Effective Supply Chain Management for Drugstores

Supply chain is a system of organizations, people, activities, information, and resources involved in the movement of products or services from suppliers to customers. It encompasses everything from sourcing raw materials to manufacturing, distribution, and delivery to end customers.

An effective supply chain is crucial for the success of a drugstore. It ensures that the right products are available to customers at the right time and at the right price, which can lead to increased customer satisfaction and loyalty. A well-managed supply chain also helps to minimize inventory costs, reduce waste, and optimize the use of resources, which can lead to increased profitability for the drugstore. Additionally, a reliable and efficient supply chain is essential for ensuring that the drugstore can meet the needs of its customers and compete effectively in the marketplace.

Planning the Supply Chain

A. Determining the right mix of products: To determine the right mix of products, a drugstore should consider factors such as customer demand, product availability, and profitability. This can be achieved by analyzing sales data, monitoring market trends, and conducting customer surveys. By understanding what products customers want and need, a drugstore can ensure that it is stocking the right products and avoiding excess inventory.

B. Choosing suppliers and managing relationships: Choosing the right suppliers is crucial for ensuring a reliable and efficient supply chain. A drugstore should consider factors such as supplier reliability, pricing, quality, and delivery times when selecting suppliers. Once suppliers have been selected, it is important to maintain strong relationships with them by communicating regularly, resolving issues promptly, and working collaboratively to address challenges.

C. Forecasting demand: Accurately forecasting demand is key to ensuring that a drugstore has the right inventory levels and can meet customer needs. Demand forecasting can be achieved through a variety of methods, including analyzing historical sales data, monitoring market trends, and using predictive analytics tools. By forecasting demand, a drugstore can ensure that it is stocking the right products in the right quantities and avoiding stockouts or excess inventory.

D. Developing contingency plans: Developing contingency plans is important for minimizing the impact of unexpected events on the supply chain. Contingency plans may include identifying alternative suppliers, establishing safety stock levels, or implementing emergency response procedures. By having contingency plans in place, a drugstore can minimize disruptions and ensure continuity of operations in the event of unexpected events such as natural disasters or supply chain disruptions.

Managing Inventory

A. Setting inventory levels: Setting inventory levels involves determining the appropriate amount of stock to keep on hand to meet customer demand while minimizing excess inventory. This can be achieved by considering factors such as demand variability, lead times, and order quantities. By setting appropriate inventory levels, a drugstore can ensure that it is able to meet customer demand while minimizing inventory carrying costs.

B. Establishing reorder points: Establishing reorder points involves determining the minimum level of inventory at which an order should be placed to avoid stockouts. This can be achieved by considering factors such as lead times and demand variability. By establishing reorder points, a drugstore can ensure that it is able to maintain appropriate inventory levels and avoid stockouts.

C. Implementing just-in-time inventory: Implementing just-in-time inventory involves keeping inventory levels as low as possible while still ensuring that the right products are available to customers when they are needed. This can be achieved by using demand forecasting and having strong relationships with suppliers to ensure timely delivery of products as they are needed. By implementing just-in-time inventory, a drugstore can reduce inventory carrying costs and improve efficiency.

D. Monitoring stock levels and adjusting as necessary: Monitoring stock levels involves regularly reviewing inventory levels and making adjustments as necessary. This can be achieved by using inventory management software and monitoring sales data. By monitoring stock levels, a drugstore can identify potential issues such as excess inventory or stockouts and adjust ensure that inventory levels remain appropriate.

Ensuring Efficient Transportation

A. Choosing the right transportation modes: Choosing the right transportation modes involves selecting the most appropriate methods of transportation for the products being delivered. This can be achieved by considering factors such as product weight and size, delivery times, and cost. By choosing the right transportation modes, a drugstore can ensure that products are delivered efficiently and cost-effectively.

B. Optimizing delivery routes: Optimizing delivery routes involves identifying the most efficient routes for product deliveries. This can be achieved by using geographic information system (GIS) software to map delivery routes and optimize routes based on factors such as traffic patterns, delivery times, and customer locations. By optimizing delivery routes, a drugstore can reduce transportation costs and improve delivery times.

C. Managing transportation costs: Managing transportation costs involves minimizing the cost of transporting products while maintaining delivery times and quality. This can be achieved by negotiating favorable rates with transportation providers, consolidating shipments, and optimizing delivery routes. By managing transportation costs, a drugstore can improve profitability and competitiveness.

D. Ensuring on-time delivery: Ensuring on-time delivery involves ensuring that products are delivered to customers on time and in good condition. This can be achieved by using tracking and monitoring software to monitor the progress of deliveries, communicating regularly with customers, and working with transportation providers to address any issues that arise. By ensuring on-time delivery, a drugstore can improve customer satisfaction and loyalty.

Utilizing Technology

A. Implementing inventory management software: Implementing inventory management software can help a drugstore manage inventory levels more effectively by automating processes such as stock level tracking, reorder point calculation, and purchase order creation. By implementing inventory management software, a drugstore can reduce inventory carrying costs, improve accuracy, and increase efficiency.

B. Utilizing data analytics for demand forecasting and inventory optimization: Utilizing data analytics involves using historical sales data and other relevant data to analyze trends and patterns to predict future demand and optimize inventory levels. By utilizing data analytics, a drugstore can improve accuracy in forecasting demand, optimize inventory levels, and reduce the risk of stockouts.

C. Implementing electronic data interchange for efficient communication with suppliers: Implementing electronic data interchange (EDI) involves using technology to facilitate communication between a drugstore and its suppliers. EDI can streamline processes such as purchase order creation, invoice processing, and shipment tracking, resulting in faster, more efficient communication and reduced errors.

D. Utilizing barcode scanning and RFID technology for tracking inventory: Utilizing barcode scanning and RFID (Radio Frequency Identification) technology involves using technology to track inventory throughout the supply chain. This can be achieved by placing barcodes or RFID tags on products and using scanners to track their movement. By utilizing barcode scanning and RFID technology, a drugstore can improve accuracy, reduce errors, and increase efficiency in tracking inventory.

Establishing a Risk Management Plan

A. Identifying potential risks to the supply chain: Identifying potential risks involves analyzing the supply chain and identifying potential disruptions that could impact operations. This can be achieved by considering factors such as supplier reliability, natural disasters, and geopolitical risks. By identifying potential risks, a drugstore can develop contingency plans to minimize the impact of disruptions.

B. Developing contingency plans for potential disruptions: Developing contingency plans involves preparing for potential disruptions by developing plans to minimize the impact of disruptions. This can be achieved by having backup suppliers, developing plans for alternative transportation routes, and maintaining safety stock levels. By developing contingency plans, a drugstore can minimize the impact of disruptions and maintain business continuity.

C. Establishing business continuity plans: Establishing business continuity plans involves developing plans to ensure that operations can continue in the event of a disruption. This can be achieved by developing plans for backup suppliers, implementing redundant systems, and cross-training staff. By establishing business continuity plans, a drugstore can minimize the impact of disruptions and ensure that operations can continue.

D. Conducting regular risk assessments and updating plans as necessary: Conducting regular risk assessments involves regularly reviewing the supply chain and identifying new risks as they arise. Plans should be updated as necessary to reflect changes in the supply chain or potential risks. By conducting regular risk assessments and updating plans, a drugstore can ensure that it is prepared for potential disruptions and can respond effectively to changes in the supply chain.

Conclusion

Effective supply chain management is critical for the success of a drugstore. This includes planning the supply chain, managing inventory, ensuring efficient transportation, utilizing technology, and establishing a risk management plan.

Effective supply chain management requires continuous improvement to adapt to changes in the market and the supply chain. This requires ongoing monitoring, analysis, and adjustment to ensure that operations remain efficient and effective.

Call to action for drugstores to prioritize effective supply chain management: Given the importance of effective supply chain management, drugstores must prioritize this aspect of their business to ensure success. This requires a commitment to ongoing improvement and investment in the necessary resources to manage the supply chain effectively.

Global Pharmaceutical Logistics Market Analysis and Forecast 2028

As per a report distributed by Grand View Research, the pharmaceutical logistics market is growing rapidly due to the increasing demand for a variety of medications driven by chronic and lifestyle-related diseases.

The global pharmaceutical logistics market size is expected to reach USD 138.9 billion by 2028, registering a CAGR of 8.5%. The growth is attributed to the rising demand for medications, the increased need for cold-chain and non-cold-chain logistics, and the impact of COVID-19 across the globe. During the pandemic, governments worldwide focused on preventing and treating patients, further driving the market growth.

The import and export of various COVID-19 treatments have surged, especially between countries like the U.S. and China. Furthermore, national logistics systems are under strain due to the heightened demand from hospitals and healthcare institutions. Regulatory authorities, such as the U.S. FDA, have approved emergency use of COVID-19 vaccines, which has increased global trade in pharmaceuticals.

Pharmaceutical Logistics Market Trends and Insights

Pharmaceutical logistics is a crucial part of the healthcare system, ensuring the safe handling and transportation of sensitive products. The equipment and services required in the pharmaceutical supply chain are highly costly. Collaborations between pharmaceutical companies to expand their reach are a rising trend in the industry.

Technological advancements, including cloud-based supply chain systems and blockchain, offer real-time data visibility and predictive analytics, allowing for improved supply chain optimization and risk management. These innovations also enhance operational efficiency, productivity, and company processes.

The U.S. led the market in 2020, and it is expected to maintain its dominance throughout the forecast period. The Asia Pacific region is projected to witness the highest CAGR due to increasing healthcare spending in emerging economies. Additionally, consumer spending on over-the-counter (OTC) pharmaceutical products is expected to boost market growth in this region.

Pharmaceutical Logistics Market Report Highlights

• Governments worldwide are focusing on ensuring adequate medicinal supplies for patients amid the pandemic, increasing cross-border pharmaceutical trade.
• Companies like Moderna, Serum Institute, and Pfizer have successfully completed COVID-19 vaccine trials, increasing demand for logistics services to distribute these vaccines.
• Cold-chain logistics services are expected to grow rapidly due to the rising adoption of temperature-sensitive drug products worldwide.
• Third-party logistics (3PL) services are gaining traction, providing integrated warehousing and transportation on an outsourced basis.
• Technological advancements in monitoring components such as RFID devices, telematics, and real-time shipment tracking are expected to grow significantly over the forecast period.
• Automation of refrigerated warehouses, using cloud technology, robots, conveyor belts, and energy management, is driving the market forward.

Pharmaceutical Logistics Market Segmentation

By Type (Revenue, USD Billion, 2017 - 2028)

• Cold Chain Logistics
• Non-cold Chain Logistics

By Component (Revenue, USD Billion, 2017 - 2028)

• Warehousing
• Refrigerated Container
• Transportation (Sea Freight, Airfreight, Overland Logistics)
• Monitoring Components (RFID Devices, Telematics, Networking Devices, Software)

Regional Outlook (Revenue, USD Billion, 2017 - 2028)

• North America
• Europe
• Asia Pacific
• South America
• Middle East and Africa (MEA)

Key Players in the Pharmaceutical Logistics Market

• Agility
• Air Canada
• CEVA Logistics
• DB Schenker
• Deutsche Post AG
• FedEx
• LifeConEx
• Marken
• United Parcel Service of America, Inc.
• VersaCold Logistics Services

Global Vaccine Disparities

Despite promises from many nations to provide vaccines to countries in need, vaccination disparities between wealthy and low-income nations remain stark. A key contributing factor has been identified by analysts.

COVID-19 has tested public health systems, and many have responded as expected. However, the vaccination rates differ significantly worldwide. According to the Our World in Data project at the University of Oxford, approximately 75% of distributed COVID-19 vaccines have been administered in wealthy countries, while only 0.6% of doses have gone to low-income countries, as reported by the New York Times.

On Wednesday, Secretary of State Antony Blinken called on wealthy nations, pharmaceutical companies, and international institutions to "step up" and address global vaccine inequality. "How is it that vaccination rates in the United States and Europe are around 60%, while in Africa, it is under 14%?" Blinken asked. "It's not just wrong; it's a huge problem."

Blinken praised the life-saving innovation of vaccine manufacturers like Johnson & Johnson (J&J), Moderna, and Pfizer-BioNTech but criticized the inequitable distribution of doses. "When it comes to distribution, involving various actors—governments, companies, international organizations—we have fallen short," Blinken said.

Blinken also argued that vaccine distribution could have been fairer if pharmaceutical companies had shared their intellectual property. However, Pfizer CEO Albert Bourla countered on Tuesday, saying that the unequal distribution wasn't the company's fault, pointing out that doses were made available to all countries but wealthier nations placed orders faster.

US Commitment to Global Vaccine Donation

The United States has pledged to donate at least 1.1 billion doses to low-income countries by 2023. So far, the U.S. has delivered 216.5 million doses globally, with 18 million doses yet to be delivered and 865.5 million remaining doses pledged to low-income countries, according to the Kaiser Family Foundation (KFF).

Of the doses delivered, 141 million have gone to lower-middle-income countries, 46.9 million to upper-middle-income countries, 21.4 million to low-income countries, and 7.3 million to high-income countries. KFF reports that 46% of the delivered doses were Pfizer-BioNTech, 31% were Moderna, 16% were Janssen Pharmaceuticals (a division of J&J), 2% were AstraZeneca, and 5% were unknown.

The Global Covid-19 Access Tracker

Blinken announced the launch of the Global Covid-19 Access Tracker, which aggregates global data on vaccine and ICU rates. He also revealed that the U.S. and J&J had reached an agreement to deliver additional vaccine doses to "conflict zones."

"We must ensure that those who cannot be reached by government vaccination campaigns are not left behind," Blinken said. "They need to be protected too."

Challenges to Equitable Vaccine Distribution

Despite donation commitments from the U.S. and other wealthy nations, research firm Airfinity identified another reason for global vaccine inequality: Wealthy nations appear to be purchasing more COVID-19 vaccine doses than they are using.

While countries and pharmaceutical companies have not disclosed the details of their vaccine purchase contracts, Airfinity compared wealthy nations' COVID-19 vaccine production numbers with the number of vaccines they have used.

Rich countries like Canada, Japan, the United Kingdom, the United States, and European Union members have produced significantly more doses than they have used. According to Airfinity, between one-third and one-half of these countries' vaccines are going unused, with some nearing expiration, as reported by NPR's "Goats and Soda."

The World Health Organization (WHO) previously called for countries to delay administering booster shots until at least 10% of every country's population was vaccinated. However, the stockpile in wealthy countries is expected to continue growing into next year, even after accounting for booster doses and child vaccinations.

By the end of this year, the surplus is projected to reach 1.2 billion doses. Nonetheless, Airfinity's CEO noted that about 600 million doses will be donated to other countries, with around 300 million coming from the United States.

The Road Ahead

Notably, Airfinity reported that this stockpile would have been sufficient to meet the WHO's goal of vaccinating at least 40% of the population in lower-income countries—a goal that is becoming "increasingly unlikely" to be met.

Biopharma Supply Chains and the Impact of COVID-19

The supply chain is a critical function in the highly regulated biopharma industry. Prior to the pandemic, there was a tendency to operate slowly and reactively due to the risks associated with drug distribution. However, in March 2020, the industry's standard practices were no longer sufficient.

Challenges Faced by the Biopharma Industry

As COVID-19 spread, upstream partners faced shortages of key ingredients and active pharmaceutical ingredients (APIs), while downstream supply chains and their commercial development teams struggled with restricted access to healthcare provider offices.

Additionally, research and development teams had to pivot towards remote clinical trials, a concept that had shown promise but was slow to gain widespread adoption.

Over-Reliance on Foreign APIs

One of the earliest supply chain issues revealed during the pandemic was the U.S.'s heavy reliance on APIs produced in other countries. According to the FDA's Center for Drug Evaluation and Research, over 70% of API manufacturers were based outside the U.S., with major sources in the EU, India, and China.

Go Time for Digital Enablers

The pandemic also pushed supply chain providers to enhance their tracking and transparency capabilities, making it an ideal time for the implementation of track-and-trace technologies and IoT solutions. This aligns with the 2023 deadline for Phase II of the Drug Supply Chain Security Act (DSCSA), which requires full unit-level traceability within the entire pharmaceutical supply chain.

Telemedicine and Supply Chain Adaptation

The shift towards telemedicine, driven by the pandemic, set the stage for new care delivery models, such as home-based healthcare and same-day prescription deliveries. This rapid adoption of digital healthcare created new workflows and opportunities for providers and patients alike.

Strengthening Supply Chains Post-COVID

Today, vaccines are more accessible worldwide, and new treatments for COVID-19 are in development. While the pandemic exposed weaknesses in the biopharma supply chain, the industry has rebounded, becoming more resilient and prepared for future crises.

© 2024 Biopharma Insights. All rights reserved.

Spimaco's Pharmaceutical Warehouse Automation Success

To look at it today, you'd never guess that Spimaco's gleaming pharmaceutical production and storage facility in Qassim, Saudi Arabia, was once its biggest obstacle to growth. But that was indeed the case. Just some years back, the power was a cramped, manual operation that was struggling to stay pace with the company's daily throughput needs never mind provide room to grow.

For company leaders, those constraints were fast becoming a cause for concern. That concern eventually led to the choice to give the facility, which was inbuilt 1988, a much-needed makeover and convey it into the 21st century. Spimaco tapped Germany-based Lödige Industries, a manufacturer of fabric handling solutions, for the work of modernizing the operation. After some consultation, the partners chose the automation and expansion route: that's, they decided to reinforce the existing facility with the addition of an automated high-bay distribution and storage center.

OLD VS. NEW

The first step for the Lödige team was to conduct a detailed analysis of Spimaco's existing infrastructure and processes in order to determine what equipment and systems would best meet its future needs. Acting as a general contractor for the installation, Lödige then designed and implemented new handling and fulfillment systems incorporating solutions from different suppliers into one custom-made system where necessary.

The results of its efforts are a new state-of-the-art warehouse that allows for palletizing, picking, automated storage and retrieval, and therefore the dispatch of pharmaceutical goods in full compliance with pharmaceutical regulations. Among other upgrades, the power features more than 5,000 storage spaces, several hundred meters of conveyors for cases and pallets, two palletizing robots, and over 30 automated shuttle vehicles.

To make sure the new facility ran smoothly across all production lines during the initial period of operation, Lödige maintained operational management of the power and provided "resident maintenance" services as well.

A MULTITUDE OF BENEFITS

The results of the project are impressive. With the new automated systems in situ, Spimaco has almost doubled its throughput rates for handling finished goods. additionally, the upgrade has given the corporate full inventory control and high-quality track and trace programs, while improving its ability to handle extremely delicate products governed by strict industry rules and regulations.

In the ongoing Covid-19 pandemic, having a highly capable infrastructure has helped the corporate to grow and prosper. "Our old distribution center was starting to limit our capabilities. But now with the new facility, we've modernized the existing systems, and our potential for growth has become unlimited," said, chief military officer of Spimaco, during a statement. "Since pharmaceutical products are very sensitive, it had been important to have a highly reliable solution.

Smart Warehouse Technology Solutions

Customers today expect things quickly, and 69% of them would be more likely to purchase online if they had access to one-day shipping. However, 77% of warehouses struggle to meet same-day delivery. Finding ways to accelerate the supply chain and maximize efficiency is critical to meet changing customer expectations and for suppliers to remain competitive. The need for speed, accuracy, and efficiency is a priority, with 80% of operational leaders agreeing that new technology is needed for work advancement to achieve this. The warehouse is at the center of any producer or distributor's supply chain, so implementing a smart warehouse system is an effective way to streamline processes, maintain control, and keep up with the competition.

Redesigning Legacy Cycles and Technology

Many warehouse processes are labor-intensive and inefficient, with some organizations still relying on pen-and-paper processes or outdated technology. This can lead to errors in order handling, stock management, shipping delays, and resource wastage. In a recent survey of 1,403 IT and operational leaders, 77% agreed they needed to upgrade their warehouse technology but admitted they were slow to do so. While some have introduced new technologies to accelerate processes, an incomplete smart warehouse solution will result in technical fragmentation. A fully integrated smart warehouse solution can increase efficiency, accuracy, and reduce costs in time, money, and resources, as well as leverage data to help shape future strategies.

Integrating a Smart Warehouse Management System

An effective Warehouse Management System (WMS) is a vital record that manages everything from goods to assets to people, through to transactions and shipping. By 2024, 90% of operational leaders plan to introduce a WMS to modernize work planning and management. A successful WMS also helps support a well-trained workforce, integrate automation, and generate useful data for decision-making. It can also create an essential link between the warehouse and transportation.

Introducing Smart Technology in the Warehouse

It is now possible to integrate smart technology at every stage of the warehouse process, from goods in, stock management, to picking, packing, and shipping. A recent study showed that 94% of repetitive tasks were performed with human input, but 75% plan to improve workforce performance by equipping them with purpose-built technologies to increase efficiency, accuracy, and reduce downtime. From wearable scanners, mobile and vehicle-mounted computers, to smart labeling and voice-directed picking solutions, a connected smart warehouse can streamline workflows and support quick turnaround.

Automation in the Warehouse

Automation and new technologies are essential for warehouse operators to remain competitive. Over 75% of leaders plan to equip the workforce with smart technology to introduce automation in the warehouse. Many are investing in devices such as smart watches, mobile printers, wearable computers, and smart glasses. Voice-integrated picking devices, which can increase efficiency by 15-30%, are now being incorporated into processes.

A Smart Workforce for a Smart Warehouse

Equipping the workforce with smart technologies not only increases productivity but can also help retain key talent. As of 2020, half of the workforce comprised millennials, a generation that grew up with tablets and smartphones and expects a digital work environment. Using outdated technologies and pen-and-paper processes will not appeal to this workforce. A smart warehouse will attract a smart workforce and enable companies to retain key talent. Additionally, smart solutions can make repetitive tasks less tedious and more fulfilling, improving worker satisfaction. Voice-Directed Picking (VDP) solutions, for example, allow workers to perform tasks naturally while reducing cycle times. New lightweight wearable technology can also reduce muscle strain compared to older handheld devices.

How to Integrate Smart Working

Talk to our team about our range of cutting-edge technologies to keep your warehouse and supply chain moving. Whether it's a mobile computer, scanner, printer, or wearable technology, we have solutions to complement your strategy.