Report: Pharma supply chain has 'safety stock'
31 March 2020
Transport Intelligence has produced a white paper analysing the impact of coronavirus on the pharmaceutical supply chain.
While the pharma supply chain has been disrupted by the coronavirus crisis, particularly given that many pharmaceuticals are manufactured in China, the supply chain remains quite robust.
The Report says: “The high levels of inventory which exist in the pharma supply chain (typically 180 days plus) should mean that the disruption is kept to a minimum. While other sectors rely on supply chain agility (a combination of visibility and velocity), the pharma sector has hedged against risk by building large inventories. This should prove effective as companies will be able to draw down on safety stock in order to keep production lines going and shelves full.”
But the Report goes on to explain there are numerous risk factors such as the role of national regulators. For example, India recently restricted the export of 26 drug ingredients in order to ensure that domestic demand was met first.
The Report also relates how the decline in passenger aircraft cargo has created a headache for logistics managers in the pharma supply chain, with key hubs such as Singapore particularly affected.