For your pharmaceutical company, reducing operating costs and improving service are possible with a large-scale supply chain transformation. While this kind of extensive reworking of your supply chain may seem intimidating and unnecessary, it can help make your company’s costs smaller, its reach greater, and its manufacturing needs more streamlined which will, in turn, positively affect your company as a whole.
Why Consider a Large-Scale Supply Chain Transformation?
Pharmaceutical companies should consider this type of change because there have been disruptions in the industry due to developments such as the competition of generic drugs, competitive bidding from hospitals and other purchasers who buy large amounts of drugs, and new pricing and changes set down by policymakers and governments. Despite these disruptions, pharmaceutical companies are still growing exponentially, but they can take better advantage of the growth by revamping largely unchanged supply chain models. For years, the supply chain was a means to an end for pharmaceutical companies and, while your company may have decided not to change manufacturing and design policies that have been in place for years, there is now a reason to consider the possible cost reduction as well as the chance to provide better service.
New Methods to Implement into the Supply Chain Model
There are many methods you can implement into your supply chain model in order to make it more cost efficient, responsive, and flexible. A large-scale transformation could be beneficial and thinking big could be the change you need to see real growth in your supply chain’s effectiveness and your company as a whole.
- Product design and packaging is one element that can be revamped in order to produce a streamlined and cost effective supply chain. Many companies have different versions of packaging for the same pill, but having one version could cut out a large amount of unnecessary cost.
- According to Ryder, transportation and distribution are two parts of the supply chain process that can be largely transformed in order to meet more clients’ needs. “To get products to their destinations when and where they’re needed, consider an integrated transportation solution that combines common carriers and a dedicated fleet to keep up with fluctuations in volume without missing a beat.”
- Reducing the number of your warehouses can allow you to save on costs while helping to streamline your supply and transportation process, especially if you have more space than you need.
- Consider your assets including machinery and equipment and how these can be used more efficiently or more cost effectively in order to get the most out of what you already have.
- Minimizing risk is always important and, as stated by Accenture, “increasing awareness of (and responsiveness to) disruptions” could allow you to make contemporary and even overdue changes to your supply chain model. These disruptions can include:
- Labor unrest
- Currency changes
- Glitches in quality
- Shifts in international markets
- Port delays
- Consider the possibilities of outsourcing and how this type of supply chain model might be more efficient, especially for certain medications that are not in high demand.
- Hire planners as part of the supply chain process to anticipate the effect of generics on your product and the effectiveness of the pill itself.
- Streamline the production process as much as possible and evaluate waste. Look for places, even in the production of the product itself, where unnecessary waste or cost is created and consider possibilities to eradicate them.
There is a reason to consider a comprehensive overhaul of your supply chain, especially now. If your company is thought of as responsive and engaged, customers will respond well and the reduced cost at the supply chain level will absolutely help you in the long-term management of your company.