Herculean Tasks for the Pharmaceutical Sector

By Alessandra Giovanelli & Sonja Telscher

2020 revolutionized the pharmaceutical sector: Topics such as smart packaging, rapid logistics and sustainability turned the industry upside down and are having far-reaching effects on the supply chain processes of manufacturers, suppliers and distributors.

While the pandemic led to operations in many industries coming to a worldwide standstill at the beginning of March 2020, the health and pharmaceuticals industries experienced exponential growth. Production facilities went into overdrive, producing vast quantities of hygiene articles and protective equipment that needed to be distributed to far-flung corners of the globe. Scientists in research laboratories could not work quickly enough to produce a new vaccine to be made available to as many people as possible at the same time in 2021.

It is not difficult to see that the demands on supply chain processes increased enormously as a result of these developments. At the same time, the level of complexity has also increased, as the rise in demand combined with the increase in pace necessitated the use of new technologies.

Logistik und Supply Chain Management

For centuries, the term “logistics” was exclusively associated with the flow of raw materials or finished products, and the focus was very much on the exchange between the manufacturer and the end customer. Nowadays, however, logistics incorporates a great many more aspects, such as the demand for synchronized processes, the issue of stockpiling, reliable sales planning and considerably shorter delivery times.

One key challenge faced by the pharmaceutical sector is how to ensure that sufficient quantities of the products are available for sale at all times, while avoiding overproduction, which leads to losses due to the rapid expiry cycles. In addition, storage and transport often place high demands on logistics, since factors such as cold chains, protection against moisture and sun exposure, batches and traceability have to be taken into consideration.  Tailored and timely production is therefore a basic requirement for the profitability of manufacturers and retailers.

Sustainability in the supply chain

The topic of sustainability has also long since reached the pharmaceutical sector, with human health and ecological integrity going hand in hand and even being mutually dependent. In terms of sustainability, it is not only the responsible use of raw materials and ingredients that is important, with “green IT” also playing a role. One example of this is the energy consumption in data centers. Consideration is of course also given to the classic sustainability topics, such as the consumption of raw materials and combustibles, recycling and avoidance of waste (lean).

One of the technologies that is available to assist with this Herculean task is the software from GIB, which is fully integrated into SAP. It makes the supply chain processes transparent and controllable from beginning to end – from an accurate sales forecast, which is not based solely on historical values but also takes account of external factors and plans, to precise material requirements and production planning, right through to cost-conscious inventory management. The GIB solutions make it easier to assess volatile and unstable markets, and ensure that waste and conflicting goals in the supply chain process are visible, thus making overproduction or a “stab in the dark” approach a thing of the past. Communication between different areas is also strengthened and processes are streamlined, thereby significantly reducing the throughput time in the value chain. This results in greater flexibility thanks to better planning, and satisfied customers thanks to an increased delivery service level. Excellent all-round support for an extremely demanding sector.