Complexities of Supply Chain Planning in Life Sciences
The pharmaceutical industry is different from others mainly in its extent of regulation which, of course, is as it should be. The impact of regulation is manifest in many evident ways, such as how quality testing and product release are managed. However, its impact is also very significant in less obvious ways, notably in how planning is managed. The impact of regulation on planning becomes even more complex in the current transition underway from an industry based on synthesized molecules to one of biological products. In contrast to most drugs that are chemically synthesized where their structure is known, most biologics are complex mixtures that are not easily identified or characterized.
Characteristics-based planning is now moving center stage for many of the world’s leading producers.
What is “characteristics-based planning”?
When planning the resources that will be needed to fulfill current, expected and longer-range forecast orders, all industries need to consider market-specific needs. In other words, not all markets will accept the same product. Apart from the obvious requirements like market-specific labeling and branding, there are more nuanced needs. Product recipes for consumer goods are usually market-specific – for example, ketchup, cola drinks, and chocolate bars may all look familiar but the recipes are not the same across all markets. In the case of medical products, the characteristics of products that may be sold in a market are largely defined by the regulator in that market, rather than by consumer preferences. Some examples of the characteristics of a final saleable dosage form serve to demonstrate the challenge:
- The regulatory authorities in Country A may require that the medicine does not contain raw materials from country B.
- The regulatory authorities in both Country X & Y may stipulate that only a specific factory may produce the bulk drugs that go into the dosage forms for sale in those two countries.
- Regulators often require re-approval of a drug if the process by which it is manufactured is improved, during which time no product made in that more efficient or higher volume plant can be sold. That re-approval can take time, and therefore a balance needs to be struck between using the new process to build inventory (at the risk of destroying millions of dollars’ worth of valuable product if approval is not granted), and waiting until approval is granted (or close to it).
Defining the solution
Increasingly, pharmaceutical and biotechnology leaders are looking for an end-to-end solution, from strategic and long-term planning all the way to batch determination during fulfillment of sales orders. We are hearing from our customers and prospects that market compliance in planning and fulfillment is paramount to their global success. As a result, SAP is engaged in co-innovation and continues to seek industry leaders to help define the next generation solution for this complex and business-critical requirement. If you would like to find out more, please contact me at Stephen.email@example.com.