In today’s global economy, operating on an international scale are increasingly vulnerable to supply chain disruption. Global events such as wars, pandemics and shortages can all have a profound impact on industry.
The pharmaceutical industry is particularly at risk owing to its extensive and international operations. From API manufacturing to formulation, packaging and distribution, there can be disruptions at a number of stages in the supply chain, such as personnel, material, service and equipment shortages.
In recent years, a number of geopolitical, environmental and economic events have occurred worldwide — many of which have put notable strain on the pharmaceutical supply chain. A number of conflicts and trade wars have been occurring during recent years, and the pharma industry is definitely feeling the effects of these happenings.
The COVID-19 pandemic was an example that opened the eyes of many pharmaceutical industry players, as it reinforced how such events can impact the supply chain, and how companies need to be prepared for sudden changes in demand. During the pandemic, the pharmaceutical industry faced disruptions at manufacturing sites caused by a number of problems, which were then further exacerbated by the political instability in some key regions in drug manufacturing globally.
Anything that impacts the production and supply of APIs will cause serious ... availability issues
API manufacturers in the supply chain
The pharmaceutical supply chain is extensive and involves many players from a range of specialisms, meaning there is ample opportunity for things to go wrong. Active Pharmaceutical Ingredients (APIs) — the primary components that give drugs their therapeutic effect — play a vital part in the pharmaceutical supply chain. Anything that impacts the production and supply of these ingredients will cause serious issues related to the availability of essential medicines.
The demand for chemically synthesised peptides has surged recently; this can largely be attributed to the expansion of the use pf peptides as an API in therapeutics for mainstream diseases. Clinical trials also begun to favour chemical synthesis and more patient-centric dosage forms such as nasal or oral formulations, rather than injectables.
This significant increase in demand means there needs to be a larger material supply. This trend can be seen in the peptide and oligonucleotide industries, with 80 approved peptides and 18 oligonucleotides given the green light already — this was made possible by a tried and tested, robust supply chain.
From materials to medication
At API manufacturing companies, the supply chain begins at the API level, where upstream chemicals are sourced internationally. These are needed for the chemical synthesis steps that come with the manufacture of peptide and oligonucleotide APIs. 
After the production of such therapeutic ingredients, the APIs are either distributed to the customers or directly to a formulation site, where ingredients from across the globe are combined to produce the finished dose product. The product must then be packaged using globally-sourced materials like aluminium and plastics. This process generally takes place as near to the company’s market as possible or is consolidated, depending on the business’ structure.
Maintaining consistency amidst uncertainty
For companies to prepare themselves for the threats present in the global pharmaceutical supply chain, businesses must have various strategies to ensure that medications will be able to reach users that need them, even in times of adversity. Key steps to ensuring supply chain resilience include:
- Maintaining strategic stock levels
- Validating transportation routes
- Dealing with secondary and tertiary suppliers for key starting materials
An effective supply chain requires resilience across every aspect of the process, whether ecological, societal, organisational or psychological. This requires businesses to be adaptable in pressured situations despite ambiguity or adversity in order to turn supply chain weaknesses into a strength.
Resilience can be underpinned by four pillars:
Visibility
Full supply chain visibility refers to not just your processes, people and technology, but also your suppliers and even their suppliers. It also includes the origin of materials from service providers. Comprehensive visibility is vital for operational efficiency.
A few ways in which companies can increase supply chain visibility are:
- Risk management: This allows the identification and management of risks, which can be done through an annual deep-dive from a demand, supply and manufacturing perspective
- Business continuity management: Prepares teams mentally and logistically for ‘what if’ scenarios, including safety stock levels, transportation route validation and dealing with secondary and tertiary suppliers for key starting materials
- Stringent emergency management systems: Allows the team to respond effectively to incidents.
Flexibility
Flexibility is another crucial aspect to ensure supply chain stability in the face of disruption. Not being limited to organisational agility, flexibility also includes the adaptability and intuition of employees. Personnel must be versatile in adopting novel methods, recognising issues and integrating problem-solving skills into their daily routines. 
Pascal Degen - Vice President of Global Supply Chain Management, Bachem
Flexibility in thought processes and technology is equally important to maintain resilience in a dynamic environment, which must be initiated from a top-down perspective. Flexibility can often be achieved through a lean management philosophy, which can be implemented across the organisation.
Collaboration
Industry collaborations can provide the framework for organisational structure, while also extending beyond internal operations to encompass external partnerships. However, it must begin within the company, fostering a shared language and understanding to facilitate cooperation.
People in leadership positions play a key role in establishing a structure that promotes cooperation in their business. A common understanding of language, work content and market objectives is the cornerstone of global alignment, enabling people and organisations to evolve together.
Control
Maintaining oversight of processes and personnel is essential for predicting and managing outcomes. When a company responds quickly to a disruptive factor, it can often be transformed into an opportunity. Many businesses put processes and KPIs in place to measure early indicators of instability, allowing them to act quickly to an incoming challenge.
Global ERP systems can facilitate this control across internal and international networks. Effective control procedures will also involve weekly and monthly measurements to maintain accurate data, helping to continuously improve performance and maintain timely visibility and control over the supply chain.
Delivering on commitments to customer and patient
For companies in the pharmaceutical industry, it’s essential to champion supply chain resilience in today’s interconnected world. Understanding the risks associated with your businesses operations, while also fostering transparency and integrating supply chain risk management can allow businesses to stay ahead of the curve and preempt any challenges that might crop up.
Global events can strongly impact drug supply continuity, and it is the duty of pharmaceutical companies to ensure their supply chains are robust enough to ensure a consistent supply is available to patients.
