Pharmaceutical supply chain: The importance of outsourcing

Abstract

A vast web of organizations, companies, and teams involved in creating, researching, and producing drugs and associated products makes up the pharmaceutical sector. In this context, the term “supply chain” refers to the network of individuals, processes, information, and resources that transform raw materials and parts into finished goods and services before being supplied to customers. The pharmaceutical supply chain system, then, offers customers medications in the right amount, at the right time, with acceptable quality, and for the lowest feasible cost. Pharmaceutical companies are increasingly contracting out their supply chain activities due to the severe push to keep R&D expenses under control. Instead of being a cost-cutting measure, global supply chain outsourcing can be seen as a strategic competitive weapon that can improve positional advantage, offer production flexibility, and meet the ever-increasing expectations of final consumers. Global supply chain outsourcing is crucial for pharmaceutical firms to enhance performance and profit margins by leveraging core skills and resources beyond other strategies which can lower risk, increase flexibility, improve returns on capital, and improve a company’s ability to respond to the needs of its shareholders and consumers. Even while there is widespread recognition of the alluring advantages of global outsourcing, many of the related concerns are frequently disregarded. In addition to briefly discussing risk assessment methods, the goal of this work is to offer manufacturer-focused insight into supply chain-related outsourcing concerns within the pharmaceutical industry.