Pharmaceutical Supply Chain Management in 2024

Published: February 14, 2024
Author: Lorcan Sheehan

Pharmaceutical supply chains need to meet the medical needs of patients, delivering quality assured products and ensuring product availability in highly regulated markets around the world.    Billions of dollars are invested every year in scaling Drug Substance, Drug Product and Packaging operations, but there is an increasing realization that in parallel with expanding manufacturing operations, creating a resilient and agile pharmaceutical supply chain requires more structured approach to addressing pharmaceutical supply chain management and material flows.

Key Challenges in the Pharmaceutical Supply Chain:

Warehouse capacity planning:
What are the levels of capacity required and handling requirements for ambient, cold – 2-8 degrees, frozen -40 and -70, hazardous and flammable materials?  How do these needs scale with planned increases in manufacturing volumes and changes in the product mix?   How much capacity should be on site vs with suppliers and third-party logistics partners?  

Inventory planning:
How is inventory planned to ensure availability within a manufacturing schedule?  What is required to avoid disruption from potential batch failures and to accommodate potential schedule changes in response to demand, regulatory or approval changes.  Are there opportunities to work with suppliers on vendor managed inventory?  Pharmaceutical supply chains are renowned for conservative inventory policies but as volume scales, excess inventory can contribute to bottlenecks.

Material flows:
Do we have sufficient space to manage receiving, picking, kitting, staging, shipping and waste flows?  Do our flows minimize the time out of refrigeration? Do we have potential bottlenecks in the process as volumes increase – receiving, staging, weigh and dispense?  Can corridors, doors and airlocks accommodate the expected volume increases without compromising safety?

Enabling lean processes:
How do we operationalize the material flows to support lean processes?  How should we configure storage areas to control materials and enable efficient operations?  How can we use pharmaceutical manufacturing schedules to preposition materials for efficient workflows?   How can we leverage automation to eliminate manual steps and to increase density of operating areas?

PerformanSC Solutions for the Pharmaceutical Supply Chain:

Interactive Warehouse Capacity Model
We use pharmaceutical supply chain data and current inventory policies to create an interactive warehouse capacity model.  This is linked to forecasts to show requirements by year and split by storage type (ambient, cold – 2-8 degrees, frozen -40 and -70, hazardous and flammable materials) and by pharmaceutical manufacturing process – DS, DP and Packaging.  The model can be linked to product forecast changes and can highlight capacity sensitivity to changes in inventory policies and the relative storage requirements by supplier and material type.

Digital Twin Assessment of Material Flows
We develop a 2D and 3D ‘digital twin’ of the pharmaceutical manufacturing facility with a focus on key material flows.  This allows us to simulate current flows at normal and peak volumes and scale these flows with planned forecast increases.    The simulation highlights potential areas of congestion at future volume levels, and can be used to test proposed layout and process solutions to these flows.  

Optimise current space utilization:
We use inventory location and movement data to create 2D and 3D heat maps of how current storage locations are being used.   This provides insights into the most efficient use of current space, staff travel distances and highlights opportunities to modify flows to improve efficiency, reduce cycle time and improve the responsiveness of the pharmaceutical supply chain.

Risk based approach to safety stocks:
We leverage supply chain data to provide a systematic, risk based, approach to ensure inventory coverage supporting manufacturing schedules.   Recognizing supply, quality, demand and schedule risks, it provides an approach setting appropriate safety stocks that can be dialed up and down based on risk factors and required mitigation.   


Pharmaceutical manufacturing operations are rich with data that can be leveraged to scale inventory and supporting supply chain functions.   Our experienced team works collaboratively with pharmaceutical supply chain teams to interrogate and structure that data in a manner that provides insights into current performance and scalability requirements.   From these insights, we support the development of capital, process and digital solutions to future manufacturing requirements.

Read more about our Performance Optimisation Services, Outsource Process Management Strategies, as well as the Industries that we specialise in. Contact us to schedule a discussion on how we can use our supply chain expertise to develop a roadmap to scale and improve your pharmaceutical supply chain operations.

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