Pharmaceutical supply chains must go back to basics – report

28 April 2015

Pharmaceutical supply chains need to go back to core principles and re-engage with the customer, according to a study.

A report from consultancy Crimson & Co pinpoints a trend towards “supply chain abstraction” where globalisation, a changing customer base and the constant pressure for innovation have made pharma supply chains increasingly complex. These organisations have become abstracted, moving away from the customer, the research concludes.

The report, Pursuing excellence: the reassertion of the customer, says that the “doers” in an organisation - people who are developing, making, selling or moving - are continually becoming marginalised. Programme management and complex organisational structures are also consuming excessive amounts of management time.

The report outlines changes needed to restore a better customer-producer relationship. This includes re-energising and re-empowering the layer of the business closest to the real customer.

It calls for reasserting the importance of content rather than process as a core management focus. The consultancy also suggests re-evaluating the project portfolio, after a recent study showed that 95 per cent of all project time was spent simply coordinating activities. Finally, the report calls for more development of employee and organisational skills that move away from an obsessive focus on functional skills to one that embraces the customer.

The consultancy warns that reversing this trend of the over-abstraction of the supply chains will not be simple.

The report says: “This thinking represents a close to 180 degree shift from the direction of travel for many global supply chains. It will be painful. But it is our belief that the current abstract supply chains are almost impossible to manage and develop and, most importantly, they fail in the fundamental task of ‘doing business’.”

Kerry Pickstone, head of life sciences at Crimson & Co, said: “Over the next five years, excellent pharmaceutical supply chains will be those who stand up and stop the trend. They will focus on getting closer to the customer and their own colleagues, doing the fundamentals right, while taking an end-to-end view of the supply chain.”

Pickstone concluded: “Firms should be looking to implement a simpler, more coherent and profitable way forward, even if it reduces the overall economies of scale that appear available from centralisation, integration and coordination. Ultimately, it’s time to go back and put the customer again at the heart of the business.”

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