How pharma supply chains can save on costs in the new financial year

As the 2022/23 financial year kicks off, it’s time to consider how you’ll allocate costs, where you can save and how you’ll be able to grow your pharmaceutical business over the next year. Your supply chain can, and should, be a significant part of that planning. As customer demands grow and disruptive events increase, so does the importance of building an agile and resilient supply chain. Investing in the resilience of your supply chain and optimising it correctly could actually save money and even increase profits.

 

Becoming a data-driven supply chain

According to Forbes and KPMG, 2022 is the year of tech and AI in logistics. There is an increased reliance and readiness for tech-based solutions in the supply chain world. This means that, as the breadth of data inputs grows, AI and machine learning will only become more effective. In order to continue succeeding in the future, supply chains will need to embrace a data-driven approach to decision making. Decisions based on historical and real-time data are more likely to result in the best outcomes across targets such as fulfilment times and costs of fulfilment. Luckily, most supply chains are data-rich, even if accessing and utilising that data isn’t currently happening.

We’ve been living in the world of ‘Big Data’ for some time. But businesses can now use AI in supply chains, regardless of company size, with as much or more effectiveness. Because technology as a whole has become established within logistics, businesses can now harness an abundance of data about how their particular supply chain runs. Paired with an advanced AI like LEO, companies of every size can better analyse and optimise their supply chains.

Read more: Ability Matters - AI & Automation in the delivery of medical devices [Case Study]

 

Stress Testing

In the unpredictable world we live in, it has become necessary to expect the unexpected. But locating the stress points in your supply chain can be difficult to do. Typically, stress testing and risk management have relied on historical data alone to predict future issues. However, due to the dynamic and global nature of supply chains, this can no longer be sufficient. Events like the Covid-19 pandemic and resultant global lockdowns showed that historical data was inadequate in forming future-focused strategies.

Using LEO to create a digital twin of your supply chain, you can gain greater resilience through periodically stress testing it against varying degrees of scenario planning. This can help you test the bounds of your logistics network and find what areas are most brittle. LEO can then help you remodel that existing infrastructure to one that is better able to withstand change. Being better prepared for shocks to the system means you can respond faster, reducing financial losses that result from downtime in the supply chain.

 

Multi-provider strategies

Contracting with a single provider can appear advantageous at first glance: it’s easier to deal with a single source of services, simplifies operations and helps maintain process control. It also makes life easier for procurement teams and, if anything goes awry, the source of the problem is clear.

However, that doesn’t paint the whole picture. Our studies have shown that it’s actually more cost-effective to work with multiple providers, capitalising on areas where each offering is most successful. Prices may seem lower by going with a single provider that offers 'discounts,' but we've proven that costs are lower and service levels are better with multiple providers.

Diversifying your provider range also enables greater agility during unsettled times. It also makes sure that, when it comes time to renegotiate contracts, your solitary provider isn’t the one holding all of the cards. This makes for fairer and more cost-effective contracts in the future.

Read more: Working with multiple providers to cut costs

 

Demand planning

Accurate and efficient demand planning is a crucial part of supply chain management. In fact, it is one of the major ways that you can save in your supply chain. AI is a powerful tool for connecting demand to supply across the pharma supply chain. Using AI to enhance decision making and plan more precisely can save both frustration and cost in the coming year. This can be especially useful when outsourcing to Contract Manufacturing Organisations (CMOs).

You can use AI and demand planning to cut storage and handling costs, ensuring that your warehouses have only the stock needed at any given time. Good demand planning can also help prevent missed sales due to stock-outs by ensuring on-demand access to goods.  Reduce risk and increase resilience, rapidly adapting to changes in demand and avoiding potential bottlenecks with dynamic and predictive inventory optimisation.

Tackling each of these four areas can be accomplished through hard work and long, technical projects. Or through a simple, quick AI implementation. Succeeding with a modern supply chain means using all of the tools that you have available and maximising the impact of your logistics. 




Find out how 7bridges can best work for your business in our 7bridges for Pharmaceutical guide.