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The Challenges in Pharma & Life Sciences Supply Chains & The Role of Visibility

April 19, 2022

April 25, 2022

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Rising costs and material shortages have impacted supply chains across all industries, and the pharmaceutical and life sciences industry is certainly no exception. With pharmaceutical and life sciences supply chains, though, come even more complexities and challenges that must be overcome. Thankfully, improved supply chain visibility can go a long way toward mitigating these challenges and empowering pharma and life sciences companies to create robust, reliable, and efficient supply chains.

The State of Pharmaceutical & Life Sciences Supply Chains

According to an article published by Harvard Business Review titled "The U.S. Needs to Reimagine Its Pharma Supply Chain," 80% of the world's active pharmaceutical ingredients (APIs) come from China, India, and a few other small foreign countries. Without these APIs, every drug, from over-the-counter pain pills to IV solutions, would not be possible.

Unfortunately, all of the factors currently impacting supply chains across industries also affect pharmaceutical supply chains. Rising shipping rates, port congestion, product shortages, and geopolitical tensions are just a few of the challenges making it more difficult than ever for pharmaceutical companies to maintain reliable supply chains.

Challenges Faced by Supply Chain Professionals in the Pharma & Life Sciences Industry

Life sciences supply chain challenges and pharma supply chain challenges come in several different forms. Today, some of the most substantial challenges standing in the way of efficient pharma supply chain management include:

Transportation Management

Despite a global economy that has become increasingly intertwined, it has never been more difficult for pharmaceutical and life science companies to manage the transportation of the commodities they rely on. Rising demand and limited supply have forced many carriers to raise their rates dramatically. At the same time that shipping rates are rising, so too is the frequency of delays and cancellations.

Tracking Shipment Condition

Shipment condition issues aren't a challenge that is unique to pharma and life sciences supply chain management, but it is a challenge that is especially pressing for many pharmaceutical companies. A large number of drugs and APIs, for instance, must be constantly stored at specific temperature ranges. Exposure to temperatures outside this range for an extended period will ruin the quality of these products.

Products that are damaged or destroyed during transportation are never a good thing. When the products in question are life-saving drugs and drug ingredients, this issue comes with much higher stakes. Therefore, pharmaceutical companies must track the condition of their products throughout transportation to ensure the quality and safety of those products once they arrive at their destination. However, at a time when many organizations struggle even to track the location and status of their freight moves in all modes, accurately tracking shipment conditions as well can be a real challenge.

Shortages

There are various shortages currently impacting the pharmaceutical and life science industries. Labor shortages, for instance, have dramatically slowed the output of factories across the globe, including factories responsible for producing pharmaceutical products, components, and ingredients. Material shortages have certainly impacted the pharmaceutical industry as well, with plastics, polymers, wood, steel, and everything in-between all becoming less available and more expensive.

Energy Issues

According to Centrica Business Solutions, the pharmaceutical industry spends about $1 billion per year on energy expenses and produces 55% more emissions than the automotive industry. This high energy usage has to do with the fact that pharmaceutical products must be produced, transported, and stored in exacting temperature, pressure, humidity, cleanliness, and containment conditions—and maintaining these conditions requires a lot of energy. With energy costs soaring, though, shouldering the burden of this supply chain expense is now more challenging than ever.

Geopolitical Tensions

The war between Russia and Ukraine and the resulting sanctions levied against Russia have made pharma supply chain management all the more challenging. While Russia is not a major exporter of APIs and pharmaceutical products, sanctions against the country have nonetheless forced many pharmaceutical companies to cut ties with Russian suppliers. The biggest impact of the war in Ukraine, though, is its impact on energy costs. Russia is one of the world's largest exporters of oil and natural gas. Pharmaceutical companies losing access to this market is a significant blow for an industry with exceptionally high energy consumption.

At the same time that pharmaceutical companies are struggling to deal with the fallout of Russia's invasion of Ukraine, tensions between Western countries and China threaten to create an even more serious problem for pharmaceutical companies. As the world's leading exporter of APIs, China is a crucial trading partner for the pharmaceutical industry. While this supply of Chinese APIs remains stable enough at the time, any increased tariffs or another form of conflict between China and Western countries could threaten this critical supply.

How Real-Time Shipment Condition & In-Transit Visibility Helps

Of all the pharma supply chain solutions that can be employed to mitigate the challenges supply chain professionals face in this industry, supply chain visibility is by far the most impactful. Improved supply chain visibility enables pharmaceutical companies to achieve more effective transportation management, allowing them to anticipate disruptions before they occur and respond in a swift and calculated manner. Supply chain visibility also enables companies to highlight areas of their supply chains where there is room for improvement in terms of both reliability and cost-effectiveness.

In addition to visibility solutions that enable pharmaceutical companies to track the location and status of their shipments, solutions for tracking shipment conditions are also vital. We've already covered the fact that many pharmaceutical products and ingredients must be transported in specific conditions. The ability to track shipment conditions in real-time is critical for preventing damaged and potentially dangerous products from slipping through the cracks.

The Benefits of Real-Time Visibility in Pharma and Life Science Supply Chains

The benefits of real-time visibility in pharma and life science supply chains are multi-faceted. For one, supply chain visibility enables pharmaceutical companies to better respond to disruptive events. For instance, efficiently pivoting to a new supplier when the original supply is disrupted requires a pharmaceutical company to thoroughly understand its supply chain and anticipate disruption as quickly as possible—both of which can only be achieved with a transparent supply chain.

Meanwhile, real-time shipment tracking enables pharmaceutical companies to ensure the shipments they rely on arrive on schedule. Similarly, shipment condition tracking ensures the safety and quality of those shipments are maintained at every point in their journey.

Ultimately, there is only so much that pharmaceutical companies can do to combat rising prices and growing shortages. Supply chain visibility that empowers an efficient, agile, and reliable supply chain, though, can go a long way toward mitigating the challenges that these issues present.

Conclusion

If you would like to optimize your pharma or life science supply chain for maximum visibility, we at Tive can help! With Tive, pharmaceutical companies can effortlessly track their shipments’ location, status, and condition in real-time, promoting complete supply chain visibility.

To learn more about how Tive is helping pharmaceutical and life science companies overcome the various challenges associated with maintaining their supply chains, be sure to contact us today. 

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