The pharmaceutical industry requires supply chain managers to ensure that the product is in proper condition and delivered on time. Medical supplies are considered perishable goods, so they require adequate packaging, storage, and careful handling (Abideen & Mohamad, 2019). Moreover, many pharmaceuticals have a relatively short expiration period, which should be considered by different actors of the distribution chain. The distribution chain starts with the manufacturer of raw materials located local or abroad, which transports chemicals or raw packaging materials to the producer of medical supplies. The pharmaceutical company receives a purchase order and manufactures the product using the raw materials and employs an advanced packaging system to deliver a safe, stable, and effective medical product (Amarji et al., 2018). The pharmaceuticals are then directed to the wholesaler, who organizes appropriate storage conditions and supplies the goods to medical facilities or pharmacies. The movement of raw materials and packaged products is supported by logistics and transportation companies (Dani, 2015). Finally, the pharmaceutical product is distributed by healthcare facilities and pharmacies, delivering the end product to consumers.
The Impact of Inbound and Outbound Logistics
Inbound logistics influence transportation, warehousing, and distribution requirements via a combination of factors, including potential disruptions and foreign suppliers. The supply of materials needed to produce the end product may come from a variety of countries. Thus, there is a need for a decentralized approach involving a multi-country distribution system consisting of an international distribution center and several regional DCs (Onstein et al., 2016). It should be noted that a decentralized distribution system requires specifications of chemical raw materials and control of receiving and dispatching zones to guarantee safety and proper packaging or handling procedures. Investment in a transportation management system (TMS) might improve global freight’s timeliness and visibility and decrease the risks of disruptions due to accidents or natural disasters (Harrington, 2018). Event-mentoring via a TMS is a cost-effective inbound logistics measure providing a proactive approach and a predictable supply of raw materials.
Several factors of outbound logistics may impact logistics requirements. Transport and storage systems should have temperature control equipment to protect the quality of medical supplies. Direct distribution channel, cooperation with the manufacturer, and proper packaging assist in timely delivery of products with a limited expiration period. Intermediaries might be used to optimize the distribution costs if the conditions for firm protective packaging are met. Additionally, some pharmaceutical products are subject to government regulations and storage conditions, so all distribution chain actors might need wholesale dealer licenses or operating permits. An uninterrupted flow of the product can be achieved by the correct sequence of delivery transport movement, responding to the rhythm of demand (Mitsumasa et al., 2012). The establishment of a fixed loading volume program might and prevent high-demand products from going out of stock.
The Impact of Global Trade
Globalization is a major trend in logistics requiring complex mechanisms for worldwide production and long-distance supply harmonization. Coordination of economic activities located in several countries worldwide involves international regulations and agreements, as well as cultural and economic differences (Farahani et al., 2011). The pharmaceutical industry heavily depends on global trade, as medical supplies are produced by companies using both national and international sources of raw materials. Thus, global trade might significantly impact the transportation, warehousing, and distribution requirements of raw materials supply. Off-shoring is a common practice of establishing a facility abroad to produce raw materials and components since developing countries offer competitive supply prices and decrease inbound logistics costs (Journeyman Picture, 2009). The exported raw materials used in pharmaceutical production and packaging should be safely transported, stored, and distributed. Modern transportation is cost-effective, fast, and reliable, so it facilitates the export of pharmaceutical components. International pharma trade is subject to government regulations, limiting the distribution of exported raw materials to ensure safety and prevent contamination. Finally, global trade can help optimize the warehousing of raw materials since distribution structures, including regional DCs, will be responsible for providing adequate storage conditions.
References
Abideen, A., & Mohamad, F. (2019). Supply chain lead time reduction in a pharmaceutical production warehouse – a case study. International Journal of Pharmaceutical and Healthcare Marketing, 14(1), 61-88.
Amarji, B., Kulkarni, A., Deb, P. K., Deepika, Maheshwari, R., & Tekade, R. K. (2018). Package Development of Pharmaceutical Products: Aspects of Packaging Materials Used for Pharmaceutical Products. In R. K. Tekade (Ed.), Dosage form design parameters: Volume II (pp. 521-552). Academic Press.
Dani, S. (2015). Food supply chain management and logistics: From farm to fork. Kogan Page.
Farahani, R., Rezapour, S., & Kardar, L. (Eds.). (2011). Logistics operations and management: Concepts and models. Elsevier.
Harrington, L. (2018). Global trade disruption: Managing the new normal. Inbound Logistics.
Journeyman Pictures (Producer). (2009). Global car: Who really builds the American automobile? [Video file]. Web.
Mitsumasa, A., Takita, V., & Leite, J. C. (2012). Inbound logistics: A case study. Business Management Dynamics, 5(12), 14-21.
Onstein, A., Tavasszy, L. A., & van Damme, D. A. (2016). Factors determining distribution structure decisions in logistics: A literature review and research agenda. Transport Reviews, 39(2), 243-260. Web.