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Globalization and Growing Complexity Strain Supply Chains
Healthcare and pharmaceutical supply chains are feeling the strain of increasing globalization and rapidly growing complexity. With tremendous opportunities for growth in emerging markets, many manufacturers have executed aggressive globalization and outsourcing strategies. With this has come increasing business complexity as they now face varying regulations across global supply chains and longer and riskier supply chains.
Healthcare and pharmaceutical manufacturers also must deal with increasingly complex demand patterns. They have to simultaneously deal with predictable patterns for mid-life cycle products and highly unpredictable patterns for new introductions. They typically have to deal with both low volume, high mix products that require quick response for clinical trials and high volume products that require globally ramped production and delivery capabilities.
Regulatory requirements continue to come from all angles. This highly regulated environment requires extensive data collection and information exchange to ensure chain of custody and monitoring of various controls and management of expiry for safety, error prevention, reassignment and safe disposal. All of this at a time when the supply chain itself is increasingly multi-enterprise and globally distributed.
Many manufacturers lack the required process standardization in purchasing, inventory management and other core business disciplines to cope. And, collaboration across the players in the supply chain is often inefficient and insufficient.
Inventory Management Challenges Grow
For many healthcare and pharmaceutical manufacturers, inventory management challenges are growing exponentially with the increasing supply chain and business complexity. Many are struggling with:
- Growing pressures to cut costs tied up in inventory
- The need to meet very high service levels, often driving overly cautious approaches for extreme over-buffering on inventory levels
- Inventory positioning challenges of determining why, where, when & how much inventory
- Inherent uncertainties in supply and demand due to numerous product/market combinations, regulatory restrictions and safety concerns
- Lack of data integrity makes it extremely hard for planners to forecast and decide with confidence how much inventory of each item should be kept at any point in the supply chain at a time
- Large global supply chains characterized by numerous product supply chains having different markets
- Lack of visibility into the overall inventory picture
Integrated Planning-Monitoring-Response Needed to Improve Service and Reduce Costs
Growing business and supply chain complexity requires a re-evaluation of business processes and their supporting tools. Gone are the days where separate demand and supply organizations can individually develop optimized plans based on set assumptions and pass them off to other teams for execution. Emerging supply chains require more collaboration and less control; more coordination and less optimization.
Healthcare and pharmaceutical manufacturers need solutions that integrate demand-supply planning, monitoring and response. Kinaxis™ RapidResponse™ was purpose built to deliver this capability to help manufacturers manage increasing business complexity and achieve operations performance breakthroughs, such as dramatic inventory reductions. RapidResponse is an on-demand service that enables collective risk tradeoff and response to change by empowering front-line decision makers with integrated tools for supply chain visibility, demand management, supply management, sales and operations planning (S&OP) and supply chain risk management.
Today's manufacturers have entered a new era of surprise and compromise that requires equal proficiency in demand-supply planning, monitoring and response capabilities supported by tools purpose built to deal with today's increasingly complex supply chains.
