How do Procurement Strategies Improve Efficiency in the Pharma Industry?
The role of procurement and sourcing has become inevitable and essential to companies across industries, and as urbanization, globalization, and emerging markets influence dynamics, companies are encouraged to increasingly leverage effective, efficient, and unparalleled procurement strategies. A well-planned, data-driven, and efficient procurement strategy can help companies reduce costs, overcome industry risks, maintain a competitive edge, and gain in-depth insights into the evolving market. As demand for the pharma industry drastically rises, and consumer demands, awareness, and preferences evolve, companies require clear, insightful, and reliable strategies to stay ahead of the curve. Well-drafted procurement strategies can help companies stay ahead of competitors while improving internal operations, developing robust relationships, increasing data accuracy and application, minimizing major challenges and risks, and finding cost-effective alternatives to any changes required. The pharma industry is entering a new and transformative era of consumer-centricity; however, it is equally crucial for companies to invest time, labor, and capital in creating and implementing impeccable procurement strategies.
What are 5 Key Procurement Strategies that Help Pharma Industry Players?
Supplier Optimization: The valuable support, collaborative strategies, and strategic congruence provided by transparent, positive, and robust business relationships is often undermined, and the benefits easily overlooked. A strong supplier relationship can lead to reduced costs, high-quality offerings, improved lead times, high efficiency and profitability, and robust strategies. Utilizing data, technology, and analytics can help companies track and evaluate performance, compliance rates, quality, and strategic alignment, to improve, optimize, and maintain positive supplier relationships between both parties. In doing so, companies encourage transparency, cost-effectiveness, trustworthy negotiations, and sustainable partnerships.
Risk Management: Every market faces fluctuating dynamics, changing trends, and rising industry risks and companies require data-driven strategies, robust processes, and efficiency to keep pace, overcome challenges, and minimize potential negative impact. Well-developed procurement strategies include developing a comprehensive risk identification, evaluation, and management process. By creating a strong risk management team or process, companies can significantly minimize impact, mitigate minor risks, and save the business from major losses, customer attrition, or other potential challenges. Risk management has become increasingly crucial as industries rapidly evolve, competition rises, and costs fluctuate, making it imperative for companies to stay ahead of the curve.
Low-Cost Country Sourcing: Globalization, urbanization, and emerging markets have evolved the way developed and developing countries interact with industry, services, and procurement. Low-cost country sourcing has become a major contributor to reduced costs, higher production values, improved product quality, and faster speed-to-market. This falls among the most widely leveraged procurement strategies and encourages companies to leverage the offerings of suppliers in various geographical locations and low-cost countries with lower labor wages, reduced production costs, and high efficiency. LCCs often have more lax and inexpensive government policies, making export and customs more affordable, as well as providing companies in developed countries with the opportunity to choose best-fit suppliers from a wide range of choices.
Centralizing Data: The role of data, analytics, and information has become increasingly valuable as companies continue to shift toward technology-driven systems, aim to improve efficiency, and sought to reduce costs. Data enables efficiency, and centralizing data provides companies with the opportunity to easily access, distribute, filter, evaluate, and leverage the value that it provides. A robust and centralized data system can provide companies with the ability to track spend, minimize errors, evaluate departmental performance, evaluate supplier compliance rates and quality of service, and make real-time data-driven changes. It also helps improve the efficiency, viability, and applicability of various procurement strategies.
Leveraging Analytics: While data helps companies track the present, analyze past trends, and improve performance for better results, it is equally crucial for companies to closely assess the available information, and leverage analytics to develop informed future decisions. Data analytics, particularly predictive analytics, can help companies assess trends, upcoming market fluctuations, previous patterns, and develop comprehensive preemptive strategies that minimize risk, increase efficiency, and significantly reduce potential challenges. When coupled with other robust procurement strategies, this process can help companies foresee potential challenges, study patterns, and provide unparalleled, novel, and effective operational changes.
The pharmaceutical industry has witnessed a dramatic shift over recent years, with increasing emphasis on patient journey, rising prevalence of chronic diseases, and a significant increase in consumer awareness regarding medical needs and expectations. These major changes, accompanied by the overwhelming demand for consumer-centric service led to various challenges for a growing pharmaceutical company in South Europe. Unable to identify their shortcomings, and struggling to control the rate of decline in sales, efficiency, and profitability, the company chose to partner with SpendEdge, and leverage our expertise in developing and improving procurement strategies. With a detailed study of the company’s supply chain, our experts identified increased focus on customer-centricity had led to a lapse in efficiency, communication, and supplier management. Additionally, the company was unable to accurately track and leverage data and analytics present in their system due to the fragmented nature of their supply chain. The experts helped the company identify, assess, and understand these shortcomings, and provided actionable recommendations regarding the development and implementation of robust procurement strategies. By adhering to the provided insights, the company significantly minimized losses, gained their market share, and improved performance substantially, while reestablishing themselves as a key competitor for industry leaders.