Question: As pharma executives think about how to re - invent their supply chains, they may be daunted by the enormity of the task. But they
As pharma executives think about how to reinvent their supply chains, they may be daunted by the enormity of the task. But they can take comfort from the fact that other industries have blazed most of the necessary trails. Manufacturers such as Procter & Gamble P&G Unilever, and Nestle are some of the exemplarscompanies that can boast longproven and highly effective practices and continual reinvestment in new thinking about supply chain efficiencies.
Product portfolios in pharma are far more complex than is typical of families of consumer goods products; average revenues per stockkeeping unit SKU can be many times higher. Complexity involves longer production lead times, multistage manufacturing, the need to never be out of stock because of the implications for patients, and the stringent quality regulations that govern the industry. The counterargument is that it is also true that many aspects of pharmas' supply chains are simpler than those in consumer goods. For instance, there is little sudden variability and predictability in demand for most pharmaceutical products after launch by contrast with consumer products such as yogurt, mobile phones, or apparel. In short, we contend that the intrinsic differences are not enough to prevent pharma executives from adopting proven practices from the consumer business. So what are the specifics that pharma managers can learn from their colleagues in consumer goods? Most important, supply chain champions focus on many fronts simultaneously.
Source: Boeck, P and Mishra D
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As highlighted in the case study, "What works to distribute products to consumers in Germany or Japan will not be anywhere as near as effective in rural China". Critically discuss if you agree with the statement and provide relevant evidence to substantiate your response.
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