Supply Chain Transformation for Pharma

Teva pharmaceuticals gets slaughtered.

Pharma is at a cross-road.

So are other leading brand name companies such as P&G, General Motors, General Mills to name a few.  They are facing the onset of unknown competitors powered by big data analytics and technology.  Here is an example that happened this past week.

 

Teva, the king of generic pharma is losing its crown if not already.  Perhaps not the crown but may be the generics kingdom is about to slowly disappear.  Teva lost half its market value in a week.  It announced revenue and earnings miss.  The worst is not over yet.

Advances in technology, big data and analytics have given a few non-industry players an advantage over traditional pharma insiders. Companies with an edge in supply chain technology guided by big data and analytics are well positioned to take over entire industries.

Where is your S&OP?

I facilitated an S&OP Discussion Panel for pharmaceutical and Biotech executives last week.

Cross-section of diverse experiences from small and large pharma companies.  The report card when it comes to S&OP is not very good. We need to make great strides towards streamlining Sales and Operations Planning process in Pharma for both clinical supply chains as well as commercial supply chains.

Many challenges are facing the pharma industry-

1. Patent expiration
2. Increasing costs for regulatory compliance
3. Logistics challenges with highly temparature sensitive products
4. Price erosion in the generics market with the advent of price-competitive generics from India and other Far East countries
5. Multiple layers in the distribution channel and potential threat from Amazon to consolidate the distribution channel which may lead to bigger price erosion.

Teva is just the tip of the iceberg.

This should be wake up call for the Pharma companies to invest in technology, supply chain enhancements and adapt to the new analytics-driven world.  Now is the time or it is game over….

We would be interested in hearing your experiences from Pharma executives on the state of the supply chain and management of Sales and Operations Planning.  Starting with S&OP and investing in the technology will allow you to bring information from disparate parts of your supply chain into one planning forum – you can smell the coffee that will obviate the painful experience of a black swan event.