As an important basis of global healthcare, this field of supply chain management facesunique challenges in ensuring the uninterrupted production and distribution of life-savingdrugs and
THEORETICAL FRAMEWORK
Supply chain
A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request The supply chain includes not only the manufacturers and suppliers, but also transporters, warehouses, retailers, and even customers themselves” (Chopra & Meindl,
2016) It outlines every step of the production process, including the tasks performed at each stage, the information being shared, the natural resources being converted into useful materials, the usage of human resources, and any other elements that go into the final good or service.
One of the crucial elements in doing an external analysis in a process of strategic planning is mapping out a supply chain A corporation may better define its own market and decide where it wants to go in the future by clearly setting out the supply chain A company must frequently decide whether to operate a single line of business or enter into other related or unrelated industries when formulating corporate-level plans Therefore, it is clear that the supply chain serves a crucial purpose for every firm Additionally, supply chains help to improve the quality of logistics operations by providing goods to customers and businesses as quickly as possible, guaranteeing their freshness, preventing price hikes, and controlling profits.
Pharmaceutical supply chain
1.2.1 Overview of the pharmaceutical supply chain:
A pharmaceutical supply chain is a series of different activities that take place in a pharmaceutical company, from production to distribution to delivering medicines and vaccines to consumers The pharmaceutical supply chain plays a critical role in ensuring that patients around the world have access to the necessary medications The pharmaceutical supply chain is undoubtedly a complicated procedure because of related regulations, safety, and high expenses.
The first significant phase in the pharmaceutical supply chain is pharmaceutical manufacture It involves the conversion of raw materials into finished medications The procedure entails locating premium raw materials, formulation, manufacture, quality control, and adherence to regulatory standards.
Pharmaceutical manufacturers use raw materials, cutting-edge technology, equipment, and supplies to generate various dosage forms of drugs, whether they are creating prescription-only medicines (POM) or over-the-counter (OTC) goods This includes pills, liquids, lotions, ointments, tablets, capsules, and aerosols This intricate process is made feasible by the materials, technology, and equipment, therefore any difficulty obtaining these things or maintaining the process would have a detrimental impact on the rest of the supply chain Depending on patient demand, pharmaceutical companies produce medicines and vaccines in various locations around the world Purchasing chemical components to create the medicines is another stage included in this process Pharmaceutical logistics are frequently used to convey the raw materials to the manufacturing site These services are essential at every stage.
Packaging is a key step throughout the pharmaceutical process Pharmaceutical packaging refers to the materials, designs, and systems that package, store, label, and help distribute the medications to their next destination Medications must be placed in packaging that meets strict regulations including those set by the Food and Drug Administration (FDA). Proper packaging ensures product integrity, protection from external factors, and compliance with labelling regulations for clear and accurate information.
Transportation, warehousing, and management of drugs across the supply chain are all included in distribution and logistics To ensure product quality and avoid supply chain disruptions, effective handling, security, and temperature control are crucial.
Wholesale distributors get medications, which they then distribute to retail pharmacies Wholesale distributors are essential to inventory control, order fulfilment, and on-time delivery to pharmacies.
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Dispensing pharmaceuticals to patients is the last step in the supply chain This could entail asking patients to purchase prescription drugs from doctors or pharmacies In other instances, customers can purchase over-the-counter drugs from pharmacies, grocery stores, department stores, and other retail establishments.
1.2.2 Roles of the supply chain in the pharmaceutical industry:
The supply chain plays a crucial role in the pharmaceutical industry, ensuring the efficient flow of medications and healthcare products from manufacturers to end-users
Procurement: The supply chain manages the procurement process by establishing relationships with suppliers, negotiating contracts, and sourcing materials and ingredients needed for drug manufacturing This includes managing the selection, evaluation, and qualification of suppliers to ensure the quality and reliability of the raw materials.
Inventory Management: Supply chain professionals monitor inventory levels of drugs, medical devices, and other healthcare products, ensuring that there is an adequate supply to meet market demand Effective inventory management helps prevent stockouts, minimize overstocking, and avoid expiring products, reducing costs and improving patient safety.
Manufacturing and Production Planning: Supply chain teams work closely with pharmaceutical manufacturers to develop production plans based on anticipated demand, regulatory requirements, and capacity constraints They optimize the production schedules to balance cost efficiencies, product quality, and timely delivery.
Quality Assurance and Compliance: The supply chain collaborates with regulatory bodies to ensure compliance with stringent quality standards and regulations throughout the distribution process This involves implementing quality control measures, conducting audits, and maintaining proper documentation to ensure the safety and efficacy of pharmaceutical products.
Warehousing and Distribution: The supply chain manages the physical storage and distribution of pharmaceutical products This includes selecting appropriate storage conditions (such as temperature-controlled environments for vaccines) to maintain product integrity, managing transportation logistics, and coordinating with third-party logistics providers to ensure timely delivery to hospitals, pharmacies, and other healthcare facilities.
Cold Chain Management: Many pharmaceutical products, such as vaccines and biologics, require strict temperature-controlled storage and transportation The supply chain ensures the integrity of these temperature-sensitive products by implementing cold chain management practices, monitoring temperature conditions, and using specialized packaging and transportation methods to maintain product efficacy.
1.2.3 Differences between supply chain and pharmaceutical supply chain:
A pharmaceutical supply chain is significantly different from a regular supply chain. The pharmaceutical supply chain is, to begin with, comparatively more complicated than a typical supply chain The pharmaceutical supply chain has a direct influence on human life and is governed by stringent compliance standards The safe and prompt distribution of generic medications, prescription meds, OTC (Over-the-Counter) medications, biologics, and many other items—each with unique handling and storage requirements and risks—is another duty of the pharmaceutical supply chain A pharmaceutical product encounters a variety of goals and limitations once it leaves the warehouse, which complicates the supply chain process.Pharmaceutical supply chains have to deal with multiple stakeholders It is not just the manufacturers and distributors but also government agencies, hospitals, and clinics, medical research organizations A regular supply chain, on the other hand, has much simpler norms. When compared to a regular supply chain, the complexity and cost of a pharmaceutical cold chain exponentially increase To maintain the quality of the medications and vaccines, the pharmaceutical cold chain must adhere to strict temperature regulations that are mandated by the authorities Vaccines, medications, and biologics that are temperature- sensitive deteriorate if pharmaceutical companies do not have adequate cold chain visibility It may jeopardize the pharmaceutical supply chain's commitment to quality compliance, putting patients' health at risk How a pharmaceutical supply chain is managed is determined by the compliance factor Operations in a regular supply chain are much more lax because there is less risk of product spoilage or temperature control As one must also deal with healthcare management organizations, insurance companies, etc., the complexity further escalates All this makes the job of a pharma supply chain or cold chain logistics professional even more challenging Pharmaceutical supply chain management is much more challenging than managing a regular supply chain.
A CASE STUDY OF PFIZER
Analysis of Pfizer’s supply chain
Pfizer has taken an active role in working closely with its suppliers The company collaborates with its suppliers, the Pharmaceutical Supply Chain Initiative (PSCI), and the Institute for Sustainable Communities (ISC) to identify synergistic opportunities to improve sustainability and EHS (Environment, Health, and Safety) performance
As part of its standard operations, Pfizer procures essential raw materials from suppliers across the globe Typically, these materials are readily available from multiple sources.10
To ensure that global suppliers of raw materials and products meet the requirements, Pfizer conducted onsite quality audits of close to 400 potential and existing suppliers across the world during 2008 Suppliers who do not meet Pfizer’s quality requirements are not permitted to enter or remain in the supply chain until they are able to fulfill the requirements.
In limited cases, Pfizer has located experienced quality professionals onsite who provide day- to-day support for a set period of time
(Source: Pfizer’s Report)The production of pharmaceutical products is highly dependent on the active pharmaceutical ingredients (APIs) utilized As such, the establishment of safe, secure, and reliable supply chains for these vital medicines is of paramount importance to the pharmaceutical industry To maintain a reputation for excellence and dependability on a global level, every enterprise involved in the expansive supply chain that caters to Pfizer and11
Group 12 its contract development and manufacturing organization (CDMO) Pfizer CentreOne must undergo a meticulous risk assessment and possess a proven track record of business continuity Pfizer CentreOne, situated in Kalamazoo, Michigan, offers drug developers a lower-risk profile both geographically and operationally With decades of experience in the reliable synthesis and delivery of commercial volumes of APIs to distinguished pharmaceutical companies, Pfizer CentreOne has become a highly trusted partner in the industry.
Active pharmaceutical ingredient (API) synthesis:
Pfizer's manufacturing process commences with the synthesis of Active Pharmaceutical Ingredients (APIs) This crucial step involves intensive research and development efforts. Pfizer's R&D teams work tirelessly to discover and optimize potential drug compounds Once promising APIs are identified, Pfizer employs advanced chemical processes to produce them on a large scale, together with procuring from the suppliers These processes may include complex organic chemistry techniques, crystallization, and purification methods Quality control is paramount at this stage to ensure the API's purity, stability, and consistency Pfizer's adherence to strict quality standards is foundational to the safety and efficacy of its pharmaceutical products.
Following API synthesis, Pfizer progresses to the formulation stage Here, the synthesized APIs are combined with other ingredients or excipients to create the final drug products. Formulation is a precise and methodical process aimed at achieving the desired therapeutic effect while maintaining safety and efficacy Pfizer's scientists carefully calibrate the composition of each medication to ensure consistent dosages and therapeutic outcomes.
Throughout the manufacturing process, Pfizer maintains rigorous quality control and assurance measures This includes constant monitoring and testing of raw materials, intermediates, and final products Advanced analytical techniques, such as high-performance liquid chromatography (HPLC) and mass spectrometry, are employed to verify the quality, purity, and consistency of each pharmaceutical product The company's commitment to quality underscores its dedication to patient safety.
Pfizer's manufacturing procedures are executed with the utmost adherence to regulatory guidelines The company's compliance with Good Manufacturing Practices (GMP) is a foundational principle Regulatory agencies, such as the U.S Food and Drug Administration (FDA) and the European Medicines Agency (EMA), play a pivotal role in shaping and overseeing Pfizer's manufacturing practices Pfizer's unwavering commitment to compliance underscores its dedication to the highest quality and safety standards.
After manufacturing procedure, the final drug products undergo meticulous packaging and labeling Proper packaging is critical to safeguard the integrity of the products during transportation and storage Pfizer's packaging procedures extend beyond containment; they encompass precise labeling that includes essential information This information comprises dosage instructions, expiration dates, lot numbers, and manufacturer details, all of which are necessary for regulatory compliance and patient safety.
The packaged products are stored in Pfizer's distribution centers and temperature-controlled warehouses Effective inventory management is crucial at this stage to ensure a continuous supply of products while minimizing the risk of shortages or wastage Pfizer's distribution network is designed to optimize inventory levels and maintain a seamless flow of products.
Pfizer engages in comprehensive distribution planning to coordinate the movement of products from distribution centers to various points of care, including hospitals, pharmacies, clinics, and wholesalers This planning involves forecasting demand, optimizing transportation routes, and scheduling shipments to ensure efficient delivery.
Transportation and cold chain management:
Transportation is a pivotal phase in Pfizer's distribution procedures The company leverages a network of logistics partners and couriers to transport products
For temperature-sensitive products, such as vaccines, Pfizer places a significant emphasis on maintaining a consistent cold chain This involves specialized temperature-controlled13
Group 12 packaging, refrigerated containers, dry ice, and advanced monitoring technology to ensure products remain within the required temperature range during transit and storage.
Upon arrival at distribution points, products are further distributed to healthcare providers. This includes hospitals, pharmacies, clinics, and wholesalers Healthcare providers play a crucial role in ensuring that patients have access to Pfizer's pharmaceutical products, whether through dispensing medications or administering vaccines.
Pfizer continues to monitor the safety and efficacy of its products even after distribution This step involves tracking and reporting adverse events, conducting product recalls when necessary, and addressing any issues that may arise to maintain patient safety.
Storage aspect of the Pfizer supply chain involves the storage of raw materials, work- in-progress (WIP) and final products For one of the biggest pharmaceutical manufacturers, what are the characteristics of Pfizer’s storage that has gained significant attention after COVID 19 pandemic? a Cold chain
There are 2 main product categories at Pfizer: Medicines and Vaccines, in which all vaccines are biologically sensitive substances that will lose effectiveness over time This loss of effectiveness is accelerated by fluctuation of temperature, usually higher temps In order to maintain products’ quality, Pfizer is required to store its vaccines in a cold chain with strict control of temperature from the time they are produced until the moment of use Pfizer created a supply chain that can manage ultra-low heat that vaccines require The cold chain of Pfizer contains various equipment including: Cold rooms, Refrigerators, Cold boxes and Freezers, …in which, the core of innovation is specially designed Cold box By using dry ice and regular replenishment, this box can store vaccines for up to 30 days Also, this cold box can also serve as a storage unit at the vaccination site Technology is applied in the Pfizer cold chain with GPS integrated thermal sensors that help monitor and prevent temperature deviations Pfizer has its own freezer farms as well: they put hundreds of freezers in space the size of a football field enabling storage of huge quantities of vaccine (more than 1.6 million doses in some sites) while still maintaining quality.
Pfizer’s Cold box US President Joe Biden tour Pfizer’s Freezer farm b Warehousing and products storage distribution
Evaluation of Pfizer’s supply chain
Based on the detailed analysis of Pfizer’s supply chain, we can generally evaluate the pros and cons of it.
Global appearance: With 35 manufacturing sites and 188 logistic centers, Pfizer operates an enormous and well-organized supply chain network This allows the company to reach consumers globally as well as diversify its customer segments Also, Pfizer can easily cut down logistics and transportation costs due to its localization strategy and dynamically distribute pharmaceuticals to anywhere in the world.
Expertises: Established in 1849, during 174 years of existence and development,
Pfizer has gained significant knowledge and expertise in the medicine-making industry In the field of pharmaceuticals, where strict technical requirements are applied in producing and testing, this is the greatest advantage of Pfizer.
Technologies and innovations: In recent years, Pfizer continuously researches, develops and applies the supply chain with technologies The typical of which is the Freezer farms, Cold box with integrated GPS thermal sensor, high-performance liquid chromatography (HPLC) and mass spectrometry analytical techniques, These innovations enhance efficiency and adaptability.
Wide range of customers: This advantage allows uninterrupted consumption for
Pfizer’s products In COVID 19 pandemic, Pfizer is the largest manufacturer of vaccines and provides products to over 180 nations This builds a relationship with the widest-possible with customers from all over the world for a singer company. 2.3.2 Disadvantages
Complexity: Managing a global supply chain can be difficult and challenging, particularly for vaccines with strict temperature requirements.
Dependence on Few Suppliers: A supply chain's resilience may be at risk if crucial components and raw materials come from a small number of suppliers With the pharmaceuticals industry, Pfizer has to apply strict regulations on raw material This is why company only has limited number of suppliers
Regulatory risks: The pharmaceutical sector is subject to strict regulations, which can cause delays and make compliance difficult This may also bring company with undesirable lawsuits
Costs: Keeping a strong cold chain infrastructure for vaccines can be expensive, and changes in the price of electricity and transportation might affect how cost-effective the supply chain is.