Outsourcing a threat to supply chains, says PwC

By Gareth Macdonald

- Last updated on GMT

Related tags: Supply chain, Pharmacology

Increased outsourcing carries a significant operational risk according to executives quizzed in a new survey by PwC and Axendia.

The study​, which asked 112 drug industry execs to predict what impact increased outsourcing will have on the industry, revealed that the majority consider the practice of sourcing raw materials from outside the US as the greatest threat to supply chain security.

The main problem, according to the respondents, is that the standard method of supply chain monitoring though supplier audits and site visits is impractical and too expansive to implement in the increasingly complex global network.

The lack of communication between relevant parties was also identified as an issue with 60 per cent of respondents voicing worries about the willingness of suppliers to provide regulatory information and a further 40 per cent raising similar concerns about distributors.

Track and trace

On a more positive note the participants welcomed the advent of track and trace technologies as an important step in increasing visibility, although again, many voiced concerns about the cost and difficulty of applying such technologies.

The majority of the respondents also suggested that drug industry consortia like Rx-360 and the Pharmaceutical Supply Chain Initiative are a preferable approach to supply chain monitoring.

Axendia president Daniel Matlis said the findings indicate that: "The life sciences industry must gain tighter control over the complete supply chain, from ingredient to the consumer, to succeed in the global economy​."

PwC’s Wynn Bailey agreed and went on to emphasise the difficulty of the supply chain challenging facing the pharmaceutical industry.

"With manufacturing, sourcing and the sale of medical products expected to increase dramatically in the emerging markets, the geographical expansion of the supply chain will make it more difficult to manage, as will the industry's changing product mix.

Companies will need to implement new strategies, processes, and technology to proactively reduce and control risks​."

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