Tuesday, September 3, 2013

Is Globalization De-Risking the Life Science Supply Chain or Not?

The Life-Sciences Industry faces fragmented demand chains and tough regulatory barriers. A recurring problem faced by biotech companies is an aging product portfolio which slows profits and thus requires the organization to constantly innovate and renovate the product line.

Therefore, industry members are turning to third party operators at all levels of the supply chain to reduce costs, satisfy local demand, and enhance capacity flexibility. These companies are adding to their pipeline by adopting process improvements and newer technologies targeted at improving collaboration and increasing productivity.

However, the flip side to this worldwide scale of collaborative operations with third parties which has made supply chains globally dispersed and virtual in nature is huge. Many owners have limited access and visibility to the supply chain from end-to-end and who must rely heavily on local contractors operating in great measure without close supervision. Further, the emergence of biologics and specialist therapies, is hampered by environmental conditions and their immense value to counterfeiters and competitors.

A few emerging threats that need to solved are product contamination, counterfeiting, intellectual property theft and product diversion. Globalization is inevitable but the industry needs to mitigate risk by tackling these issues and streamlining R&D processes and supply chains.

This report highlights potential vulnerabilities in global supply chains and is an intriguing read. It discusses the fundamental question of how globalization can impact new product development and supply chain designs especially in life sciences industry where the product life cycle is so lengthy.

Source: ‘Globalization of the Life Sciences Supply Chain’ by Wynn Bailey, PwC, January/February 2011 (retrieved from Contract Pharma)

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