Doing Life Science & Supply Chains the Right Way

by Ankit Kumar
4 weeks ago
164 Views

The pharmaceutical companies are facing the difficulty to maintain its inventory. But before any suggestions of investing upon the SCH software, let us first drill-down the pain points of the supply chain and analyze how to overcome them.

Every company’s supply chain is unique, with its own set of challenges and solutions. But when it comes to life sciences supply chains, things just seem to be a lot more complicated. Regulations, expiration and generic and brand name labels add a certain complexity to the mix not always seen in other industries. Some branded companies have high margin products while the others have a lower margin products with large volume of new products introductions. In this kind competitive landscapes, merging and acquisition or very common which results in incomparable ERP (Enterprise Resource Planning) Systems.

A well-designed supply chain is expected to perform with the following strategic objectives:

  1. To maximize overall value generated
  2. To look for sources of revenue and cost
  3. To replenish material and product when required
  4. To improve cost quality
  5. To shorten time between order and delivery
  6. To meet customer demand for guaranteed delivery of high quality and low cost with minimal lead time
  7. To optimize at pre and post-production levels
  8. To reduce transportation costs
  9. To provide flexible planning and control mechanism
  10. To reducing working capital
  11. To be able to take off the balance sheet
  12. To accelerate cash-to-cash cycles
  13. To increase inventory turns
  14. To solve supplier’s problems
  15. To improve customer service performance
  16. To reduce pre & post-production inventory
  17. To minimizing variance by means of activities like standardization, variety reduction, etc.
  18. To minimize total cost of operation & procurement
  19. To ensure and implement product quantity control
  20. To achieve maximum efficiency in using labor, capital & plant utilization
  21. To design and implement flexible planning and control procedures
  22. To achieve synchronization

However, We also need to consider some potential risks or changes that could be faced by the SCM.

  1. Customer Services: Customers are the critical attributes in a supply chain. An effective delivery of the right product in the right quantity, quality, condition, document and place at the right time & right price, and also rectifying any problems arising in order to maintain the smooth functioning in the organization.
  2. Planning & Risk Management: The supply chains must be planned and evaluated according to the changing business environment. These changes should be re-designed and incorporated with identification and quantification.
  3. Cost Control: The change in the operating costs such as constant rise in freight prices, upgrades in technology, rise in labor rates, increase in healthcare costs, and rise in commodity prices must be overcome by taking the correct decisions to achieve the objectives of the organization.
  4. Supplier Relationship Management:A flexible modeling is required to handle different departments operating with different methods of implementing and measuring the performance and its results. To avoid the mismatch, a set of analysis and classification is required to make assessments easy for the participants and on a common grounds and parameters to communicate, benchmark efforts and enhances the evolution of best practices.
  5. Talents: To understand the key challenges faced by the supply chain, it requires a job qualification and methods for developing talents and leaders who can source this specialized skill set.

The above notified challenges can be resolved if we try to incorporate the below mentioned solutions that the SCM in life science companies will be benefited with.

  1. Implementation of Robust sales and operations planning tool: Implementing an S&OP (sales and operation planning) Tools will provide an easy balancing of supply and demand at multiple level of aggression. The functionality requires multiple time dimensions with real-time analysis that gives an ability for the robust scenario simulation to evaluate options.
  2. Tenders, Trade and New Product Introductions (NPIs): The ERP should have a way to maintain the critical data, priority-assignments and the ability to model the probability of demand for tenders and trade promotions. Modeling the NPIs with their pseudo demand and bill structures will provide and ability to project the fulfillment, revenue, capacity and material availability.
  3. Satisfy the demand & supply by meeting a specific characteristic: The Solution should enable special demand and supply allotments based on unique parameters like Expiry dates, stop-sell dates and batch numbers to make sure that the factors are calculated when calculating the available demand, automatically providing the projected access.
  4. Expiry & Transition Dates associated to SKUs (Stock Keeping Units): there should be a solution to determine the material productions to account for a change and calculating the projected expiry at multiple levels when planning.
  5. Campaign Planning: The software solutions should be capable for assuring the connected production of the material when executing through batches to reduce the number of setups to make the production line are more effective.
  6. Performance Indicator: Thorough evaluation of supply & demand simulation scenarios to ensure the comparison of the results against the key performance indicators so that it can measure the typicality of the trade-offs.

Connecting an end-to-end supply chain within a single system with help the company to make the issues less severe. The company will be able to plan packaging work orders split from different bulk locations based on quota arrangements and create work orders from bulk locations based on products’ batch sizes. That way you’ll always have clear visibility into your supply chain operations.

11 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *