By: George Mathew
In the pharmaceutical sector, procurement is the process of procuring the supplies, tools, and services required to produce medicines, clinical trials, and other associated tasks. There are various crucial factors to consider when purchasing pharmaceuticals. To guarantee the security and effectiveness of the finished products, it is first necessary to source premium chemicals and raw materials from reliable vendors. To satisfy regulatory requirements and protect the quality of medicines, this is essential. Additionally, pharmaceutical procurement involves managing relationships with suppliers, negotiating contracts, and ensuring timely delivery of materials. Collaboration with suppliers is vital to maintain a steady supply chain and avoid disruptions in production. By streamlining procurement processes, the industry can improve efficiency, reduce costs, and ultimately contribute to better healthcare outcomes for individuals worldwide.
Current procurement strategies for the pharmaceutical industry
Effective supplier relationship management:
Having enduring ties with suppliers is essential for getting better APIs at the best pricing. It is considerably more beneficial to establish a solid rapport with a trusted provider than to keep switching pharma vendors to save costs. The whole procurement ecosystem is impacted by frequent supplier changes. In order to make any required adjustments to their operations, suppliers spend a lot of work knowing your company’s demands over time. This includes receiving feedback on the quality of raw materials purchased and the speed of shipments provided.
Sustainable and ethical sourcing:
The pharma industry is addressing sustainability by prioritizing sustainable sourcing of raw materials. This involves working with suppliers who adhere to environmentally friendly practices and promote responsible land and water use. By doing so, pharmaceutical companies contribute to the preservation of natural resources and protect ecosystems. Ethical sourcing also extends to the labor conditions within the industry. Pharmaceutical companies are actively working to ensure fair treatment of workers and promote safe and healthy working environments. In addition, many companies are implementing stringent auditing and certification processes to verify the sustainability and ethical practices of their suppliers.
Support strategic vision:
Pharma’s current supply chain management system ought to aid in achieving its strategic objectives. Spend analytics, which is collected from many aspects of purchase transactions, can perform features like a quicker purchasing process. The success rate of higher-quality materials from approved suppliers, competitive pricing information, and assessing on-time delivery from preferred suppliers are just a few examples of key analytics that can help the purchasing department of the organization make better decisions and achieve its objectives.
Futuristic and innovative procurement strategies
End-to-End Data Traceability:
In the near future, the pharmaceutical industry’s existence may be made simpler if pharmaceutical businesses are able to track every stage of the pharmaceutical supply chain from the manufacture of the medicine to the patient’s hands. This would enable a multitude of benefits such as ensuring product authenticity, enhancing patient safety, improving efficiency, and combating counterfeit medications. This would allow for real-time monitoring of the product’s journey, ensuring that it remains within the required temperature and storage conditions.
Increased Reliance on Artificial Intelligence:
Artificial Intelligence has the potential to revolutionize various aspects of pharmaceutical research, development, and manufacturing processes. With its advanced analytical capabilities, AI can help pharmaceutical companies analyze vast amounts of data, such as patient records, clinical trials, and scientific literature, to identify patterns and insights that humans may have missed. This can lead to faster and more accurate drug discovery, as well as the development of personalized medicines tailored to individual patients.
With automation, pharmaceutical companies can streamline their packaging processes, reducing the risk of human error and ensuring consistent quality. Automation technologies like robotic packaging systems, smart labeling, and high-speed packaging machines will revolutionize the industry. They will enable faster production, precise dosage measurements, and improved tracking and traceability. Moreover, automation allows for customization and personalization of packaging, making it easier to cater to individual patients’ needs.
Timely delivery of raw materials can improve how drugs and healthcare supplies are distributed. This would eliminate the risk of delay in procurement, saving time and effort, while also ensuring quick access to critical supplies. Implementing user-friendly mobile applications or voice-activated platforms that allow purchasers to place orders seamlessly is essential. These platforms should be integrated with inventory management systems to ensure real-time tracking of available raw materials and supplies.
If pharmaceutical companies manage procurement operations via the cloud, they can move commodities through the supply chain much more quickly. Utilizing portals and clearly defined procedures improves communication with suppliers and speeds up the processes of procurement. The use of interactive visualizations and presentations, augmented reality, and virtual reality for forecasting demand and delivering on time, inventory management, and supplier research can be beneficial for pharma companies.
Success Stories: How SpendEdge pharma giant enhance procurement function
The pharmaceutical business encounters several difficulties with procurement, including choosing a reliable source, issues during the transit of APIs, and improper inventory management, which make it challenging to acquire materials effectively. To tackle this, they need to take a step toward the area of packaging and deliveries.
When a UK-based pharmaceutical business approached us for assistance with a similar issue – the company was facing the problem of damage to the materials because of human error in the packaging and labeling of supplies. Another significant issue they had was that they couldn’t provide the drug right when it was needed,
Their issues were successfully resolved by our specialists, the experts provided insights based on the best practices that will help them with the packaging and labeling. They were able to automate their packing with the aid of these technologies, and they also found it simple to provide vital medications on demand. These solutions assisted them in achieving on-demand delivery and almost eliminated the possibility of material damage during transit.
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Vice President, Sourcing and Procurement Intelligence
George is a procurement specialist at Infiniti Research and provides advisory services to clients across the pharmaceutical, CPG & FMCG, energy, and automotive sectors. He specializes in the procurement areas of industry benchmarking, cost modeling, rate card benchmarking, negotiation advisory, and supplier intelligence.