Getting the foundations right in the supply chain

Andrew Bray, managing director at software solutions provider K3, explores how enterprise resource planning (ERP) can help pharma manufacturers maintain their supply chains. 

In the wake of the ongoing pandemic, 70% of pharmaceutical leaders have admitted their supply chain has been left open to risk. From implementing new processes and working with different suppliers, to maintaining production standards, there are a number of major challenges that come with the heightened level of activity in the creation of vaccines. To tackle these new considerations, manufacturers need to ensure their current technology, especially their Enterprise Resource Planning (ERP) software, is up to date to provide the best support. Failure to do so and remaining dependent on legacy ERP systems will leave the pharmaceutical supply chains ill-equipped to meet the increased numbers and quality demands – during the pandemic and beyond. 

Steering clear of a single point of failure 

When it comes to maximising the benefits of an up to date ERP system, manufacturers must ensure the right steps are taken from the very beginning. Specifically, with the relationship manufacturers have with their material suppliers. As evidenced by the British Generic Manufacturers Association (BGMA), a key hurdle pharmaceutical manufacturers need to overcome is being reliant on a single point of supply. The ability to remain agile in how, and by whom, materials are dispatched is critical to business success for manufactures. This is especially true as new challenges arise such as increased demands caused by the pandemic and possible border issues from new Brexit regulations. In sourcing items from multiple suppliers and potentially various locations, pharmaceutical manufacturers can successfully minimise risk and disruption to the supply chain and ensure demand for orders are met.  

However, supplier flexibility cannot be achieved if legacy ERP systems are in place. In this instance, outdated technology simply won’t meet the requirements needed, particularly for the rigorous regulations required in the pharmaceutical industry. Older software not only has a decentralised structure which means problems may be easily missed, but it also has fewer safeguards against incorrect information being submitted. This is where implementing an updated ERP solution is crucial. With an up to date ERP, pharmaceutical manufacturers can have tailored supplier onboarding portals, allowing them to rapidly approve new, and multiple, suppliers. These new suppliers can then work on the same order while easily and clearly accessing all the required information from the manufacturer. As such, the business can avoid production delays, approve orders with minimal issues and quickly correct any issue that may arise. During the current times where speed is key, having this agility increases the bottom line, minimises unnecessary costs and ultimately enables businesses to successfully remain competitive. 

Avoiding mistakes by keeping track 

As well as having flexibility with suppliers, manufacturers must create resilience in the supply chain through traceability. It is of paramount importance for pharmaceutical manufacturers to evidence they are correctly following the necessary processes to meet regulatory and product standards. However, as Covid-19 and the roll out of vaccinations continues, pharmaceutical manufacturers are now faced with an increased level of scrutiny on top of the already large amount of regulation the industry is subject to. There is also the additional challenge of greater disruption and changes to suppliers, staff and, in some cases, location of production caused by the global pandemic. As a result, handling the rise in demand, coupled with maintaining industry standards can prove difficult and a consistent overview of the supply chain must be achieved at every stage. 

To illustrate this, consider product labelling. Although compliance in this area may seem less important, getting it wrong can be extremely costly. This was recently evidenced when 14.9% of pharmaceutical product recalls occurred due to labelling issues, between 2017 and 2019. The ability to swiftly identify mistakes in the supply chain, rectify it and adapt the future can hugely reduce a business's exposure to risk – saving both considerable sums of money and brand reputation. 

The problem that arises is that manufacturers operating on legacy ERP systems are unable to sufficiently monitor their supply chain with the high precision needed. As such, errors such as labelling mistakes can be easily missed causing time and money to be wasted. However, with an upgraded ERP system, businesses can easily track, identify and then react to any issues in real-time. These up to date systems can swiftly locate where the issue is occurring, understand the cause and highlight all the other products that are potentially affected. Quality assurance can then amend these goods ahead of delivery, avoiding the scenario of a costly recall. 

Embracing the new and overcoming challenges 

Another challenge manufacturers face is adopting new processes and adapting existing infrastructure to support production. This is especially true when it comes to the use of mRNA and viral vector manufacturing methods which have been adopted in response to the increased demand caused by Covid-19. While both of these have been crucial to speeding up development on the vaccine production line, manufacturers now have to overcome the challenge of establishing supply chains to cater for this new technology. To successfully achieve this, it is vital manufacturers are able to seamlessly integrate and quickly test new production processes, without disrupting existing supply chain operations. 

With an updated ERP system, any changes or new technology adjustments made to the supply chain, can be completed in a highly monitored environment. This is because of the high volume of reportable data the system produces as well as its capabilities to seamlessly adapt and integrate with newer software. In addition, all relevant stakeholders including suppliers and regulators, are able to obtain information in real-time around how the new processes are functioning. Subsequently, if there are any concerns with a particular part of the supply chain, for example the glass tubes the vaccine is tested in are faulty, the necessary stakeholders have visibility on this and can efficiently sync on what must be done to rectify the issue. For manufacturers operating with an outdated ERP system, they risk failing to introduce new processes such as mRNA at the speed required to ensure efficiency on the supply chain. In turn, these businesses will ultimately struggle to keep up with the competition. 

Driving success with resilience  

Armed with modernised ERP technology, manufacturers can improve the supply chain in more ways than one – from increasing supplier flexibility and agility, to boosting traceability and enabling the smooth integration of new production strategies. What’s more, given the ability of ERP to integrate with existing methods, businesses do not have to completely revise their entire approach to the supply chain in order to reap the benefits. It’s no secret that ERP is commonplace amongst manufacturers. However, it will be those that ensure legacy systems are eradicated that will succeed. With an upgraded ERP system, pharmaceutical manufacturers can deliver on the current climates’ increased demand, safe in the knowledge that their supply chain is resilient and prepared.