April 19, 2023 | Pharma and Life Sciences
Pharmaceutical and life sciences supply chains are recovering from the disruptions of the last few years and producing groundbreaking innovation despite ongoing pressures.
Between macroeconomic factors such as inflation that are creating pricing pressures to an increased focus on ESG goals, supply chain and procurement teams are today expected to address traditional metrics such as cost savings and efficiency as well as be in line with emerging trends.
What are the top concerns emerging in pharma and life sciences and how are leading companies tackling them?
This blog will explore five key trends shaping the industry today: pricing and margin pressures, supply chain disruption, R&D innovation, talent strategy and ESG.
Pricing and margin pressures have been a consistent factor for the pharma and life sciences industry for a long time.
However, that situation is evolving, with unit cost savings increasingly difficult to achieve. Companies now need to focus on managing their total cost of ownership, including cost increases due to inflation.
To meet that challenge, companies will need to invest in supply chain management, including technology and digital transformation, to help them enhance visibility into cost drivers, manage costs and optimize processes to address business changes. Leveraging technology to enhance speed to market and customer centricity will enable companies to accelerate innovation in their core product offerings and help drive long-term value.
global supply chain network for pharma and life sciences companies might be better off than it was during the height of the COVID-19 pandemic. Companies have made some strides in making their supply chains more resilient, agile and sustainable. But lack of supply chain visibility and understanding of the specific risks and exposures, including inventory fluctuations or disruptions to critical supplies, can create havoc.
To combat the risk of disruption, leading companies are improving risk management capabilities by mapping their supply chains and investing in supply chain technology and analytics to enhance their capabilities around demand forecasting and supplier automation.
While research & development (R&D) continues to produce innovations, there is a growing need for new products and modalities, as well as more effective R&D processes to streamline discovery to product launch.
Best practices for maximizing innovation include focusing on clinical innovation to drive new modalities, accelerating speed to market and shifting to a more customer-centric business model.
R&D leaders have an opportunity to focus on digital transformation through technology enablement, data and AI-enabled research. Companies should also consider supplier development to fuel innovation with key suppliers.
How pharma and life sciences companies manage their talent strategies will be increasingly important in 2023 and beyond. The need for a skilled and diversified workforce for next-generation therapies, combined with a scarcity of talent and high employment costs make hiring a crucial area of focus.
How are companies dealing with the talent shortage? By employing new ways of finding talent, such as using internal or captive talent communities and marketplaces. Using technology to drive total workforce management can create new efficiencies and help firms optimize their balance between full-time or contingent labor and BPO, managed services and third-party suppliers.
Tighter government regulations, activist investors and a need to start converting aggressive climate-change goals into measurable actions have made companies in the pharma and life sciences industry focus on developing and executing the right sustainability strategy.
Companies can set themselves up for success by prioritizing the key factors that they can influence, dedicating the resources and time needed to drive progress. They should look to implement digital tools and analytics to drive ESG execution, and work with strategic suppliers to co-innovate solutions, setting standards and targets.
Pharma and life sciences leaders will have a lot to do in the coming months to maintain profitability amid an uncertain economic climate, inflation, supply issues and disruptions.
It is also critical for supply chain and procurement leaders in the life sciences industry to look beyond the traditional boundaries of their role and collaborate across functions to address these challenges. By investing in supply chain technology and analytics and focusing on supplier development, companies can improve their ability to compete, reduce costs and become more customer-centric.
To learn more, download the GEP Life Sciences Outlook 2023 now.