The total value of the pharmaceutical supply chain is predicted to increase to around $5289.53 million by 2032, with billions of dollars of vital products moving through the chain each year.
And with life-saving pharmaceuticals continuously flowing through the pharma supply chain, visibility over the safety and integrity of these products is essential. Yet, with economic, social, and legal factors creating challenges in the supply chain, businesses in this sector must increasingly rely on technological solutions to achieve full visibility over their operations.Â
Painted against the context of a rising demand for pharmaceuticals, the pharma industry must identify strategies to enhance the transparency and efficacy of their supplier links.
The Crucial Role of Supply Chain Visibility in the Pharma Industry
The pharmaceutical industry is deeply complex, requiring a diverse selection of natural resources that must be kept in pristine quality. Even the procurement stage of the pharmaceutical supply chain may require an extensive global network of connections, each of which may have unique local laws to understand and maintain compliance with.
The manufacturing process for the pharma supply chain requires sophisticated technology, time-sensitive production schedules, and interaction with complex chemical processes. Businesses must be able to document and validate that they are following best practices during these processes to demonstrate the quality of the drugs they are producing.
Even the distribution and delivery stage of the pharmaceutical supply chain comes with its difficulties, as many drugs require cold-chain logistics, effective logistics management, and robust tracking systems to ensure no drugs are lost on the way.Â
The final delivery of products must also come with drug identification, as recent problems with counterfeit drugs have reduced the general trust in this supply chain system. In 2022, there were over 6,600 cases of counterfeit drugs arriving at hospitals, demonstrating the lucrative market thieves are taking advantage of.
Source – Pharmaceutical counterfeiting cases from 2018-2022.
In the pharma supply chain, compliance with high-quality standards and regulatory requirements isn’t just a legal obligation. Considering that the drugs that a company supplies are often used in medical treatment plans and life-or-death situations, compliance is also a moral requirement. The improper handling or storage of pharmaceuticals, especially considering many are temperature-sensitive, could directly impact patient safety.
Pharmaceutical companies must adhere to Good Manufacturing Practices (GMP) and Good Distribution Practices (GDP) in order to deliver quality products to patients across the globe. With the severe nature of this industry, those who work in pharmaceuticals must endeavour to achieve compliance despite the complex nature of their supply chain.
The first step toward overcoming these challenges is using advanced tracking and monitoring solutions to enhance transparency and achieve compliance.
Challenges in Achieving Full Supply Chain Visibility
Due to the sensitive nature of the final product in the pharmaceutical supply chain, providers and vendors in this industry must have constant vigilance over their supply links, transport connections, and warehouse conditions.
With a high level of risk, this industry’s supply chain has to maintain visibility over every single area involved. However, there are three unique challenges that can diminish transparency and impact overall visibility.
Tracking and Transparency Hurdles
Medicine is needed in hospitals all across the globe, instantly scaling the need for visibility to one that encompasses transport on a global scale. With the sheer scope required by the pharma supply chain, effective tracking has become a monumental task.
Even with effective monitoring systems in place, the volume of data produced by track-and-trace systems makes full visibility over each segment of the supply chain an extremely costly endeavour. Storing all of this data requires pharmaceutical companies to work with cloud storage vendors, incurring huge monthly costs for storing and constantly generating more real-time location and status data.
Tracking goes far beyond just mapping where shipments are. Due to the precarious nature of the drugs involved in the pharma supply chain, everything right down to the humidity and temperature readings of individual shipping units must be catalogued to ensure that the final product is still effective upon arrival.
From transparency issues with vendors to the difficulty with managing tracking on a global scale, the pharma industry faces major supply chain problems.
Dealing with Counterfeit and Falsified Medicines
Every single year, the consequences of counterfeit medicine amounts to around $200 billion USD in revenue impact. Beyond just revenue damages, counterfeit medicine that ends up in hospitals can pose a dramatic risk to patient lives.
Counterfeit medicine often contains the wrong drugs or is incorrectly formulated, meaning it does not have the desired effect when administered to a patient. This was demonstrated during the COVID-19 pandemic, when many drugs experienced a surge in demand. The increased demand led to criminals attempting to bring their counterfeit drugs to the market.
INTERPOL, one of the main entities that tracks and seizes counterfeit drugs, saw a huge increase in fake medical products during COVID-19.
With the severity of the risk that fake drugs pose, pharmaceutical companies must implement comprehensive tracking procedures.
Ensuring Quality Control and Proper Handling Throughout the Pharma Supply Chain
Another major challenge that impacts the pharma supply chain is the stringent quality controls. Due to the importance of a perfect final product, businesses must ensure that proper handling strategies are used.
Businesses in this industry must introduce end-to-end traceability and quality checks within their supply chains. While these processes can be costly, companies cannot cut corners when it comes to quality control and proper handling.
Every pharmaceutical company must be able to attest to the proper handling of their products from end to end.
Technological Innovations Enhancing Supply Chain Visibility
The widespread reliance of hospitals and medical institutions on the pharma supply chain has led to a great deal of technological innovation in the sector, including access to a number of leading technologies that provide solutions to many core challenges.
Here are three technologies actively breaking down barriers in the pharmaceutical supply chain and enhancing visibility.
The Application of Blockchain for Secure Tracking
Blockchain technology offers an immutable ledger that businesses can use to enhance visibility in their own supply chain. Once a transaction has been recorded to the blockchain, it cannot be altered. Due to this, movements in the supply chain would have a highly visible trail of information that companies could use to track shipments and record the movements of their products.
When using blockchain technologies in the pharma supply chain, there is an added layer of forced transparency that suppliers have to engage with. This visibility would help to reduce the possibility of counterfeit medicines entering the supply chain. As the movement of products and the process of obtaining raw materials would be carefully traced, there would be less opportunity for criminals to substitute or replace products.
The permanent and available records that blockchain supplies also create a useful paper trail for regulatory compliance.
IoT and Smart Sensors for Real-Time Monitoring
IoT devices, like smart sensors, are a vital piece of infrastructural technology that can help when closely monitoring shipments across the globe. Small and compact IoT sensors can take readings inside transport boxes or cargo shipments to closely monitor the temperature and humidity of transport conditions.
As IoT devices are connected to the internet, they can provide real-time measurements and instantly alert providers if a temperature requirement is breached. The widespread availability of these sensors ensures that their ability to offer real-time insight into regulation conditions helps to dramatically reduce the risk of unknown errors in the transport process.
IoT and smart sensors help to maintain product quality and optimise supply chain operations from end to end.
AI and Machine Learning for Predictive Analytics
Artificial intelligence and machine learning technologies are two of the most impactful innovations that have entered the supply chain industry over recent years. Beyond just the pharmaceutical supply chain, AI and ML can help any industry through enhanced predictive analytics.
AI and ML technology can provide:
- Precise predictive analytics: AI tools can provide real-time data insight for more effective predictive analytics. AI can pinpoint potential disruptions in the supply chain and then suggest measures to avoid these delays.
- Disruptions forecasting: Machine learning models can conduct risk assessments of providers to identify potential events that may reduce the ability of a supplier to comply with their obligations. By forecasting these disruptions ahead of time, pharma supply chain companies can prepare for the future and implement strategies to overcome these disruptions.
- Optimisation suggestion: With real-time data processing and analysis, AI tools can even suggest enhanced routes for logistics drivers to take. Route planning using AI systems is now a common use of AI, with companies like Walmart avoiding emitting over 94 million pounds of CO2 by planning more effective routes in 2023.
AI technologies provide a plethora of opportunities to pharma supply chain companies to enhance their processes and create a more efficient transport and monitoring system.
The Future of Pharma Supply Chains
Over the next few years, with the emergence of new technologies and the improvement of current processes, pharma supply chain businesses will increasingly have to be aware of current opportunities in the space. Leveraging new strategies and technologies will improve visibility into the pharmaceutical supply chain and forge more effective supplier relationships.
As we progress further into a digital age of supply chain management, operators in the pharma supply chain must:
- Embrace emerging technologies: As new technologies, like AI, IoT, and ML, come to market, your pharmaceutical business has the ability to create a more transparent, agile, and effective supply chain. Leveraging technology to improve visibility and embed predictive analytics into your processes will reduce risk and streamline your supply chain.
- Prioritise collaboration: Effective monitoring of a supply chain from end-to-end requires extensive trust and visibility over partner operations. Establishing strong relationships between suppliers and operators can enhance visibility and lay the foundations for a more reliable business relationship. Advanced collaboration will also allow you to help suppliers reduce their risk overhead, creating better supply links for all.
- Engage in risk management: Conducting risk assessments of suppliers and diversifying active supplier links will help to reduce the overall risk that companies in the pharmaceutical industry take. With less risk, your business is less likely to experience disruptions and potential issues in the supply chain.
Businesses must maintain a proactive approach when it comes to visibility in the pharmaceutical supply chain. Implementing risk management and mitigation solutions will help companies create a network of suppliers that they can rely on far into the future.
Pharmaceutical organisations that can leverage emerging technologies, foster tight-knit collaborations, and manage risk will thrive in the coming years.
Improving Pharma Supply Chain Visibility in the Coming Years
The pharma supply chain is a highly complex system that must consistently deliver products in perfect conditions. As a high-risk industry that faces issues with counterfeit drugs, quality problems, and transparency barriers, suppliers must do everything possible to maintain visibility over their supply chain.
Over the coming years, as demand continues to grow, collaboration and the proliferation of smart technology will become even more necessary. Suppliers that take a proactive approach and craft strategies for a resilient supply chain will deliver high-quality products to patients across the world for years to come.
Book a Prewave demo today to explore our supply chain visibility solutions to provide your pharmaceutical supply chain with operational excellence and strengthened resilience. Full transparency is only a click away.
