Just when pharmaceutical supply chains had begun to recover from the chaos of the pandemic, companies are now faced with the threat of US tariffs and the ongoing investigation into the United States’ reliance on drug imports. Nick Fryer, vice president of marketing, Sheer Logistics discusses.
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According to a recent survey, 90% of US biotech companies rely on imported components for at least half of their US Food and Drug Administration (FDA)-approved products. 94% of the survey respondents forecast an increase in manufacturing costs if tariffs are placed on imports from the European Union.
These newer threats to supply chain operations have once again made it clear just how important it is to have strategies in place that protect supply chain resilience. Change is inevitable, but as we’ll explore, the right technologies and interventions can empower companies to stay the course and prepare for disruptions long before they occur.
Addressing the complexities of pharmaceutical supply chains
Even before the pandemic or US tariffs hit, there were calls to reconsider the global pharmaceutical supply chain. Over-reliance on any one part of the world for manufacturing increases the risk of supply chain disruption and drug shortages.
The problem is that pharmaceutical supply chains are some of the most complex in the world. Regulatory compliance plays a massive role in this, with various international and local agencies placing stringent requirements on traceability, quality control, etc.
Pharmaceuticals are also at risk for counterfeit and gray market diversion for this not to be the case. Adding to the complexities is the fact that more medicine than ever is requiring strict cold chain storage.
Market fluctuations, sustainability challenges, and the general worry of proper inventory management all then become that much more difficult to manage under these conditions. Overcoming supply chain disruptions largely comes down to two things: better technology and supply chain visibility.
Enhancing supply chain visibility through advanced data analytics
Advanced data analytics have become fundamental to staying competitive in pharmaceuticals, especially when it comes to supply chain visibility. Here’s how:
Real-time tracking: IoT sensors are the main tool for this. When embedded in containers or pallets, they can collect location, temperature, and humidity data and provide the information in real time so that nothing gets missed. Thanks to the data they provide, companies can see exactly where goods are at all times and what condition they’re in.
The visibility this provides makes it far easier to respond to supply chain disruptions quickly and effectively. Real-time data allows for real-time problem solving that, in the end, helps keep the fallout from any disruptions to a minimum.
Automating document processing: Part of what makes large pharmaceutical supply chains difficult to track is the sheer amount of paperwork and information they generate. There are regular audits, inspections, quality control reports, etc., which all gather data separate from IoT sensors and GPS trackers. Making sure that the information in all those documents gets tracked used to be a matter of painstaking, manual administrative work. Natural Language Processing (NLP) is changing that.
NLP tools can be used to analyse the kind of unstructured data you would find in an auditing report, for example, and with advanced data analytics, then provide summaries and insights into that information, which is crucial, given that nearly 15% of supply chain breaches involve third-party data failures. The analytics essentially help organise everything into actionable points, such as where compliance issues have arisen, or notable patterns that might be behind recurring issues.
End-to-end mapping: When fed into ERP systems and data integration platforms, the information from IoT sensors and automated document processing platforms, for example, can be used for end-to-end supply chain mapping. This provides a unified look at the entire supply chain, which makes coordinating between manufacturers, etc., that much easier.
Getting all that data together in one place, especially if manufacturers also participate in advanced data analytics and share information, allows companies to see more of the supply chain and, in turn, do more to protect it.
Optimising cold chain logistics for temperature-sensitive pharmaceuticals
Medical advancements have created a rising demand for pharmaceuticals that require cold chain storage during transit. This can make logistics quite challenging. Here are a few key strategies and technologies that can be used to optimise things:
Real-time monitoring: IoT sensors are a highly effective way to track not just the conditions of pharmaceuticals in transit, but how well machinery and refrigeration are working. Sensors can be set up to automatically flag if temperatures change or something stops working, so that fixes can be done before quality is lost.
Centralised tracking systems: Cloud-based systems and platforms that integrate all the tracking being done ensure that any delays are spotted early and necessary interventions made to prevent spoilage.
Advanced packaging solutions: New materials are being released all the time that can maintain stable temperatures for longer (even without refrigeration) and provide added protection when pharmaceuticals are handed over for deliveries, etc.
Route optimisation: Better routing can take a huge amount of pressure off the cold chain. The reason for this is that the kind of AI-optimised routing a TMS system offers can help shorten transport time by providing the quickest routes and best mode of transport to use as well.
Implementing predictive analytics to mitigate supply chain risks
We’ve mentioned various forms of data tracking thus far and the value they provide in real-time visibility for the pharmaceutical supply chain, but there’s also an opportunity to look forward.
Predictive analytics take historical data and use it to forecast demand, disruptions, and various other events. The result of this is that supply chains get a chance to prepare for and mitigate risks well in advance. For example, if the same issue keeps cropping up with the cold chain, the analytics will pick it up and help predict when it will happen again. Insights like this help keep the supply chain moving and make it far more resilient.