Features, News Snippets

Impact of COVID-19 on Pharma Supply Chains and the Fightback

This article is part one of a series of three articles that looks at the Supply Chain of the Pharmaceutical Industry in the context of the COVID-19 pandemic. Here, we examine the crisis, the challenges that emerged, and the industry response in the short term. Part 2 of the series will outline the ‘Learnings from the Crisis for Supply Chain Management’, and part 3 will ideate on the ‘Supply Chain Management Strategy for the New Normal’.

The COVID-19 pandemic that has swept through the world this year has caused unprecedented health and economic distress globally. To curb the rapid spread of infection through their populations, several countries imposed and continue to impose widespread lockdowns. This has caused significant disruption in demand and supply around the world.

The article uses the Indian pharmaceutical sector as a case study, to examine the challenges faced due to the lockdown, and outlines the measures that helped get the supply chains back on track. The learnings from this experience can be relevant and valuable to companies around the world.

The immediate impact of India’s National Lockdown

India’s national and state-level lockdowns imposed severe restrictions on the mobility of people, suspending all commercial and social activities that require people to come together, except for those defined as ‘essential services’.

The ambit of essential services and supplies, which included food and grocery, pharmaceutical and medical goods, and healthcare services, among others, continued operations to maintain public well-being. Since the government and businesses had limited time to prepare for the lockdown, the challenges faced by supply chains in general and essential services, in particular, were compounded.

Additionally, non-exempted businesses, which were connected to upstream and downstream activities of essential services, caused bottlenecks. Some of the challenges to the four key aspects of Supply Chain include:

  • Plan: Demand surge and limited visibility of supply trends (due to stock-ups, increased healthcare needs, etc.)
  • Source: Import freight unavailability and disrupted domestic supply
  • Make: Unavailability of raw material and limited workforce (due to social distancing, labour migration, etc.)
  • Deliver: Limited availability of logistics facilities, constrained intra- and inter-state movement

Managing the Crisis

The common objective of the industry, society, as well as the government, was to ensure continuity in the supply of critical, life-saving medicines that are essential for minimizing health problems during the pandemic.

The Indian pharmaceutical industry has an intricate network of domestic and global suppliers, manufacturers, logistics service providers, distribution channels, regulatory authorities, and consumers.

The involvement of multiple regulatory authorities, at the national, state, and local levels also brought forth certain challenges for issue redressal.

For companies, reviving the supply chain to ensure the supply of goods and services, required them to understand and effectively navigate this complex system and seek the necessary support from a number of stakeholders.

Swift Execution of Corrective Actions

At the onset of lockdown, pharma companies came together quickly to identify key priorities and tasks required to keep the supply chain functioning. Industry and other stakeholders’ associations collaborated to collate and represent on issues with the government/civic agencies and seek required support and interventions. The Government, in turn, worked with agility and transparency with industry to find quick and practical solutions.

Some of the relevant takeaways from the integrated action undertaken in this case include:

  • Adopting a system view, to evolve a management plan that is comprehensive and effective. Piecemeal interventions merely shift bottlenecks, resulting in the loss of precious time and resources.
  • Building a good understanding of the various authorities/agencies involved and the hierarchy and communication flow within the government.
  • Creating effective war rooms at the of company and industry association level, to track real-time progress and issues and to enable prompt escalation.

Please click here to read the complete article covering the immediate impact of the pandemic, and the measures taken by businesses to maintain operational continuity. For more information, please connect with the author:

Ravi Menon
Senior Business Adviser, Nexdigm (SKP)
E: ThinkNext@nexdigm.com

About Nexdigm
Nexdigm is an employee-owned, independent, global business advisory organization serving clients from more than 50 countries. Harnessing our multifunctional and digital capabilities across Business Consulting, Business Services, and Professional Services, we provide our customers, both listed and privately held firms with integrated solutions navigating complex challenges. Nexdigm resonates with our plunge into a new paradigm of business; it is our commitment to Think Next.

Previous ArticleNext Article