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Supply Chain Visibility

Batch traceability in pharmaceutical manufacturing
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Batch Traceability in Pharmaceutical Manufacturing
Batch Traceability in Pharmaceutical Manufacturing 700 500 Xcelpros Team

One of the oldest in the world, the pharmaceutical industry has had to face many challenges over the years. One of the biggest challenges that still presents itself today is how to address batch traceability when it comes to pharmaceutical manufacturing.

The importance of Pharma batch traceability

For a multitude of reasons, pharmaceutical manufacturers need the ability to maintain traceability throughout their entire batch process. This means being able to identify every single ingredient and process step that was involved in creating a production batch. When an issue arises, this information can help determine which action caused the problem and where it may have originated.

Batch traceability will help identify what went wrong and provide critical data for addressing any resulting challenges. A manufacturer should be able to provide an audit trail for every batch manufactured and retrieve this information quickly when needed.

When combined with other quality systems, such as an SOP manual or cGMP guidelines, batch traceability becomes more potent.

DSCSA (Drug Supply Chain Security Act)

Brought to life by the FDA and Congress in 2013, the DSCSA was designed to change how pharmaceutical products and raw materials are treated throughout the supply chain, including prescribing ways to trace the movement of products when packaged and distributed. The goal of the DSCSA was to increase the security of pharmaceutical products and patient safety using pharmaceutical finished goods. This then new law offered:

  • 1 Single federally supported solution to replace requirements that might have been different for every state
  • A simplified, consolidated view of supply chain regulations that focus on enhanced patient safety and security
  • Higher standards for distributors in the U.S.
  • Streamlined processes for identifying the suspect or counterfeit goods in the supply chain

As we approach the 10-year deadline set by the DSCSA, where partners in the supply chain will need to provide item-level traceability when products move from one party to another, stakeholders must make sure they’re in full compliance.

The longer you need to implement a track-and-trace solution, the more at risk you face things like heavy fines, loss of licensure, and even imprisonment.

For more information about the act – see FDA DSCSA 

GS1 traceability standards

With so much more data getting captured every second, GS1 standards are a way to focus on what’s important – with a set way to manage your supply chain data to make sure important data is always available, understandable and 100% accurate.

GS1 traceability standards are part of a larger global framework used in over 100 countries to ensure the systems they use for traceability are designed for interoperable collaboration and sharing information for the entire supply chain using the following.

  • Critical Tracking Events (CTEs) Actual events that occur throughout the lifecycle of a traceable product or raw material. This includes things like packing, shipping, and receiving.
  • Key Data Elements (KDEs) Important information and data regarding the specific pieces of Critical Tracking Events.
  • Global Trade Item Numbers (GTINs) and Global Location Numbers (GLNs) Unique identifiers for finished goods and raw materials as they move through the supply chain.

According to GS1, four key events should be given the most attention as finished goods, and raw materials move through the supply chain:

  1. 1.What product(s) were impacted?
  2. 2.When did the event occur?
  3. 3.Where did the product(s) come from? Where are they now?
  4. 4.Why was this process observed?

For more information about GS1 traceability standards – see Supporting the Pharmaceutical Supply Chain for DSCSA

Pillars of batch traceability

Figure 1:Pillars of Batch Traceability

Pillars of Batch Traceability

With the law already written, it’s up to partners to figure out how they’ll meet the requirements. To ensure this compliance can be met, four underlying pillars of batch traceability should be implemented one way or another.

  1. 1.Serialization – The ability to create unique identifiers for a product with multiple packaging options. This typically includes serial numbers, lot numbers, and expiration dates.
  2. 2.Track and trace – Like Serialization, track and trace is all about where a product has been and where it is now. This helps highlight any ownership changes, determine the original manufacturer, or track all movement throughout the supply chain, even if it hasn’t changed ownership.
  3. 3.Verification – The ability to verify where a product is or has been in the supply chain. This includes requirements to confirm specifics like serial and lot number, movement and transaction history, and more.
  4. 4.Reporting – The ability to report accurate information about serialization, track and trace, and verification to regulatory bodies as needed and required.

The ability to report accurate information about serialization, track and trace, and verification to regulatory bodies as needed and required.

These pillars are designed to work together to give you a more detailed view of the products in your supply chain, and lets you share that data with your partners, customers and more.

Final thoughts

Batch and item traceability doesn’t just help protect consumers from harm and keeps your company in compliance with regulatory bodies like the FDA. Batch traceability software lets manufacturers and distributors easily track every batch of product manufactured during a specific timeframe.

All said and done, a properly implemented track and-trace solution will allow you to fully trace finished goods and raw materials as they move through your supply chain from start to finish. Being able to track your products helps to prevent theft and counterfeit copies and makes sure your products remain safe for use. Tracing your products lets you closely follow and monitor every product in your supply chain, leading to fast, efficient returns and recalls, confidence in your products, protection of your brand, and more. A solution like Microsoft Dynamics 365 makes this all possible by providing a customizable system tailored to your specific business needs.

After 2023, track and trace won’t be an option – this will be a requirement if you want to keep doing business in the pharmaceutical industry. The sooner you have a system in place, the better.

Not sure where to begin? Contact us today to see how we can help.

The Importance of Supply Chain Visibility for Pharmaceutical Companies
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The Importance of Supply Chain Visibility for Pharmaceutical Companies
The Importance of Supply Chain Visibility for Pharmaceutical Companies 1449 1036 Xcelpros Team

Introduction

Today, many businesses rely on the supply chain to fill their shelves with products ready to sell, and pharmaceutical companies are no exception. To provide the fastest response time possible, pharmaceutical companies must have full visibility of the products in their supply chain, from when they are manufactured until they reach the store shelf. This can be a challenge, especially as many products come from outside sources and other countries. How can supply chain visibility help your business? Read on to find out!

The Modern Supply Chain

The supply chain has become more complicated and sophisticated with pharmaceuticals being regulated. Using an efficient, reliable supply chain directly impacts customer satisfaction, cost containment, and competitive differentiation. This is because customers want consistent quality drugs that work every time they are administered to patients. Pharmacists want to give their customers the cheapest possible medication while meeting their needs.

Pharmaceutical supply chains have changed in recent times to make this happen. For example, products go through various manufacturing phases, including research and development, before becoming end products. There are also numerous checkpoints along the way that include inspections by regulators.

Manufacturers need an accurate grasp of current production costs to accurately predict new drug pricing and minimize any additional expenses associated with these phases. The supply chain needs to be flexible enough to accommodate sudden changes in demand, raw material prices, and regulatory requirements. They also need to monitor operational metrics such as fill and inventory turnover rates so that all stakeholders know what is going on.

3 of the key features that define the modern supply chain are proximity, visibility, and sustainability.

  1. 1.Proximity – Proximity means cutting out middlemen who add cost and complexity to transactions.
  2. 2.Visibility – Visibility means being able to know where every product is at any given time.
  3. 3.Sustainability – Sustainability means paying attention not only to the natural environment but also how our supply chains interact with other industries (e.g., manufacturing) as well as social issues (e.g., food security).

One of the most important aspects of a modern pharmaceutical supply chain is visibility. If it was difficult or impossible to see where products were and how fast they were moving, there would be too much room for error. That is why good tracking systems are necessary for companies in this industry. One common solution includes scanning barcodes to keep track of items, but there are other ways as well depending on each company’s needs. Some solutions allow for locating materials anywhere in a warehouse using a radio frequency identification system (RFID). An RFID reader sends out radio waves from its antennae which causes tags attached to objects within range to reflect certain frequencies, causing them to stand out against other objects not tagged with an RFID tag.

Benefits of Supply Chain Visibility

Pharmaceutical organizations have found that supply chain visibility provides several important benefits, including greater data accuracy, lower inventory costs, reduced compliance risk, and increased business agility. With the help of insights from better visibility, they can identify potential problems before they happen. With this information, pharmaceutical industries can proactively solve problems before they cause severe damage to their organization. It has even been shown that well-managed supply chains lead to higher customer satisfaction scores and product reliability.

Increasing supply chain visibility offers a wide range of benefits for organizations today, including:

  • Increased data accuracy.
  • Improved process efficiency.
  • Lower inventory costs.
  • Reduced risks associated with compliance.
  • Enhanced agility to meet the needs of changing markets quickly.

That last point may be especially critical for pharmaceutical companies given the fact they stand to incur substantial penalties if violations occur during the supply chain process. All these factors make visibility an essential component not only to reducing risks but also to success overall.

With so many benefits, improving supply chain visibility should be a top priority for any company, regardless of its size or industry. The initial investment in implementing these changes will pay off handsomely in terms of financial benefits, brand protection, and positive impacts on both customers and employees.

Improving Visibility

Companies that maintain a high level of visibility throughout their supply chain will benefit from increased safety, lower risk of errors, reduced cost, and improved customer satisfaction.

In today’s digital world, there are many ways to implement visibility measures into your business practices. This can be done through computerized systems that track inventory and orders, barcodes, radio frequency identification (RFID) tags on products, or other innovative modern technologies. These systems can not only keep you informed on the location of your products but also allow you to detect theft, tampering, or defects in packaging before they get shipped out.

A proactive approach such as this is necessary to reduce the risk of having issues with faulty goods or health and safety hazards that could affect customers. It is crucial for businesses in the pharmaceutical industry where an error may result in death, injury, or permanent disability because it is important to ensure every step has been taken to provide quality assurance along the way.

Figure 1:Steps to be taken to ensure quality in the supply chain

Steps to be taken to ensure quality in the supply chain

  1. 1.Identify customer supply chain activities – Track customer shipments as soon as they are picked up and shipped in real time. Always have visibility on what has been delivered, where it is currently located, and any delays.
  2. 2.Utilize location-based technologies – Utilize the latest in GPS technology to monitor transportation so you can track deliveries from start to finish with ease. This will give you full control of your supply chain and alert you to any discrepancies immediately instead of having to search through multiple records manually later.
  3. 3.Use big data analytics tools – Leverage automated tools that provide a complete view of all activity across every part of your supply chain.
  4. 4.Share accountability with everyone involved – Make sure that everyone who handles or touches the product throughout its life cycle knows their responsibility at every step and is held accountable if there’s a problem somewhere along the way.
  5. 5.Understand global dynamics – Achieving visibility means understanding what is happening locally and globally and how international events may affect local ones (and vice versa).
  6. 6.Keep customers informed – Be transparent about what is happening throughout the entire process by keeping customers informed about shipping schedules and any issues that arise during shipment.

Finding the Right Solution

One of the biggest challenges in managing supply chain visibility is coordinating all parties involved. Creating and executing a plan can often be complicated with multiple stakeholders, especially when crossing borders or distributing products from different geographic locations.

Various software solutions and cloud-based platforms are available to help with these challenges, but companies must choose the right technology for their needs.

The following benefits should be considered before choosing a solution:

  1. 1.A single solution that integrates data across the entire supply chain.
  2. 2.An accurate view of each vendor’s location and inventory levels.
  3. 3.Work seamlessly with one another regardless of location or platform.

When considering which solution is best for you, it is important to evaluate your company’s goals and make sure that your decision will support them.

Your business may have specific needs related to planning and forecasting, inventory management, asset tracking or other capabilities. By determining what you want to achieve through supply chain visibility, you will be better equipped to decide about which product or service fits your company’s unique situation best. In some cases, implementing an ERP (Enterprise Resource Planning) system is ideal for connecting diverse systems, tracking assets on a global scale, and organizing all activities from sales orders to invoices.

Microsoft Dynamics 365, through its a combination of big data and analytics that are continuously updated, can provide valuable insights to help pharmaceutical companies achieve more supply chain visibility by assisting with inventory tracking, forecasting, customer insights and trade spend. By having these features readily available, a business can get the real-time visibility they need to gain insight into market fluctuations and improve their order fulfillment rate.

Microsoft Dynamics 365 offers benefits in automating complex processes such as invoicing, accounting, and sales analysis.

Some of the software’s inventory management capabilities make it an efficient way to manage many aspects of supply chain visibility. It is also good for tracking inventory distribution across multiple warehouses or stores in order to gain greater supply chain visibility. Plus, Microsoft Dynamics 365 offers deep insights into customer behavior which helps track competitive offerings and measure performance success by channel. Finally, Dynamic’s manufacturing features provide details critical to maintaining safe working conditions while reducing manufacturing costs.

In addition to providing information on order fulfillment rates and logistics processes, this type of system also improves control over manufacturing process timescales and provides alerts if any disruptions occur in any part of the system.

What’s Next?

The next step for most companies should be meeting with your partner to discuss supply chain visibility. At this point, an organized and ongoing audit process must be in place so you know what needs improving and where to go next. Once a plan has been created, it should be revisited at least once a year or when processes change, or the latest information becomes available.

A third party can play a role in this continuous improvement by bringing impartiality and objectivity. Continuous improvement will keep your company ahead of evolving regulations such as GDPR (General Data Protection Regulation), which means maintaining compliance and staying ahead of potential requirements by gaining valuable insights through accurate supply chain visibility.

Better supply chain visibility will also help you identify trends that lead to additional revenue opportunities, such as inventory obsolescence or potential overproduction. For example, if your sales team told you about reduced demand for certain products and gave feedback on how to address the problem, these insights could come from supply chain visibility. Ultimately, working with the right partner to achieve greater supply chain visibility will enable your company to thrive despite external pressures or changes to industry standards. Contact us today for more information to see how we can help your business grow.

Handling Different Types of Purchase Orders in Microsoft Dynamics 365
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Handling Different Types of Purchase Orders in the Microsoft Dynamics 365
Handling Different Types of Purchase Orders in the Microsoft Dynamics 365 700 500 Xcelpros Team

By the Numbers

  • $35.88: The minimum cost of a PO according to APCQ.
  • $506.52: The estimated maximum cost of a manual purchase order according to APCQ.
  • $53-$741: The average cost range of POs according to CAPS Research.
  • $60,000: APCQ’s estimated annual cost associated with manually producing purchase orders.

POs and the departments that approve them

  • 8%: No approval required
  • 21%: Finance
  • 52%: Budget owners
  • 84%: Supply management

Introduction

Today, purchase orders (POs) are the lifeblood of all companies, especially manufacturers. Being able to use POs properly helps in several different ways, including:

  1. 1.Simplifying the ordering process, making it easy to find approved items and place orders.
  2. 2.Aiding in budgeting by helping you determine how much you need to spend and how much you need to sell.
  3. 3.Enabling accurate planning by providing insights into company performance.
  4. 4.Warning of unexpected expenses when a PO is submitted, providing time to research it.
  5. 5.Confirming the quantity and price of goods bought or sold, eliminating miscommunication.
  6. 6.Providing legal protection against errors in quantities or unexpected price increases.
  7. 7.Controlling spending by limiting who can place and approve POs.
  8. 8.Tracking spending by providing details into where your money goes.
  9. 9.Helping manage vendors by seeing who delivers on time at the agreed price and who is late or constantly complaining.
  10. 10.Improving inventory management by telling you what should be arriving compared to what actually arrives.

Types of Purchase Orders

Most POs used today typically fall into one of four types. An automated purchase order system helps manage each of these types of POs.

1.Standard Used for one-time orders such as office furniture.

2.Planned purchase orders (PPOs)Typically lacking a delivery date and location, they are used for restocking items at irregular intervals.

3.Blanket purchase orders (BPOs), also known as “standing orders.”While similar to PPOs, they lack the known quantity and have uncertain delivery dates. Vendors may place limits on amounts so they can deliver.

4.Contract purchase ordersThey are used to set the terms and conditions for future purchase orders. Their primary function is ensuring a smooth ordering process.

The Disadvantage of Manual Purchase Order Systems

The job of a purchase order automation system is to send each PO to the appropriate staff member for review and approval. These systems leverage existing purchasing processes and rules to perform their jobs while protecting your business at the same time.

Modern automated systems often counter significant issues associated with older manual PO processes.

Figure: 1Disadvantages of an Manual PO System

Disadvantages of an Manual PO System

Compared to modern, automated systems, manually created POs tend to suffer from a number of drawbacks, including the following:

  1. 1.They’re less efficient
  2. 2.They’re paper heavy
  3. 3.They lack accountability
  4. 4.They open the company to security risks
  5. 5.They lack process regulation
  6. 6.They’re often time intensive

Using an automated system for POs in place of any older, manual processes results in a number of benefits, regardless of a company’s size:

  • Increased cost savings
  • Reduced human input error
  • More visibility into the PO process
  • Increased flexibility and control

Most importantly:

  • Improved process efficiency

Improving process efficiency is usually overlooked in a businesses day-to-day affairs, but this boost to efficiency is huge and provides a number of key benefits, including:

  • Significantly reducing the time between orders being placed and shipped.

And

  • Providing a verifiable audit trail so a manager wanting to know the status of a requested item can get a real-time view of the order. If a discrepancy occurs, the PO provides a written record.

Want to learn more about handling purchase orders in Microsoft Dynamics 365?

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Benefits of a Modern PO Management System

According to a recent Altametrics blog, purchase order management “is an in-house procurement process implemented by businesses to ensure that every purchase is required, accounted for, and augmented for costs. The purpose is to ensure workers follow all policies and procedures before fulfilling a purchase order.”

Using a modern automated PO management system ensures that all orders are created, approved, and dispatched according to current policies and procedures set in place by the organization. These systems exist to ensure that your company has complete control of its purchasing and can make quick adjustments in the event of an emergency.

Once generated, these purchase orders are considered a binding contract

  • Company A agrees to pay the stated price for the listed items upon delivery from Company B.
  • Company B agrees to provide the goods on time, and at the agreed-upon price, terms and conditions.

If any mistakes are realized, a modern PO management system provides a streamlined way to quickly resolve any discrepancies.

Properly managed POs:

  • Eliminate overpayments
  • Reduce damaged goods
  • Save time
  • Eliminate inefficiencies

Modern PO management systems start by examining a company’s current methods to identify bottlenecks and ways to improve efficiency. These systems can strictly adhere to existing procurement policies and procedures using simple guidelines. This enables shop floor workers to make requests converted into accurate POs.

PO management systems also help to organize existing information. For example, they can create a real-time vendor management database showing which companies are approved. This lets buyers know who they can deal with to get what they need and when.

Another tangible benefit is the ability for workers to track the status of any current POs directly. Instead of having someone else take time away from their duties to provide an update, workers can quickly log into the system and find out themselves.

The best PO management systems make it easy to create and track POs and share the information seamlessly with other departments when included as part of an overall Enterprise Resource Planning (ERP) solution.

Procurement and Dynamics 365 Supply Chain Management

One of our favorite ERP solutions is Microsoft’s Dynamics 365, a modular ERP system that includes asset management and procurement functions in its Supply Chain Management module.

Located in the Asset Management > Common > Procurement > Work order purchase requisition section, this software shows a list of purchase orders related to work orders. It also shows how the purchased goods are used for assets, maintenance jobs, spare parts, and work orders.

This module can be configured to indicate any potential delays. The system can generate notifications giving management teams different options to resolve the issue

  • Wait out the delay or
  • Find an alternate supplier.

As well, work orders, job orders and purchase orders can all be tied to each other through the Supply Chain Management module. The end result is visibility:

  • Purchasing knows what items are in the pipeline,
  • The warehouse knows what is coming,
  • Production knows when the materials it needs will arrive, and
  • Sales knows when customers can expect delivery of their finished goods.

Note: Click here to see how to create a purchase order in Dynamics 365 Supply Chain Management.

Dynamics 365’s Supply Chain Management module also lets you control other aspects of the purchase order process. It provides a number of critical business functions, including creating purchasing policies, product receipts and invoices, and more. More than just a PO management program, Supply Chain Management also has direct ties to rebates, production controls, service management, transportation, warehousing plus sales and marketing.

By providing everything from an overhead view of your entire supply chain to the status of an individual PO, Supply Chain management provides companies of any size with the information they need to control their inventory.

The Bottom Line

Purchase orders continue to be an integral part of all businesses. Continuing to enter this data manually—and trying to keep track of it all on paper—makes the process cumbersome and prone to mistakes and expensive errors.

An automated PO management system, like that included in Microsoft’s Dynamics 365 solutions, helps reduce the number of manual inputs, ensures only permitted vendors are used, and simplifies the approval process, even automatically approving smaller purchases, debiting them to a department’s budget, or forwarding them to the correct department for approval.

Connecting this PO management system to your overall inventory control system is one of the best ways to ensure you always have the right materials on hand to meet your production and sales goals.

Best techniques for tracking and managing raw materials
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Best techniques for tracking and managing raw materials
Best techniques for tracking and managing raw materials 700 500 Xcelpros Team

At a Glance

  • 18% – The hike in the Raw Material Price Index from 2020-2021 with at least another 10% hike expected.
  • 60% – The increased amount of raw materials extracted, harvested and consumed since 1980.
  • 117% – The increase in raw materials costs for non-food agricultural materials since 2000.
  • 359% – The cost increase in rubber since 2000.
  • 62 billion metric tons – The amount of raw materials used per year in 2008, an 8-fold increase since the early 1900s.

Introduction

Today, manufacturing relies heavily on the ability to acquire raw materials, both directly and indirectly. Examples of direct raw materials are the chemicals, textiles, minerals and other components that become finished products. Indirect raw materials are components added to other parts that together make a finished product. Accurate tracking of these materials is a good way to determine if a company flourishes or fails. Both of these material types are listed as current assets.

Tracking raw materials typically starts when they enter a warehouse. Their value is calculated from the start of a given time and adding costs such as storage, shipping, processing and labor to determine total value. Before you can build, mix or blend your products though, you have be sure to acquire them. Obtaining the essential materials you need to create your products is the end result of an involved process.

Obtaining Raw Materials

One of the first things to do before you start acquiring raw materials for your products is sufficient planning. Raw material planning can be used to determine how quickly you use each item, but only once you understand your inventory turnover rate – the number of times you use your raw materials.

In a previous post, we stated that “Materials planning is the method used to determine the requirements and quantities of raw materials to implement production.” If you don’t have enough raw materials on hand, you can add delays to your production schedule, or even lose orders altogether. If you keep too many materials on hand, there may not be enough budget available for other projects, like capital improvements.

A critical part of materials planning is understanding lead time: how far in advance do you need to place orders with your suppliers to get what you need in order to satisfy your customers?

Being sure you can order what you need requires a procurement management plan that, “defines requirements for a particular project and lays down the steps required to get into the final contract,” including raw materials.

This plan sets and defines everything you need to manufacture your products: what to buy, who to buy it from and how much you’ll pay. This includes determining purchase costs plus delivery and storage costs, also referred to as inventory costs. Placing an order, or receiving one from a customer, often uses an order management plan.

If your departments are unable to report how much of a given product, or the raw materials required in the process, are on hand, entire orders can be lost. When production tells sales one thing, but inventory says something else, the end result can be chaos. This is where accurate, frequent, communication that tracks the flow of raw materials through the entire acquisition process becomes critical.

Inventory Management

“Inventory management is important to small businesses because it helps them prevent stockouts, manage multiple locations and ensure accurate recordkeeping. An inventory solution makes these processes easier than trying to do them all manually.”

A chef can make a large salad using a full head of lettuce but only a teaspoon of spices. Managing inventory is often similar: A manufacturer is likely to have some items they use in large quantities, such as active pharmaceutical ingredients (APIs). Equally important are the catalysts and other chemicals bought in much smaller lots. Like a chef making a salad, without their ingredients, they don’t have a product.

Inventory management not only tracks what you have on hand, it also looks at your supply chain: making sure you have options for getting what you need when you need it. One part of inventory management is getting your basic supplies: making sure your customers receive their finished products when they need them is another. Having viable shipping options to ensure your merchandise arrives on time means gathering even more information and constantly updating your options. A common option used by a large number of companies, especially retailers, is vendor managed inventory.

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Vendor Managed Inventory

Commonly referred to as VMI, vendor managed inventory is when a company lets its suppliers determine the amount of product a company has in stock. If you walk into a grocery store you might see people who are not market employees stocking shelves. These are vendors – these employees track inventories, place orders, monitor shipments and stock shelves.

According to American Express, benefits of a VMI include:

Figure: 1Benefits of Vendor Management Inventory

Example of a Barcode

  • Improved efficiency You have the right quantities on hand to meet your needs without going overboard and having too much or too little.
  • Cost reduction Having accurate inventories means few if any disruptions to sales, thereby providing better customer service.
  • Reduced complexity Depending on your products, you may be able to reduce the number of vendors. The result is a predictable and reliable inventory schedule.
  • Data insights Your supplier can anticipate demand, helping you prepare for seasonal and market-driven trends.

Working with a single VMI has some negatives as well as positives. Three of the biggest challenges, according to AmEx, include:

  • Loss of control Someone else determines what products you have and therefore what you’re able to sell. Using a VMI also means an outside company has access to your private data. Data security can be a major issue, especially when you first start working with a vendor.
  • Limited options It’s tough to make a fruit salad when the only fruit available is an orange. Your product choices may be limited and you might become dissatisfied if your vendor fails to deliver at the best price.
  • Market agility Working with a single vendor reduces your ability to pivot when markets change. For example, some whiskey manufacturers were having problems selling their goods when the Covid-19 pandemic took hold. A few of the more enterprising companies were able to switch from making whiskey to producing alcohol-based hand sanitizer. Using a VMI might eliminate this flexibility to quickly change in response to market conditions.

Looking at your options and picking the best ones often comes down to software. Managing your raw materials and inventory accurately, especially when your company is growing and has distant suppliers, generates a lot of data. Managing this vast amount of data requires capable software.

Software Options

Depending on your needs, two types of software can help with your raw materials management, inventory management, order management, procurement management, stock management and resource planning needs:

  1. 1.Customized products designed to perform a specific function for a single industry with a company at a particular size. If your company is unlikely to grow, one or more of these products might be perfect for your needs. Using this type of software, you will likely need one product for each requirement. This is likely to mean using several different providers, potentially creating data exchange roadblocks. A second option offers greater flexibility, the option to handle many of these needs in a single package while also growing with you.
  2. 2. A modular Enterprise Resource Planning (ERP) product such as Microsoft Dynamics 365 Supply Chain Management is a large, versatile product capable of helping you track inventories from far-flung suppliers into, through and out of your warehouse. Microsoft Dynamics products are based in the cloud and offer added data security since they’re built on Microsoft’s Azure platform. Modular systems let you add sections when needed while maintaining constant communication between the modules. Using a system from the same company also ensures constant data flows, reducing inventory data errors.

The Bottom Line

Especially today, managing raw materials accurately requires a lot of work and attention to detail. Errors at any stage of the process – from ordering to shipping, storing or using – can result in expensive repercussions.

Finding the right software solution means evaluating your current and future inventory needs. What do you need now? Will solving today’s problem also work in 1-5 years or will it require an expensive overhaul?

The bottom line is that you should consider an investment in a modular product that can grow with your company over time, and not one that becomes obsolete the minute you expand.

Effectively-Tracking-and-Controlling-Inventory
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Effectively Tracking and Controlling Inventory
Effectively Tracking and Controlling Inventory 700 500 Xcelpros Team

Introduction to effective inventory management

Especially today, manufacturers, wholesalers and retail businesses from several different industries share several standard business practices, with inventory management at the top of the list.

An efficient, capable inventory management system can distinguish between struggle and success. Any boost to the efficiency of managing your inventory can result in a significant return on investment. To drive the effectiveness of your inventory management, especially when if you’re just getting started, it helps to pay attention to 10 popular techniques:

1.Fine-tune your forecasting Accurate forecasting is a must unless you want to either tie up precious capital in product stuck on warehouse shelves or be unable to meet your customers’ orders.

2.Identify low-turn stock Have a flexible ordering approach that, combined with accurate forecasting, lets to adjust inventory based on customer priorities.

3.Regularly audit your inventory Knowing—not guessing—what you have at any given moment lets you adjust ordering to ensure a balanced inventory.

4.Track stock levels You want to track all inventory from the moment you purchase raw materials or components to when you deliver finished goods to your customer’s door.

5.Keep track of your equipment Especially in a production plant – Knowing what you have, how quickly it wears and when to schedule repairs for optimal life ensures uninterrupted production runs.

6.Verify Quality Ensure all items in your inventory meet your quality control standards, ideally from the moment they arrive.

7.Categorize inventory based on customers needs Ensure you have the most sought-after products in stock at all times, working your way down the line to the least popular products.

8.Consider drop shipping This is much quicker especially for any items you don’t make yourself, especially when it becomes part of your product. An example is a Siemens ® controller for industrial machinery.

9.Rotate your stockTurn your stock so the oldest items are sold first This is especially true for pharmaceutical products with comparatively short shelf lives.

10. Use good inventory management software A viable program that meshes with your financial and sales software helps keep everyone informed, making for happier customers.

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Figure 1:Common inventory management challenges

Common inventory management challenges

Common Inventory Management Challenges

Among the most common inventory management challenges that can affect a number of different businesses are the following:

  • Inconsistent tracking Working with older software that relies on manual data entry opens a company to data entry errors. Mistakes are bound to happen when different departments use different spreadsheets to input the same information.
  • Inaccurate data Companies need to know how much of everything they have on hand and in the pipeline. Without accurate information, you won’t be able to track your production. This can be a massive problem if you’re still manually entering data.
  • Order management Manufacturers often live on the edge of logistics, struggling to make sure deliveries are going out just in time – right before their customers need them.
  • Juggling a complex supply chain Manufacturers need alternate ways of obtaining raw materials and shipping finished products. For example, your primary port is running behind because dock workers are sick. How do you get what you need when you need it?
  • Communications and planning Intercompany communication is critical, especially in a world where companies often have business units in different countries, keeping everyone focused on the same task can be difficult.
  • Robust competition In every industry, competition is ready and willing to grab your customers when you make a mistake or find yourself unable to deliver on time and within budget.

These are a few examples of the challenges faced by modern manufacturers. Thankfully, the good news is that modern ERP solutions can be a huge help when it comes to addressing these issues.

Inventory Management Software As a Solution

Several inventory managements programs available on the market today that focus not only on addressing these challenges, but also by identifying potential issues before they can impact your operations. Some of the best solutions available, like Microsoft Dynamics 365 Supply Chain Management, can seamlessly integrate with your existing software, reducing data silos, allowing different departments to share more information. Instead of requiring three departments to input the same information into a database, each group is able to provide material unique to their specialty.

Effective inventory management programs like Microsoft can print barcodes and QR labels. When these codes are scanned with a hand-held reader or cellphone, users can be rewarded with a wealth of information. The most critical data to track are precisely how much of any product you have, where it’s being stored, and what it will be used for.

For example, you need to produce 20,000 doses of a Covid-19 treatment. Your customer needs them yesterday but will settle for next week. Do you have enough raw materials on hand to meet your customer’s deadline? If not, what can you do to obtain what you need?

Using this information wisely lets management develop complex plans, like the ability to track everything from small lots to pallet loads. A company can learn by checking an item’s progress at different points—its arrival at the warehouse, use in production, loading onto a truck or ship, and delivery to the customer. By examining reports, you can identify potential delays or roadblocks and find ways to speed up delivery.

Supply chain management software on a secure cloud computing platform like Microsoft’s Azure let’s you communicate securely and safely with other researchers, salespeople and vendors. With Azure, you’ll know that your intellectual property and contracts are safe from competitors.

Boost Decision Accuracy with Power BI

With today’s supply chains – seemingly constantly in a state of upheaval – effective inventory management that goes beyond tracking stock on hand is critical to operations. Effectively managing your inventory and raw materials ensures you’ll have the materials you need when you need them. It means having more than one source of supplies and materials. It also means constantly checking with vendors to ensure you have the goods to meet your own delivery deadlines. This is where an integrated business intelligence solution comes into play.

Microsoft Power BI let’s you connect to hundreds of data sources, preparing reports you can easily share. You can confidently deliver interactive messages to customers using information from inside and outside your company. Inventory planners can be warned of potential shortages in time to find alternate supplies. Salespeople can be told of possible delivery delays caused by outside forces, giving them time to ask the customer if they want to use a different shipping method.

Accurate business intelligence at your fingertips puts you ahead of competitors stuck using their “tried and true” methods that are becoming increasingly worthless every day.

Final Thoughts

Effective inventory management comes down to data: knowing what you have and where it is.

A modern inventory control system that supports labels and barcodes lets you track raw materials, work-in-progress and finished goods simultaneously, with high accuracy.

An inventory system with business intelligence helps you find faster and alternate ways of obtaining raw materials and pre-made products, mainly when shipping delays occur. That information can help you get your products to your customers when needed, balancing everyone’s inventory.

How To Enhance Your Chemical Supply Chain
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How To Enhance Your Chemical Supply Chain
How To Enhance Your Chemical Supply Chain 700 500 Xcelpros Team

At a Glance

  • Today’s chemical industry is all about enhanced visibility and accountability.
  • Dealing with varying laws and regulations for different regions, fluctuating and lack of visibility across the board requires advanced solutions.
  • Integrating advanced technologies can reduce waste, unearth new products, find new markets and enhance a company’s status.

Change in Operations

Chemical companies, especially pharmaceutical companies, are seeing an increase in the need for global reach.

Since its first discovery, the effect Covid-19 has had on supply chains has been severe, regardless of product. As with many problems, this disease has also created numerous opportunities, especially for the chemical industry. Major companies continue to expand operations, delivering their products worldwide, including former “third world” countries with a growing thirst for everything from antiviral medications and cleaning products to beauty supplies.

“The chemical industry touches nearly every good-producing sector, making an estimated $5.7 trillion contribution to world Gross Domestic Product (GDP) through direct, indirect and induced impacts, equivalent to seven percent of the world’s GDP, and supporting 120 million jobs worldwide.” Source: The Global Chemical Industry

This data from the ICCA shows a considerable market share, making it safe to say that the chemical industry is looking at a secure future. Globalization, however, requires dealing with unique challenges and roadblocks, especially regarding the movement of chemicals from supplier to producer and consumer. Today’s supply chain management won’t work in silos. That idea is no longer sustainable or feasible. Today’s global marketplace requires expanded thinking, and that means going digital.

Today, planning a chemical supply chain means using effective, profitable methods where customers, suppliers, parts vendors, shippers, sales and production facilities are connected, regardless of their physical locations. Modern software like Microsoft Dynamics 365’s suite of modular programs can help chemical companies use modern digital methods and enhance the operational efficiency of their supply chain.

In this article, we will look at some of the key supply chain challenges in the chemical industry today and how technology is playing a key role in enabling forward-thinking companies prosper.

Top Challenges in Chemical Supply Chain

Every company has its own set of challenges, such as the size of the company, the locations of its manufacturing units and the structure of its supply chain. Regardless of an individual firm’s situation, all chemical manufacturing companies face common supply chain issues.

Typical chemical industry supply chain challenges include:

  • Distributing chemicals and related raw material in different countries. Companies struggle to keep up with the laws and regulations of varying regions. What’s safe and acceptable in one country may violate worker safety laws in another. This is especially true when it comes to hazardous chemicals.
  • Existing chemical supply chain management can fall prey to manual errors and miscommunications, causing potential safety hazards and monetary loss.
  • The bottom line often depends on a company’s ability to source raw materials. When prices for essential materials fluctuate, the entire supply chain can be affected.
  • Tracking material pricing and delivery details create a lot of data. This includes information regarding the chemicals, their compositions, material pricing, safety precautions, distribution lists, and more. Managing this information is a top concern for chemical supply chain managers.

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Figure: 1 Supply Chain Challenges in Chemical Industry

Supply Chain Challenges in Chemical Industry

3 Ways Technology is Reshaping the Chemical Supply Chain

01.Technology Enables Creating a Connected System

Today’s world is much more connected than it used to be. Systems are linked with smart devices, modern sensors and powerful software running it all. With these sophisticated enterprise resource planning systems in place, it becomes much easier to organize your chemical company’s supply chain. Modern systems can generate an alert when a violation occurs. These automatic alerts reduce manual errors or oversights.

A connected ecosystem provides top-to-bottom visibility in the supply chain, giving top-level decision-makers a clear picture and greater transparency across the board. This enables better accountability and the ability to find solutions to common problems and bottlenecks.

Figure: 2 New Technologies in Supply Chain

New Technologies in Supply Chain

02.AI Helps Create a Failsafe Supply Chain

Chemical supply chain management is highly susceptible to changes in prices of raw materials. To stay ahead of the curve, companies need to stay up to date on global, as well as regional changes to predict how these changes will impact their supply chains.

Artificial intelligence(AI) enabled solutions can analyze data in real-time, letting decision makers know what is likely to happen, how it will affect them and most importantly, what they can do to avoid or reduce any impact. This software can help these companies make necessary modifications to their supply chain strategy on the fly.

03.Using Cloud Computing to Manage Supply Chain Data

Data collation, cataloging and analysis, are intricate tasks. When performed by people, they can be prone to manual errors. However, with progressive technological tools like Microsoft Dynamics 365 Supply Chain Management, companies can store unlimited data and analyze it much more efficiently. This categorized and analyzed data can be leveraged to generate insights that help fortify the company’s supply chain for smooth transitions and better efficiency.

Supply chains are the backbone of many industries. The chemical industry needs to adapt to changing times, and make use of the right technologies to harness maximum benefits.

Key Takeaways

Like any industry, the chemical industry is witnessing the need for change in its supply chain model. With the help of cutting-edge technological tools and applications, chemical supply chain management can be overhauled and optimized for enhanced efficiency. Is your supply chain ready for a change?

References: Chemical Supply Chain: Challenges and Opportunities in the Era of AI

supply chain disruption management
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How to Manage Operations During Supply Chain Disruptions
How to Manage Operations During Supply Chain Disruptions 700 500 Xcelpros Team

Introduction

Even today, Covid-19 continues to disrupt every level in supply chains, across every industry around the world. The lasting effects on supply chains was unanticipated, especially concerning food and cleaning supplies. Manufacturers in those areas had an unexpected spike in demand that couldn’t be managed quickly.

The overall supply chain disruption caused many companies to start re-evaluating action plans. Areas being closely examined today include production capacity, cash flow and overall employee morale.

Let’s look at how businesses can leverage existing practices while pivoting to newer methods and meeting evolving customer needs.

Figure: 1Surviving the Supply Chain with a Digital and Analytical Backbone

Surviving the Supply Chain with a Digital and Analytical Backbone

Communication and Collaboration

The first quarter of 2020 brought new dynamics to manufacturers and distributors everywhere, faced with a challenge the likes of which have never been seen before. As market dynamics changed, internal communication became critical at every stakeholder level: management, employees, customers, suppliers and vendors. Creating a communication strategy that could work when people stopped meeting face to face became vital to avoid business breakdowns and shutdowns.

That was 2020. The lingering effects of Covid-19 are still impacting some companies’ technology roadmap plans. However, there are ways to drive innovation and growth. Regardless of industry, many organizations realize the importance of doing business from anywhere. That flexibility to work on the move is no longer a luxury: it is a necessity. Unconventional work schedules are becoming more common as companies adjust to meet customer expectations. Companies are engaging them with messaging and video call software such as Microsoft Teams. They use software such as Power Automate to deploy safety alert messages whenever the need arises.

Customer and vendor portals equipped with Microsoft Dynamics 365 Supply Chain Management let companies collaborate, determine product access and make accurate forecasts without having to pick up the phone. Instead of days or weeks of delays, modern software helps firms resolve supply chain disruptions at a moment’s notice.

Manufacturers using Microsoft Dynamics 365 Supply Chain Management can integrate Internet of Things (IoT)-enabled devices and robots into their current operations. Using machine learning adds even more automation.

Connecting data and processes with Microsoft’s wide selection of products allows production and maintenance teams to schedule downtime when it has the least impact on production. Outlook messages and alerts let production staff stay on top of any possible repair issues.

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Agile decision making

Manufacturers must respond to the rapid changes in customer demands and delivery expectations. Having a robust system lets that happen.

Changes to your customers’ business demands can affect your supply chain. Having the ability to act quickly while still providing exceptional customer service is critical to future business success.

One way to prepare for these changes is by having internal cross-functional teams practice scenario planning. For example, they can plan what to do if a new Covid-19 variant appears and governments reinstate drastic safety measures.

Scenario planning lets your staff learn what to do when normal deliveries are delayed or rerouted, such as what happened when the Suez Canal was blocked for a week. It lets your staff examine past customer and supplier behaviors and come up with plans to minimize disruptions using what they learned.

Microsoft Dynamics 365 Supply Chain Management includes tools designed specifically for scenario planning. It helps companies adjust to unexpected changes in their supply chains. These tools include:

  • Drag and drop Gantt charts for production scheduling
  • 360 degree view into capacity, identifying bottlenecks in terms of people and resources
  • Adjusting safety stock to reflect real-time demands instead of fixed quantities
  • A vendor portal with approved suppliers listed in a supplier resource management database that includes purchase order controls
  • Visibility into warehouse operations for single and multi-site facilities
  • Transportation management
  • A customer portal with sales order management

Incorporating Data

Data in today’s operations is a moving target. Making decisions and providing insights with real-time information helps companies operate efficiently, letting them grow and scale at the right times. Identifying organizational segments that require optimizing, like the handoffs between operations and finance, can only occur when accurate information is available.

For example, the only way to truly analyze cash flow—to get a 360-degree view—is by looking at data within each division.

This is where a business analysis tool like Power BI becomes an essential part of the process. Power BI dashboards using predictive analytics in the Dynamics 365 environment automatically update with the latest data. These dashboards let companies monitor the status of multiple locations at once, saving time.

Tools such as Power BI let management share data, communicate and respond to changes in the market within minutes, not days.

Final thoughts

The coronavirus is the first disruption of its kind faced by this generation. Companies were caught unprepared, being forced to adjust almost instantly to upheavals in their supply chains. Having the right tools in place to deal with Reduced workforces internally and within the supply chain, pivoting production to new products and unprecedented customer product demand helps determine who flourishes and who fails.

With that in mind, it’s critical to consider implementing products from Microsoft’s family of partner solutions. Dynamics 365 and related products help companies predict and manage their operations transparently.

References: Why the Pandemic Has Disrupted Supply Chains (whitehouse.gov)

How Sustainable Operations Helps Manufacturers Grow
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How Sustainable Operations Helps Manufacturers Grow
How Sustainable Operations Helps Manufacturers Grow 700 500 Xcelpros Team

Introduction

Every business leader has heard the term “sustainable manufacturing,” but not all know that practicing methods that help the environment can also grow their business.

“Sustainable manufacturing is the creation of manufactured products through economically-sound processes that minimize negative environmental impacts while conserving energy and natural resources,” the United States Environmental Protection Agency states. These same practices enhance employee, community and product safety in part by producing less waste that pollutes the air, water and soil.

According to the EPA, companies that use a methodical, planned approach to sustainable manufacturing processes:

  • Increase operational efficiency by reducing costs and waste
  • Respond to or reach new customers and increase competitive advantage
  • Protect and strengthen brand and reputation and build public trust
  • Build long-term business viability and success
  • Respond to regulatory constraints and opportunities

Fostering Growth

These environmentally friendly sustainable manufacturing practices help companies grow by reducing production costs long term. For example, instead of paying thousands of dollars each month to an electric company to light and cool a 300,000 square-foot manufacturing plant, consider covering a flat roof with efficient solar panels.

The average payback time for a home solar electric installation (industrial estimates were not available) is roughly 6-10 years, though it varies depending on the climate and other factors. Solar panels also tend to last 25-40 years meaning roughly three-quarters of their useful lives is spent generating free electricity. The most recent designs are much more efficient, producing more power in a smaller size, than those made 10 years ago. The result is greater efficiency, allowing manufacturing facilities to cover less of their roofs while producing as much or more power than the older models.

Production plants can also reduce their massive electrical bills with skylights. The waterproof domed coverings help illuminate work areas, reducing the need of electric lighting. Extended exterior shelves can reduce sunlight, cutting cooling costs.

Figure: 1 Sustainable Manufacturing – a Big Picture

Sustainable Manufacturing - a Big Picture

Turning Trash Into Treasure

Other sustainable methods look at ways to reduce waste, especially by converting some “trash” into new products or using it for new methods.

One website alone lists 35 artful ways homeowners can recycle wooden pallets. These new uses include making tables, bed frames, stairs, mounting frames for heavy electronic display monitors and a host of other uses. Many of these same methods work for industrial companies in terms of outfitting conference rooms and other non-work areas.

From an industrial perspective, worn pallets can be repaired, cleaned and reused. They can also be sold, recouping some of the cost. Other uses for worn pallets include chipping them, turning them into wood pellets. The pellets can then be burned, generating heat and electricity.

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Cascading Chemicals

Recycling is a large part of the sustainable “green” economy. Industrial chemicals can be recycled. They can also be reused through a process known as “industrial symbiosis,” greenbiz.com states. One example cited uses ferric chloride, which is a byproduct of steel pickling in hydrochloric acid, to treat water.

“Frequently, recycled chemicals are not only cheaper than newly produced ones, but they also reduce resource consumption, waste generation and greenhouse gas emissions. The carbon emissions through solvent recycling are 46 percent – 92 percent lower than those of new solvent production,” the website states.

When the article was written in 2019, industrial giants Siemens and Evonik were conducting research to convert the most common greenhouse gas—carbon dioxide (CO2)—into common industrial chemicals such as ethylene.

Other methods used to reduce chemical and industrial waste cited by greenbiz include swapping what might be one manufacturer’s trash with a different nearby business. That business can use these materials in its products.

Another environmentally friendly industrial method is “leasing” chemicals. In this model, a manufacturer sells the functions performed by the chemical using functional units, not the chemicals themselves.

Large manufacturers with their own wastewater treatment plants can redesign those facilities in ways that help the company turn a profit and grow. Companies interested in practicing sustainable manufacturing practices can modify existing equipment to produce energy, clean water and chemicals because, “the future of sewage is power and profits.”

The greenbiz.com article ends with a quote made in 1848 by the former president of the London Royal College of Chemistry, R.W. Hoffmann: “In an ideal chemical factory there is, strictly speaking, no waste but only products. The better a real factory makes use of its waste, the closer it gets to its ideal, the bigger is the profit.”

Technology Can Spot Opportunities

One way a company can practice sustainable operations management is by using its data wisely. Especially in forward-thinking firms that use internet of things (IoT)-enabled devices, they have access to mountains of information.

Combining a well-thought plan with the right software lets these firms look at everything coming into their warehouse—including packaging—as potential profit sources. Enterprise resource planning (ERP) products such as Microsoft Dynamics 365 and its Supply Chain Management Module let companies of any size keep accurate track of their inventories. Add in the Integrated Chemical Management component and chemical manufacturers have an accurate label management solution that also produces safety data sheets.

By understanding the chemicals involved and working with sustainability experts, plant managers can evaluate their current conditions.

Executives interested in sustainable production and consumption—and being more competitive—will want to ask questions similar to these: What current waste products and materials can we use for secondary purposes or repackage and sell to someone in a different industry? Can we reuse packing materials we receive to pad and protect outgoing shipments? Are we using our raw materials effectively or are there ways we can become more efficient? How much power do our plants use? Are there affordable ways of reducing that consumption while also generating some of our own power all while meeting our long-term business goals?

Asking questions like these, and then using powerful software to find the answers, help innovative firms generate more money. That in turn can use sustainable practices to fuel growth.

The Bottom Line

Sustainable manufacturing involves looking at everything a company has, from a different angle. More office employees are working from home, freeing up space. Can we use that space for a different purpose instead of looking at empty desks? Can we move items around and expand our production facilities or our warehouse without having to build or buy new facilities?

Operations managers wanting to fuel growth by reducing power consumption can use ERP software to find ways to save money and new ways to make money. All it takes is a little outside the box long-range thinking.

Challenges in Pharmaceutical Supply Chain due to Covid-19
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Pharmaceutical Supply Chain Challenges due to Covid-19
Pharmaceutical Supply Chain Challenges due to Covid-19 700 500 Xcelpros Team

Introduction

Even while the United States and much of the world continues to vaccinate and protect its citizens from COVID-19, new variants of the disease continue to pop up around the world. Since its arrival, not only have millions of lives been lost and affected, problems caused by the disease continue to wreak havoc on the pharmaceutical supply chain.

As of May 2021, Google states nearly 3.4 million dead in 220 countries and territories worldwide, including over 587,000 in the US alone

Some of the more prominent short-term effects cited in a July, 2020 article on Springer include

  • Demand changes leading to shortages caused by panic-buying oral home-care medications
  • Supply shortages of active pharmaceutical ingredients (APIs) and finished products, especially those coming from China and India
  • Shifting communications and promotions to telecommunication and tele-health, resulting in a 70 – 80 percent drop in visits to physician offices and clinics
  • Change in the focus of research and development programs to dealing with COVID-19

More Long-lasting effects include:

  • Delayed approvals for non COVID-related pharmaceutical products, partially caused by the closure or semi-closure of regulatory agencies
  • Self-sufficiency and lower demand for APIs and finished products made in China and India caused by delays in manufacturing and disruption to shipping and logistics
  • Organization growth impacted by economic slow-downs around the globe
  • Ethical issues from poorly researched clinical therapies and products
  • Drastic change in consumer use of cleaning and health products

By the Numbers

  • 2x increase in investigational treatments in the U.S.
  • 100% – 700% increase in the use of medicines to treat COVID-19 in U.S. hospitals (January-July 2020)
  • Upwards of 24 million excess prescriptions have been written in the U.S. alone, for things like hypertension, mental health issues, respiratory problems, diabetes, and anxiety.
  • 156 clinical trials for COVID-19 in the Middle East and 140 in the EU
  • 70%-80% reduction in patient visits to doctors’ offices in the EU
  • 23% of patient interactions in the EU are now being done online

Source: Springer.com

Supply Chain Effects

A recent report by Deloitte about the impact of COVID on the pharmaceutical industry includes a look at Supply Chain Management. The report cites a number of key risks to be aware of in different functional areas, including the following

Procurement

  • Quality checks of received materials. Mitigation measures include increasing warehouse space for quarantining shipments from China.
  • Shortages of raw materials, APIs and solvents due to dependency, inadequate materials to complete BOMS/batch size processing. Prevented by boosting stocks of critical inventory, evaluating alternate sourcing of impacted materials and using government support policies when looking at investments in production plants.
  • Shutdowns of vendor plants. Solved only by identifying shutdowns from remote (i.e., Asian) sources and pressure testing supply chains for various scenarios.

Planning

  • Expiration of materials and monitoring for reassessments and quality certificates where the solution is submitting studies to the FDA with the longest agreeable expiration date.
  • Shutdowns from contract manufacturers, requiring sufficient communication regarding their ability to deliver products.
  • Additional quality control checks for contamination issues. This can be mitigated by having quality control personnel on-site and thorough sanitizing of all in-bound products, employees and equipment.
  • Contamination after final packaging. Requiring the disinfecting of shipments before delivery, possibly with photographic proof.

Transportation and logistics

  • Non-availability of local transportation to move raw materials and finished goods. Can be solved by locating alternate partners and getting approval to move essential drugs should a lockdown occur.
  • Contamination issues related to transportation or vehicles. Requires the disinfecting of all vehicles, plans for properly storing temperature-sensitive products in assigned warehouse space.

Export

  • Contractual compliance. This can be mitigated by ensuring the person collecting the order is aware of any regulatory restrictions.
  • Contractual terms with domestic and export customers. Preventing this requires seeking advice from insurance brokers and engaging early with clients to determine what could work if supply chain or personnel issues occur.

Figure: 1Pharmaceutical Supply Chain Areas Affected by Covid-19

Supply Chain Effects

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Lasting Effects

The effects from COVID have caused businesses to do whatever necessary to stay competitive, such as the repurposing of disposable components from single use systems to use in COVID-specific programs at the expense of other critical efforts. This is just one of the continuing effects on the supply chain cited by Contract Pharma in a recent COVID-19 Impact Report, as well as the following pointed out by other executives in the industry.

  • Kay Schmidt of Catalent said finding vaccines and target therapies for Covid-19 has boosted demand for their services. The increased demand, “has led to greater collaboration and innovation between partners, regulators and throughout supply chains to meet key milestones”. This boost to business requires additional planning and communication to ensure resource allocation for multiple programs.
  • James Rogers of Sterling said, “The impact of the global pandemic has exposed the fragility of the pharmaceutical supply chain.” He predicts that supply chain resilience and reliability will be given the same importance as price when developing future supply strategies.
  • Danita Broyles of U.S. Pharmacopeia is quoted by Contract Pharma as saying, “the decrease in on-site inspections has the potential to increase quality risks to the global supply chain,” adding pressure to manufacturers and suppliers to ensure the quality of their products.
  • Ben Wylie of ChargePoint Technology said that, “many governments are now pushing the industry to rethink its model to safeguard drug production.” He cited a program in India to reduce reliance on China for critical drugs and APIs.

Final Thoughts: The Impact of COVID-19 on Regulatory Practices

COVID-19 will continue to have an ongoing impact on regulations in the areas of clinical study trial design, clinical trial study development and post-clinical trial regulatory submissions, Dr. Ronan Brown of IQVIA wrote in an article on European Pharmaceutical Review.

Among the changes forced on drug manufacturers includes a more decentralized approach to collecting patient information and rapid access to regulators, Dr. Brown said. This includes pre-investigational new drug meetings with the FDA now granted in less than 30 days. The FDA has also taken steps to accelerate the review and start of new studies.

Flagging potential obstacles and safety concerns during these early meetings lets pharmaceutical companies move faster into human trials, he explained.

Decentralized clinical trials, which he expects will ultimately cost about the same as the traditional versions, will offer greater diversity in terms of patient cohorts along with increased mobility and convenience.

The Road to Success Implementing Microsoft Dynamics 365
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Jump-starting resilient and reimagined operations
Jump-starting resilient and reimagined operations 700 500 Xcelpros Team

Jump-starting resilient and reimagined operations

Based on a wonderful piece from our friends at McKinsey, describing the effort needed by businesses moving forward after COVID disruptions. A reminder that businesses able to maintain a certain level of speed during the transition can create a significant long-term advantage.

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