In the past, the pharmaceutical industry has proven its worth to society time and time again. Especially during the COVID-19 pandemic, many pharmaceutical leaders rallied to enable the supply of key medicines across borders, manage workforce safety, and handle evolving government restrictions, all while making preparations for new vaccines and treatments.
The main challenge for pharmaceutical companies in these difficult times was to keep their supply chain and production lines running. This they did remarkably well, as activity levels in the sector are currently 14.6% higher than they were at the end of 2019, according to research from GlobalData. Solventure’s pharma customers are no different. With the shock of the pandemic mostly behind us, it is time to take stock of the rapid changes in supply chain that were pushed in response to the immediate crisis, while looking ahead to the long-term improvements that can still be made to their S&OP structure.
A complex and high-stakes supply chain
Generally speaking, the pharmaceutical supply chain is very complex, requiring a number of steps that must be taken to ensure medications are available and accessible to patients. A wide range of stakeholders is also involved in the pharmaceutical supply chain, such as manufacturers, wholesale distributors, and contract manufacturing organizations (CMOs).
In such a complex process, the stakes are high for pharmaceutical companies. Drugs that are distributed incorrectly affect both the company’s reputation and customer satisfaction, as well as potential profit. An ineffective supply chain could also disrupt the healing processes of patients and produce negative effects on public health.
That is why reorganizing their way of working and optimizing supply chains is key to create more resilience in the long run. In the aftermath of COVID-19, the intense focus on risk management across networks and supply chains will have to make way for more long-term and agile strategy changes in S&OP. It is the only way for pharmaceutical companies to get ready to extend their future production capacity, manage dual sourcing and diversify their geographic footprint.
How Solventure helps to overcome specific pharma challenges
The importance of the pharmaceutical sector for Solventure cannot be overstated. Over 25% of our turnover is represented by the industry, and our number of clients in pharma easily takes a top 3 spot in our overall customer portfolio. This focus on pharma is the reason we are focusing on key developments in Sales and Operations Execution (S&OE) and are translating new strategic developments in supply chain management to the daily operational reality of the pharma S&OP.
Streamlined demand management
The pharmaceutical value chain is dependent on two major demand forecasts. On the one hand, very long-term forecasts (up to 5 years) for new pharma launches and supply chain readiness. This includes making accurate market potential and launch forecasts for different distribution channels and B2B which drives the capacity building. On the other hand, we have short to medium-term replenishment forecasts that are based truly on-demand plans and analysis based on sell-in versus sell-out data. This is for established products but is still driven by customer demand.
Solventure helps customers navigate these different forecasts, long lead times and the added difficulty of short-term tenders. Through our Arkieva One Plan S&OP Software Suite, we help you with the high service-level requirements, or the cost-control targets, depending on your position in the market. We developed our approach by bringing together years of experience, extensive capabilities, and in-house technologies. That is how we help our customers to get the greatest efficiency out of their production infrastructure.
Efficient supply chain planning
Given their large complexity, keeping plant and supply chain efficiency high is one of the most challenging tasks pharmaceutical companies are dealing with. In this sense, the complex transformation of active pharmaceutical ingredients (APIs) into final products must be modeled in detail. Multi-site production companies require an efficient recipe development model, which must be shared among local laboratories and plants to reduce time-to-market.
All these challenges must be managed on several planning layers. The long-term capacity must be projected accurately to scale up production in time, keeping in mind long API lead times, purchase constraints, and new product launches. On the mid-term, ‘batch pooling’ must ensure that APIs and semi-finished inventory are created just-in-time and able to be consumed exactly by the right combination of Finished Goods (FGs). Finally, intelligent sequencing on the production floor is key to minimize sanitation and changeover times, while keeping plant efficiency high.
Exactly for these kinds of complex production models, Solventure created a 7-step approach to drive sustainable change and value through S&OP. It gives a holistic perspective of the importance of people, processes, tools and analytics in the entire process, while focusing on a hands-on, and long-term, approach to streamline our customers’ supply chain.
Clear compliance to Good 'x' Practice (GxP) and other regulatory constraints
One of the constant concerns the pharmaceutical industry faces is the safety of its products. GxP is a collection of regulations that aims to resolve this matter in a systematic way. The ‘x’ is a variable that can be replaced by manufacturing, laboratory, documentation, and clinical practice. In short, it provides a set of guidelines to ensure that pharmaceutical products and services are safe.
Solventure has plenty of hands-on experience with GxP and other industry regulations, supported by years of documentation and best practices in testing. We visualize and validate the quality of ERP master data with the easy-to-use dashboard of the Arkieva Data Connector and match it seamlessly with the tailored methodology in the Arkieva planning software.
Connecting is key
Overall, the pharmaceutical supply chain is vital for patients to receive the medications or vaccinations they need without having to deal with stress or roadblocks along the way. Although the pharmaceutical industry faces various complex challenges, Solventure can support customers in taking the necessary steps to ensure a smooth and efficient supply chain process from manufacturing of products to delivery to patients. In turn, this makes the day-to-day life of Planning employees a lot easier and eventually opens the way to a fruitful and long-term S&OP partnership.