if' scenarios, including safety stock levels, transportation routes validation, and dealing with secondary and tertiary suppliers for key starting materials
- Stringent emergency management system
- To respond effectively to incidents
2. Flexibility
Flexibility is crucial for swift and effective responses to disruption. Not being limited to organisational agility, flexibility also includes the adaptability and intuition of employees. Personnel must be versatile in adopting new methods, recognising issues, and integrating problem-solving skills into their daily routines.
Flexibility in thought processes and technology is equally important to maintain resilience in a dynamic environment, which must be initiated from a top down perspective. Flexibility can often be achieved through a lean management philosophy, which can be implemented across the organisation.
3. Collaboration
Collaboration is paramount, providing a framework for an organisational structure, while extending beyond internal operations to encompass external partnerships. However, it must begin within the company, fostering a shared language and understanding to facilitate cooperation.
Leadership plays a pivotal role in establishing a structure that promotes a cooperative approach. This common understanding of language, work content, and market objectives is the cornerstone of global alignment, enabling people and organisations to evolve together.
4. Control
Maintaining oversight of processes and personnel is essential for predicting and managing potential outcomes. These components collectively enhance the ability to manage risks and capitalise on disruptive elements. With agility, a disruptive factor can be transformed into an opportunity. Many companies put processes and KPIs in place to measure their status and early indicators, in order to provide alerts when a system is becoming unstable. Global ERP systems can facilitate this control across internal and international networks.
Effective control procedures will also involve weekly and monthly measurements to maintain accurate data, helping to continuously improve performance and maintain timely visibility and control over the supply chain, allowing to take appropriate measures.
Delivering on commitments to customer and patient
In summary, it's essential to underscore the importance of supply chain resilience in today's interconnected world. Understanding your business and its risks, fostering transparency and integrating supply chain risk management into your governance and leadership tools are all critical components of this resilience.
Global events can pose significant challenges to the supply of APIs, and thus the continuity of drug supply. Any disruption can have significant downstream effects, and it is the duty of pharmaceutical companies to ensure their supply chains are robust enough to ensure supply continues in the face of disruption.
Manufacturers must implement robust strategies to minimise these risks and secure the continuous production and supply of APIs. This necessitates a specialist understanding of the nuance of the global pharmaceutical supply chain and the ability to adapt to an unstable global landscape. By doing so, manufacturers can fulfil their commitment to ensuring drug supply and making sure patients’ medications are continually accessible.
