The Imperative Need of Procurement Process in the Pharma Industry
Today, we can see an increasing trend amongst top companies opting for better procurement management to save costs and remain competitive in the marketplace. Procurement is more than just a cost-cutting tool. By reducing waste and optimizing resources, pharma companies can significantly boost their efficiency. The pharma industry has to tackle a lot of modern-day […]READ MORE >>
Today, we can see an increasing trend amongst top companies opting for better procurement management to save costs and remain competitive in the marketplace. Procurement is more than just a cost-cutting tool. By reducing waste and optimizing resources, pharma companies can significantly boost their efficiency. The pharma industry has to tackle a lot of modern-day challenges right from generic drugs, personalized medicines, rising research and development cost to expensive clinical trials. Improvement of the procurement process in pharma industry can solve such problems and improve the industry profitability.
Why should the pharma industry opt for better procurement practices?
Innovation in Pharma industry does not concern only towards drug innovation. Innovation in procurement and sourcing processes could lead pharma companies to achieve monumental savings opportunities. For instance, successful pharma companies can create innovative incentive models for suppliers to suggest new ideas on ways to reach new market via new sales channel. By ensuring spend control and collaboration across divisions and functions with their supplier network as well as internal stakeholder’s, companies can create more opportunities for innovation.
Collaboration Across Business Functions
When it comes to conducting a clinical trial, business managers are looking to outsource the process to a capable strategic partner. However, they are quite reluctant to place such decisions in the hand of the procurement team. It has been evident that when procurement function takes over the execution of such activities, they strive to find the best partner and negotiate better terms that will drive the overall performance as well as the output. Additionally, clear procurement roles and responsibilities are a must to ensure smooth flow of operations.
Managing Indirect Spend
A vast majority of spend in a typical pharma company goes to indirect spend categories such as IT, MRO, office supplies, travel, logistics, and marketing. Such spends account for millions of dollars that could be saved because of a better procurement process. By improving the procurement process in the pharma industry with strict policies, proper tools, and providing full spend visibility, companies can improve savings from indirect spends and force regulatory compliance.
For more information on procurement in the pharma industry, pharma procurement, procurement process in the pharma industry, and indirect spends:
- Regulatory Framework Guiding the Pharmaceutical Packaging Industry
- E-Sourcing: An Essential Component in Devising a Good Sourcing Strategy
- Tail Spend Management and Why Your Business Needs It