Outsourcing key to pharmaceutical supply chain success

3 September 2010

3 September 2010 | Lindsay Clark

The pharmaceuticals industry is becoming increasingly likely to outsource supply chain and distribution operations, according to research from Accenture.

In a survey of more than 240 ‘global fulfilment executives’, comprised of those in all areas of supply chain and logistics in the life sciences sector, 65 per cent expected to outsource the function on a global basis in the future. This contrasts with 70 per cent of firms in the sector having in-house and local supply chain departments in 2008.

The consultancy also found the quarter of firms in the sector with the best performing supply chains were twice as likely to outsource as those in the worst performing quarter. Among these best performers, 67 per cent outsourced transport and planning management, 58 per cent warehouse management, 55 per cent outsourced their network strategy and 39 per cent outsourced order management.

Kay Formanek, senior executive, director of life sciences Europe, Africa and Latin America at Accenture, said the top performers were meticulous in their approach to outsourcing. “They can be highlighted for the way that they are methodical in getting value from outsourcing. They are very careful in articulating the business objectives.”

For example, outsourcing to a third-party logistics provider meant the supplier became a fundamental part of one client’s business, she said. “This makes [top performers] very focused on the cultural fit.”

Choosing the right indicators to measure performance was also essential to success. “Often we see that the metrics say one thing - the balanced score card is green - but people using the service are dissatisfied,” she added.

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