Although the pharma industry has performed a remarkable feat during the pandemic in delivering vaccines while also meeting growing demand, current trends create a challenging environment for companies, as they face greater costs, complexity, and risk. Now is the time to rethink operational strategy to respond to these trends and remain competitive. Such change may have associated challenges and will require bold and innovative initiatives, decision making and leadership. When organisations have the technology to rewire the supply chain, it means potential disruptions have been considered and planned for, making companies both more efficient and able to react quickly. Accidents, such as products lost or damaged in transportation, and disruptive events, like the COVID-19 pandemic, can and will happen. But, with a proactive supply chain, organisations can react to these disruptions swiftly, allowing them to lessen their liability, maximise profit, and mitigate supply chain risks as they scale – thus allowing for flexibility in the supply chain by accommodating the day-to-day changes that naturally occur. Masud Shaikh, Sr Vice President– Distribution and Marketing, Alembic Pharmaceuticals briefs UPAMANYU BORAH how they allow for rapid changes as needed, protecting enterprise continuity and delivering to patients as they strategise solutions.
Genesis and Operations
We are a 115-year-old company that has been well established in the market, serving humanity since 1907. Our group company, formerly Alembic Chemical Works Company, was a unique venture in pre-independent India. The distillation of spirit through modern processes and its utilisation in the manufacturing of pharmaceutical products were inventive ideas back then. We stood by the nation as an agent of change, promoting scientific research dedicated to social well-being through two World Wars, the journey towards liberation, and the social and health crises post-independence.
We are trusted in India for developing and delivering specialty medicines that cater to several chronic and acute therapies. Our products, spanning 185 brands, enjoy high brand recall among medical professionals. Research expertise and on-ground efforts of 7,000+ field staff, are duly empowered by our 22 divisions. Of our product portfolio, 14 per cent figures on the National List of Essential Medicines.
Strengthening supply chain in times of uncertain times
Our company has made a global impact, and with meticulous planning, we are able to ensure 100 per cent availability of our products despite unexpected demands in the market.
While challenges were plenty, effective planning and execution enabled us to handle the situation well. During the COVID-19 pandemic, we efficiently mobilised our stocks using various modes of transportation. Not only did we maintain sales, but we also dispatched promotional inputs to doctors for COVID-related products. Our flexible strategy allowed us to adapt to the market situation. We closely monitored the daily product movement and consistently replenished them beyond our sales targets. Additionally, our channel partners demonstrated flexibility by dispatching goods through private vehicles to ensure the products reached end customers.
Unique and innovative strategies enabling service abilities
We closely monitor market situations. For example, during the pandemic, we analysed cases in each state, and projected the expected demand. Accordingly, we ensured the availability of stocks. Additionally, we supplied COVID-19 utility products to all medical practitioners dedicated to serving humanity.
During the lockdown, we coordinated with selected transporters who were able to move the consignments. As part of the pharmaceutical supply chain, we formed a group with peer companies to discuss the challenges faced during the pandemic and find solutions to overcome them. We also consolidated various loads with other companies to expedite the movement of trucks.
Aligning distinct capabilities with strategic approaches
An unprecedented pace of change driven by the implementation of technology is driving the pharmaceutical supply chains to become leaner, faster and more self-sufficient. Automation is being adopted at nearly every stage of the supply chain to improve process efficiency, Blockchain architecture is revolutionising the meaning of compliance and product transparency, and a host of machine learning (ML) powered approaches are rapidly fastening the pace of order fulfillment for greater patient serviceability.
At Alembic, we have a robust internally developed Management Information System (MIS) within our organisation. This system enables us to track sales data in real-time, with minute-by-minute updates from our field staff. It allows us to stay informed about the status of sales at all times.
Enabling Value Generation
In the pharmaceutical industry, costs are fixed based on the Maximum Retail Price (MRP), and any additional costs are absorbed by the company. As a result, no additional costs were imposed on the end customers. Our top priority is to ensure that the goods reach the end customers, regardless of any challenges or costs involved.
However, in a partnership, everyone should share the burden. To give an example, suppliers often overlook logistics, warehousing, fulfilment, marketing, sales, and many other costs of bringing a product to market. Currently, transportation times and costs are at historical highs and most deals are quoted FOB in the port closest to the supplier. The brand owner bears responsibility for all transportation costs and working capital during transit time – both of which in recent months have more than doubled. Therefore, it is important to make sure the supplier understands you are absorbing any higher costs and you’re looking for a partner to share the burden.
Tight-knit collab with partners to keep the engine running
During crises, in particular, it is crucial to clearly define the expectations from all parties involved, including suppliers, transporters, and other functions within the organisation. Tracking the service levels at each end becomes a key factor in managing such crises. In the meantime, advance planning plays a vital role in ensuring smooth operations.
Refined planning of Logistics
Logistics plays a crucial role in the overall progress of a business. A significant portion of this responsibility lies with our logistics partners, as they are on the ground, moving our consignments. It is of utmost importance that they deliver the goods on or before the scheduled time. We can attribute around 80 per cent of this function to our logistics partners, while the remaining 20 per cent lies with our internal team, who oversee the deliverables.
At present, we have not outsourced our logistics functions, and our dedicated team manages it internally. This means we haven’t engaged with any logistics service providers (LSPs) as of now, except for the transporters with whom we have signed annual contracts that are reviewed yearly.
Megatrends changing the face of supply chain executives
- Automation for greater efficiency
Warehouse operations such as picking and packing remain labor-intensive steps in the supply chain. However, with the rising implementation of warehouse-automation technologies such as autonomous mobile robots and aerial drones, manual processes are fast becoming redundant and prone to less human error.
The potential impact of automation technologies can also go beyond the operational improvements in the warehouse. Automation can encourage pharma companies to handle fast-changing multichannel and omnichannel requirements efficiently while supporting same-day and next-day delivery.
- Smarter security and visibility with Blockchain
While Blockchain has primarily been associated with cryptocurrencies, the technology yields the potential for improved end-to-end visibility, transparency and security across global supply chain processes.
Blockchain creates this notion of immutability. No record can ever be erased, offering supply chain managers a solution to track the source of goods and establish trust in shared supplier information.
- ML for global supply chain optimisation
Every modern supply chain has a vast treasure trove of data that can unlock insights to optimise global supply networks. By harnessing ML technologies, which is a discipline of artificial intelligence (AI), pharma companies will be able to proactively manage data and optimise strategic sourcing relationships that will increase customer satisfaction and boost sales.
Coupled with predictive analytics, the AI transformation will go much deeper than providing supply chain practitioners with smarter processes and functions. It will give pharma companies access to the tools to aggregate and analyse data from multiple sources ensuring complete visibility throughout the cold chain, allowing supply chain managers to predict hurdles and allocate resources properly before the cold chain process starts.
- IoT to transform manufacturing and supply output
The pandemic crisis is a stark reminder of the urgency required to get life-saving medicines, vaccines and medical equipment to market quickly around the globe. The Internet of things (IoT) has already proven to be critical in providing pharma companies with the right tools to identify COVID-19 symptoms and rapidly grant patients with better treatment, but it can also have a profound impact on supply availability by improving batch processes in manufacturing.
- 3D printing for a patient-centric product supply chain
In line with pharma businesses becoming more patient-focused, the growing appetite for personalised products and increasing demand for made-to-order and localised products, 3D printing is becoming a key focus for overcoming material complexities in the supply chain.
While manufacturing products in certain locations can be done at a relatively low-cost, managing a global logistics network cannot, especially as transportation and trade costs are predicted to rise by 15–31 per cent due to disruptions from the pandemic. Thanks to metal additive manufacturing technologies, however, supply chain players are able to decentralise production closer to where demand is, suggesting the industry will see a slow decrease in logistics and transportation cost and a reduction of carbon footprint emission across the supply chain.
