The future of procurement for pharma operations is a much talked about subject because of the prevailing coronavirus pandemic.
Disruptions in global pharma operations, supply chain shocks, and subsequent supplier management problems demonstrated the need to rethink pharma procurement.
For forward-thinking chief procurement officers (CPOs), the COVID-19 crisis has provided a pathway for change.
They see that today’s leading procurement technology is geared at reducing procurement costs, improving the sourcing in the supply chain process, and streamlining operations and they want to be part of it.
When it comes down to technicalities, the future of procurement for pharma operations and digital transformation cannot be divorced. And some experts are even talking of a new procurement paradigm.
To the astute CPO, there has never been a better time than now to adopt agile, cloud-based intelligent technologies.
But in order to understand what’s at stake, let’s delve deeper into what the new procurement paradigm for pharma firms would consist of.
Rethinking Pharma Procurement
Did you know that 75% of the labs producing the active ingredients required to manufacture drugs in the U.S. are located overseas?
During the crux of lockdown, when borders closed, and shipments were stuck in port, the vulnerabilities in pharma procurement became increasingly obvious.
It wasn’t long before drug companies began realizing that they could not continue with pre-COVID ways of doing business. It was time to devise a new procurement paradigm.
Questions were asked.
· What measures could be put in place to mitigate supply chain uncertainty?
· What best practices could American drug manufacturers adopt to deal with disrupted manufacturing operations?
· How could companies improve supplier risk management?
· Did manufacturers have updated supply chain and business continuity plans?
As if answering these questions wasn’t challenging enough, pharma companies still had to contend with other issues on their plates such as:
– Increased regulation and scrutiny
– Pressures related to product launch cycles
– Cost-mitigation demands from executives
Mounting pressures from management have now forced many pharma companies to pivot and make decisive decisions on matters they have been dragging their feet on for years.
One such area that’s been pushed to the fore is the role of technical operations (TechOps) and digital transformation in the pharmaceutical sector.
How Digital Transformation Could Revolutionize Pharma Operations
Digital transformation can best be explained as the integration of digital technologies by enterprises. Major goals that are often linked with this adoption of technology are:
– Improvement of efficiency and operations
– Added value to the supply chain and,
Whatsmore, companies that proceed with digital transformation efforts can look forward to:
Increased transparency: With pharma operations largely being a team affair, technology would make it easier to connect and communicate in real-time in a variety of formats thereby increasing transparency.
Better decision-making: By examining the data collected from internal processes, companies could gain insight, easily identify patterns, and trends that could be used to make sound data-driven decisions that move the company forward.
Cost-savings: A centralized procurement platform means requisitions can be consolidated into a single purchase order, ensuring raw materials are sourced and bought in a strategic manner which in turn leads to inevitable cost-savings.
It’s clear to see that digital transformation certainly has the power to change pharma operations. However, it’s key to note that despite these outright benefits, many companies seem to be hesitant when it comes to technology adoption.
Overcoming the Obstacles to Digital Transformation
Digital transformation is an inevitable part of the future of procurement for pharma operations. But before pharma companies can embrace it, they need to be comfortable with change.
You see, the pace at which technology is evolving makes it increasingly difficult for many industries to keep up with. The rate of technological evolution has made it necessary to divide technology into generations.
Core technologies are those that are currently being used by most people and businesses. Examples of such technologies are e-sourcing, e-invoicing, and e-auctions.
Developing technologies are those that have the potential to disrupt industries and have found their way into use. Examples include robotics, artificial intelligence, advanced analytics, and cognitive computing.
Emerging technologies are those still in developmental stages but with some real-world application. Examples are blockchain, cyber tracking, and special analytics.
Most pharma companies already have several core technologies in place but are hesitating on integrating more advanced technologies for fear of product lock-in and siloed supplier relationships.
What is supplier performance management? SPM Guide.
One of the keys to overcoming the obstacles to digital transformation is knowledge of how newer solutions can fit into existing systems.
Many emerging technologies have been designed in such a way that they can be easily assimilated and integrated into a pharma firm’s current ERP. So, you don’t have to carry out a major overhaul of your existing systems.
Procurement experts like ProcurePort offer demos of procurement solutions so you can see and assess what you need before making any investments.
The Bottom Line
Pharma firms that make efforts to identify vulnerabilities in their current procurement operations and rectify them stand to benefit the most in a post-COVID era.
The future of procurement belongs to those pharma companies that are not afraid to make the quantum leap from legacy systems to dynamic robust new platforms.
Pharma organizations cannot afford to let this opportunity to try out new procurement solutions go. With a plethora of procurement technologies on the market, how do you know where to start?
Fortunately, you don’t have to try every solution out there. ProcurePort is a trusted procurement solutions provider whose clients include UNOPS, HUD.GOV, and conEdison.
If you would like to discuss procurement software with a seasoned consultant, or to schedule a demo of our solutions, contact us today.