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
Group 12 FOREIGN TRADE UNIVERSITY SCHOOL OF ECONOMICS AND INTERNATIONAL BUSINESS - - SUPPLY CHAIN MANAGEMENT REPORT GROUP 12 ANALYSIS OF THE PHARMACEUTICAL SUPPLY CHAIN: A CASE STUDY OF PFIZER Class Instructor : TMAE313(HK1-2324)1.1 : Ph D Nguyen Thi Yen Hanoi, September 2023 Group 12 Participant Student ID Pham Truong Thuc Anh Nguyen Thi Van Trang Le Hieu Ngan Hoang Duy Vu Quang Khai Le Tung Lam 2112150174 2112150174 2113150050 2113150015 2114110150 2112550022 Table of Content INTRODUCTION THEORETICAL FRAMEWORK 1.1 Supply chain: 1.2 Pharmaceutical supply chain: 1.2.1 Overview of the pharmaceutical supply chain: 1.2.2 Roles of the supply chain in the pharmaceutical industry: 1.2.3 Differences between supply chain and pharmaceutical supply chain: A CASE STUDY OF PFIZER 2.1 Overview of Pfizer 2.1.1 What is Prizer? 2.1.2 History of Pfizer 2.1.3 Overview of Pfizer’s supply chain 2.2 Analysis of Pfizer’s supply chain 10 2.2.1 Suppliers 10 2.2.2 Manufacturing 12 2.2.3 Packaging 13 2.2.4 Distribution 13 2.2.5 Storage 14 2.2.6 Customers 16 2.3 Evaluation of Pfizer’s supply chain 17 2.3.1 Advantages 17 2.3.2 Disadvantages 18 RECOMMENDATIONS FOR FURTHER DEVELOPMENT 18 3.1 Recommendations for the pharmaceutical supply chain 18 3.2 Recommendations for Pfizer’s supply chain 19 CONCLUSION 21 REFERENCE 22 Group 12 INTRODUCTION Supply chain management is the backbone of modern commerce, facilitating the efficient flow of goods, information, and services from raw material suppliers to end consumers In today's globalized economy, supply chains have evolved into intricate networks that link manufacturers, distributors, retailers, and consumers across the world The effectiveness of supply chains influences product availability, cost competitiveness, and customer satisfaction Moreover, supply chains are susceptible to various challenges, including disruptions, demand fluctuations, and sustainability concerns Understanding the fundamentals of supply chain management is crucial for businesses and organizations seeking to optimize operations, minimize risks, and meet the demands of a dynamic marketplace An important field in the supply chain topic that serves as a basis for humanity's advancement in healthcare is the pharmaceutical supply chain management The pharmaceutical supply chain is a complex and vital component of the healthcare industry, encompassing the intricate web of processes and activities required to bring lifesaving medications, vaccines, and healthcare products from the initial research and development stages to the hands of patients and healthcare providers As global populations continue to grow and age, the demand for pharmaceutical products is on the rise, making the efficiency, transparency, and resilience of the pharmaceutical supply chain more critical than ever As an important basis of global healthcare, this field of supply chain management faces unique challenges in ensuring the uninterrupted production and distribution of life-saving drugs and vaccines In the wake of the unprecedented COVID-19 pandemic, the spotlight has intensified on the pharmaceutical supply chain Our case study dives into Pfizer, one of the world's leading pharmaceutical companies, to scrutinize the intricacies and challenges that characterize pharmaceutical supply chain management, with particular attention to its role in the development and distribution of the Pfizer-BioNTech COVID-19 vaccine Founded in 1849, Pfizer has evolved into a healthcare behemoth renowned for its innovative medicines and vaccines The COVID-19 pandemic has proven that the pharmaceutical supply chain plays an important role in ensuring the well-being of the world, but it has also encountered unparalleled challenges Pfizer had been at the forefront of the industry, their prized invention - the Pfizer-BioNTech COVID-19 vaccine played a significant role in containing the spread of the global pandemic Group 12 Our case study aims to delve into Pfizer's supply chain strategies, shedding light on the critical factors contributing to its success and resilience amid the pandemic By examining Pfizer's experiences, we hope that our research offers invaluable insights into effective pharmaceutical supply chain management, underscoring its pivotal role in combating global health crises Group 12 THEORETICAL FRAMEWORK 1.1 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 1.2 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 (Source: nextbigthing.ag) Document continues below Discover more from: Chain Supply Management TMA313 Trường Đại học… 176 documents Go to course PHÂN TÍCH HOẠT Group 12 58 Manufacturing: ĐỘNG QUẢN LÝ CHU… Supply Chain… 100% (7) The first significant phase in the pharmaceutical supply chain is pharmaceutical manufacture It involves the conversion of raw materials into finished medications The Application-of-ICT-inprocedure entails locating premium raw materials, formulation, manufacture, quality control, logistics-and-supply… and adherence to regulatory standards 10 Pharmaceutical manufacturers use raw materials, cutting-edge technology, equipment, Supply Chain Management 100% (1) 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 Sem - Structural things or maintaining the process would have a detrimental impact on the rest of the supply Equation Modeling chain Depending on patient demand, pharmaceutical companies produce medicines and 670 Supply Chain vaccines in various locations around the world Purchasing chemical components to create the 100% (1) Management 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 Case 8.1 Low nail company Packaging: Packaging is a key step throughout the pharmaceutical process Pharmaceutical Supply Chain 100% (1) packaging refers to the materials, designs, and systems that package, store, label, and help Management 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 NOTE Supply chain with labelling regulations for clear and accurate information Distribution: Supply Chain Management None 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 Should Companies disruptions, effective handling, security, and temperature control are crucial Refrain From Making… Wholesale distributors get medications, which they then distribute to retail Supply pharmacies Wholesale distributors are essential to inventory control, orderChain fulfilment, and on-time delivery to pharmacies Dispensed to Consumers: Management None Group 12 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 Group 12 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 temperaturesensitive deteriorate if pharmaceutical companies 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 Group 12 Regulatory Compliance: 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 2.2.3 Packaging Packaging and labeling: 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 2.2.4 Distribution Storage and Inventory Management: 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 Distribution Planning: 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-controlled 13 Group 12 packaging, refrigerated containers, dry ice, and advanced monitoring technology to ensure products remain within the required temperature range during transit and storage Delivery to healthcare providers: 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 Post-distribution monitoring: 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 2.2.5 Storage Storage aspect of the Pfizer supply chain involves the storage of raw materials, workin-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 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 14 Group 12 Pfizer’s Cold box US President Joe Biden tour Pfizer’s Freezer farm b Warehousing and products storage distribution Pfizer has a global network of strategically positioned warehouses to keep its pharmaceuticals, including vaccines, in stock To handle products with diverse storage needs, these warehouses are fitted with a variety of temperature zones In order to ensure that vaccines and other medications are stored at the proper temperature and quickly transported to their destinations, effective inventory management and tracking systems are required for distribution Pfizer’s global sites Pfizer’s warehouses also use the First-In-First-Out as (FIFO) system as pharmaceuticals can deteriorate over time and lose efficacy, they have specific expiration dates With 35 manufacturing sites and 188 logistic centers positioned globally, Pfizer can effectively store its raw material, WIP and final products and adopt lean inventory management Pfizer also 15 Group 12 continuously optimizes the Just-In-Time (JIT) system to minimize storage cost while ensuring product availability 2.2.6 Customers As one of the largest medicines manufacturers, Pfizer’s customers are made up of a wide range of individuals and organizations The customers aspect of the supply chain is critical to Pfizer, this examines the basis of Pfizer’s customers and how products reach them efficiently a Wholesalers and distributors Pfizer frequently collaborates with wholesalers and distributors to close the distribution and production gaps These middlemen are essential in making sure that Pfizer's products get to pharmacies and healthcare facilities In North America (NA) region Pfizer mainly distributes it products through wholesalers: AmerisourceBergen Cardinal Health McKesson Pfizer revenue contribution by North America distributors Wholesaler Revenue in 2020 Revenue share in 2020 AmerisourceBergen 5.45 13% Cardinal Health 4.19 10% McKesson 6.71 16% Others 5.44 13% 41.91 100% Pfizer (Unit: US $ billion; Source: Business Quant) In which, McKesson is the biggest distributor with 16% of Pfizer’s revenue followed by AmerisourceBergen and Cardinal Health with 13% and 10% respectively In general, US wholesalers acquire 52% of Pfizer sales and cover all the health care market of NA region b Pharmacies With over 45000 pharmacies in the US, this category is also a key customer segment of Pfizer The typical pharmacies are: 16 CVS Pharmacy Walgreens Health Mart Good Neighbor Pharmacy Group 12 GNC These pharmacies appear in every state in the US ensuring distribution of Pfizer’s pharmaceutical to most final consumers Retail and institutional pharmacies are key customers for Pfizer's over-the-counter (OTC) and prescription drugs Pfizer collaborates with pharmacy chains and independent pharmacies to ensure product availability and timely restocking c Governments and Public Health Institutions In the COVID 19 pandemic, over 180 countries used Pfizer vaccines from around the world The majority of COVID 19 vaccines were provided to people without any charge and therefore, these vaccines were mainly purchased by governments and public health organizations Estimated number of 4.6 billion doses of Pfizer COVID 19 vaccines were given worldwide The major user of these vaccine was: US: 604 million doses Brazil: 356 million doses Germany: 247 million doses Viet Nam: 111 million doses 2.3 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 2.3.1 Advantages 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 17