Pharmaceutical Supply Chain Cost Reduction

In the pharmaceutical and related health care industries it is entirely possible to achieve annual cost-reduction opportunities of at least 10%  Cost reductions are part of a broader effort at improving your efficiencies and competitiveness. The following are some recommended steps that should be taken to improve efficiencies and attempt to cut costs in the pharmaceutical supply chain.


Redefining And Strengthening Pharmaceutical Supply Chain Management


Redram Alaedini in Life Science Leader discusses that there are significant business process inefficiencies in most pharmaceutical companies that exist in every department and group. These inefficiencies have slowed the industry and consequently created an environment filled with opportunities for significant improvement and cost reduction. For example, delays in product development, poor manufacturing processes of new product formulations, regulatory delays due to inefficient submissions, inadequate marketing and sales forecasts, and high recruitment costs all put tremendous cost burdens on the supply chain.

Without a strong, lean, and highly motivated supply chain group, any pharmaceutical company would constantly struggle with slow new product introductions, manufacturing difficulties, and product backorders; high inventory, raw material, and labor costs; and significant regulatory issues. Therefore, supply chain improvement initiatives, in most cases, tie in directly with other internal and external departments and groups, and therefore must be undertaken in cooperation with them.



The Pharmaceutical Supply Chain: Supplier Management, Cost Reduction and Beyond (Part 1)


In addition to some major trends taking place in the pharma supply chain, Jason Busch from Spend Matters discusses an analysis of the future of the pharma supply chain. Jason talks about the reasons procurement must be front and center regardless of which scenario or company path an organization wishes to take and compete on the basis of within the industry.



10 steps to improve efficiencies in the pharmaceutical supply chain


In Health Care Packaging 10 steps are outlined for improving efficiencies:

  1. Cut out the middle man (wholesaler)

  2. Improvements in tracking product.

  3. Improve technology in the manufacturing process.

  4. Shift manufacturing outsourcing to new markets like India and China.

  5. Quality control will be increased.

  6. Analyzing how money is being spent and where it is going is a factor.

  7. Cutting costs in areas where there is wastage and money is not being used efficiently.

  8. Supply chain analytics should be done.

  9. Once supply chain analytics have been conducted the pharmaceutical company can then apply the necessary changes needed to increase efficiency and cut costs in the supply chain.

  10. Examining the purchasing team in the company.