Logistics & Supply Chain Issues in Pharmaceutical Company

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Logistics & Supply Chain Issues in Pharmaceutical Company

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Logistics & Supply Chain Issues in Pharmaceutical Company

  1. 1. Logistics & Supply Chain Issues in Pharmaceutical Company
  2. 2. The pharmaceutical Industry• The pharmaceutical market will reach nearly USD 1,100 billion by 2015• The research-based pharmaceutical industry currently spends over USD 100 billion (EUR 75 billion) on R&D• Indian pharmaceutical industry ranks 4th in the world in terms of production volume and 13th in domestic consumption value
  3. 3. Significance of logistics in pharmaceutical companies Need to study issues & challenges To meet customer service improvement & cost reduction It is highly crucial as it is time-sensitive Excellent supply chain management can yield: 25-50% reduction in total supply chain costs 25-60% reduction in inventory holding 25-80% increase in forecast accuracy 30-50% improvement in order-fulfilment cycle time 20% increase in after-tax free cash flows
  4. 4. Introduction
  5. 5. Issues & Challenges Managing Pharmaceuticals Managing perishable products Degradation of the medicines as they move along the supply chain which results in allowing substandard products to be dispensed to the patients Maintaining temperature control Typically more focus is given on R&D Manufacturers can’t have control once Pharmaceuticals are docked to wholesalers Shipping of expiry products
  6. 6. Issues & Challenges Crisis Management  In case of an epidemic break-out, global demand for certain medicines overshoots the demand suddenly.  Product withdrawal during sales due to side-effects and expiry
  7. 7. Issues & Challenges Little Incentive for Reducing Inventory Ethical requirement of providing medicines Out of stock situations are unacceptable & patent lifespan is low Exceptionally long cycle times and lots of inventory Counterfeit Drugs and Security High price of drugs worldwide Easy to fake prescription drug labeling
  8. 8. Issues & Challenges Outdated Manufacturing Sites Reluctant Govt. bodies to approve any changes fearing product quality Parallel Trade Cross trading across the borders Black market transactions in developing nations No track of drugs coming in & going out of the country
  9. 9. Issues & Challenges Complex Network Design Controlling wide supply chain with huge Stock Keeping Units becomes very difficult Reducing finished goods is difficult Training & education cost to the stakeholders is high Integration of domestic and international businesses. Eg : Nicholas Piramal India Limited Bringing a consensus in manufacturing, sales, marketing, and distribution department to agree on a forecast
  10. 10. Conclusion Logistics has emerged as an important element in the pharmaceutical industry as it becomes a greater percentage of total costs Unlike other sectors, value-chain perspective of managing process innovation through capacity and production planning is equally important Emerging technologies like RFID can mitigate many of these logistics issues

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