Supply Chain Management in the Drug Industry

Hedley Rees runs the independent consulting company Biotech PharmaFlow, which specializes in pharmaceutical supply chain management. He has been actively building, managing, and continuously improving supply chains in biotech for the last fifteen years.

• CONTRIBUTORS xiiiPREFACE xxiI SURVEYING AND MAPPING THE TERRITORY 11 Setting a Transformational Agenda 31.1 Aims and Aspirations of the Book 31.2 Book Format 51.3 Intended Readership 61.4 A Book About Two Worlds in Contrast 81.5 The Pharmaceutical Lottery 81.6 Supply Chain Management in Context 171.7 The History of Supply and Value Generation 221.8 The Development of Processes to Manage the Supply Chain 241.9 Life in SCM 251.10 Moving Forward 262 Plotting a Course to Patient Value 292.1 Why Focus on Patient Value? 292.2 Where Does the Patient Currently Fit? 292.3 Why Is It Necessary to Plot a Course? 332.4 Understanding How the Course Is Presently Set 392.5 Capturing Value for Patients 423 Pharmaceutical Drug Development 453.1 Drug Development’s Role in the Supply Chain 453.2 Introduction to Drug Development 473.3 The Medicinal Product 483.4 Clinical Trials 493.5 Related Development Programs 523.6 Managing Clinical Programs 573.7 Regulatory Affairs and Authorities 583.8 Supply Chain Management in Development Programs 653.9 Manufacture and Supply of Commercial Products 683.10 Supply Chain Management for Commercial Products 694 End-to-End Pharmaceutical Supply Chains 734.1 Introduction 734.2 Where Does Responsibility for the Supply Chain Lay? 744.3 Sponsoring Companies, License Holders, and Their Supply Chains 754.4 Supply Chains for Small-Molecule Products 764.5 Starting at the Final Destination 784.6 How Drugs Enter the Body 784.7 Design of Drug Delivery Systems 794.8 What This Means for the Supply Chain 824.9 Key Aspects of GMP and GDP in Relation to SCM 824.10 Overview of the Stages on Route to Patient Delivery 864.11 Manufacture and Supply of Biological Entities 905 Why Pharma Supply Chains Don’t Perform 1035.1 Supply Chain Underperformance 1035.2 Is There a Case to Answer? 1035.3 Birth to Infancy: The Supply Chain Critical Stage 1045.4 Commercial Supply Under the Patent Protection Umbrella 1115.5 What This Means for the Pharmaceutical Supply Chain 116II BUILDING A KNOWLEDGE FOUNDATION IN SCM 1256 Supply Chain Management as a Competitive Weapon 1276.1 Competition and Business Strategy 1276.2 The Marketing Mix 1286.3 Porter’s Five Forces 1286.4 Porter’s Generic Competitive Strategies 1296.5 Porter’s Value Chain 1296.6 Competitive Strategy and Customers 1336.7 The Japanese Experience 1426.8 Total Quality Management 1426.9 Lean Thinking 1436.10 Focusing on Value for Money 1466.11 SCM Processes in Competitive Strategy 1486.12 SCM in Biotech and Virtual Companies 1506.13 Competition in Pharmaceuticals 1527 Supply Chain Management Holistic 1557.1 The Relevance of SCM to Pharmaceuticals 1557.2 Production Systems and the SCM Holistic 1557.3 The Core of SCM 1567.4 First Principle of SCM 1567.5 Supply Chains as a Series of Interconnected Systems 1587.6 Processes to Manage the Supply Chain 1607.7 A Word About Processes 1617.8 How the SCM Processes Should Mesh Together 1637.9 Production and Inventory Control 1637.10 Strategic Procurement 1637.11 Transportation, Storage, and Distribution 1647.12 Information Systems and Technology 1647.13 Improvement 1658 Production and Inventory Control 1678.1 Core Mission 1678.2 First Principles of Production and Inventory Control 1678.3 The Wholesome Trinity in P&IC 1748.4 The Wholesome Trinity and Customer Expectations 1778.5 Leveraging the Wholesome Trinity 1798.6 The Impact of Variety on Supply Chains 1808.7 Designing Appropriate Production Systems 1839 Strategic Procurement 1879.1 Core Mission 1879.2 The Purchasing Portfolio 1889.3 The Process of Procurement 1959.4 Strategic Sourcing and Planning 1989.5 Outsourcing 2019.6 Basic Principles in Contracting for Supply 2069.7 Finally, Typical Organizational Tension over Procurement 21310 Transportation, Storage, and Distribution 21510.1 Defining the Core Mission 21510.2 International Trade and Commerce 21710.3 The World Trade Organization 21710.4 Intermediary Arrangements 22010.5 Terms of Trade: Incoterms 22310.6 Ownership of Goods: Title 22510.7 Third-Party Logistics Providers 22610.8 Customs 22710.9 Shipping Regulations Relating to Materials 22910.10 A Finishing Note 23011 Information Systems and Information Technology 23311.1 Overview 23311.2 Brief Lay History of Computer Systems Development 23411.3 Important Perspectives on Information Systems 23612 Improvement 25512.1 Why Improve? 25512.2 Improvement and Production Systems 25712.3 The Improvement Journey 25813 Bringing the Holistic Together 27713.1 Setting the Scene 27713.2 The Process Explained 27813.3 Developing an Action Agenda 28513.4 Case Study 289III PLANNING AND EXECUTING SUPPLY CHAIN CHANGE 29314 Improvement in Pharmaceuticals 29514.1 Where Are We Now? 29514.2 Subsequent Developments Since Inception 31014.3 A Blueprint for Quality by Design 31115 Exemplar Thinking in Organizational Improvement 33515.1 Where Are We Now? 33515.2 What Is Meant by "Exemplar"? 33815.3 A Dialogue on Exemplar Improvement 33815.4 An Approach to SCM Based on Systems Thinking 35716 Building a Foundation for Sustainable Change 36316.1 Focus on the Individual 36316.2 Individuals as Leaders 36816.3 Individuals as Motivators and the Motivated 37016.4 Individuals as Group Members 37216.5 Individuals as Participants in Cultural Change 37616.6 Case Study: Miles Ltd., Bridgend, Glamorgan 37817 A Cure for the Pharmaceutical Supply Chain 39517.1 What Is the Disease State? 39517.2 What Is the Label Claim for the Medicine? 39617.3 What Will Life Hold Without the Medicine? 39717.4 What Is This Better Way to Develop Drugs? 39717.5 Full-Scale Production of Drugs 40717.6 What Are the Barriers to Change? 41017.7 What Are the Potential Benefits of Change? 41317.8 Defining the Art of the Possible 41417.9 Ending with the Beginning 417END NOTES 419INDEX 429

"A recommended read for all wishing to shift performance to greater levels." (Supply Management, 1 February 2012) "This book is ideal reading for those entering or currently working in the field of supply chain management, such as clinical supply managers, or those in operations or production and planning ... This book would be an excellent resource for small pharmaceutical companies that may have limited experience of supply chain implementation or outsourcing, giving a thorough overview of the process and plenty of food for thought." (The Pharmaceutical Journal, 16 November 2011)"This is a solid text that is equally suitable for the newcomer or experienced profesional in the pharmaceutical/biologics industries . . . Overall, I recommend the book for its educational perspective on the industry and the significance of effective SCM for its future success." (Quality World, 1 July 2011)