Changes to the Life Sciences Supply Chain as a Result of COVID-19
Updated: May 24, 2020
Working at Pharmaceutical Contract Manufacturing Organization (CMO) and Contract Research Organization (CRO) clients during COVID-19 has been an exercise in change as the novel Coronavirus has spread throughout the world, impacting every aspect of our lives. This includes not only the immediate changes we are all experiencing in our personal lives, but the changes in the business world. Of course there are adjustments being made currently, but there will be an impact due to COVID-19 that reverberates through time.
Life Sciences companies are essential businesses and we have been working on location while many other businesses have adopted a remote option. We are wearing masks at the office, limiting the number of people in a conference room, lab, or operational area, and sanitizing often! These are great practices given the current environment we are in. There will also be long term changes to the way that Pharmaceutical manufacturing organizations, including CMOs, look at their supply chain.
First, relating to non-product related considerations, I've observed and experienced the following:
Delays in the equipment needed to construct a new manufacturing facility from suppliers in Italy and Spain. The delay in these essential components have delayed the opening of the facility and the subsequent delivery of orders
Complications in fulfilling orders for lab supplies at Contract Research Organizations (CROs) and Contract Development and Manufacturing Organizations (CDMOs) leading to delayed or failed experiments
The Human Capital Supply Chain is being disrupted in several ways, including the ability to interview candidates in person, providing employee training, and the desire of employers, employees, and contractors to work remotely
Clinical Trials have been postponed due to essential personnel being redirected to virus related activities or the participants are unavailable
Related to products and materials, both the drug development cycle and commercial manufacturing have been obstructed in many ways:
Shipments of APIs, many traditionally coming from far-off countries such as India with already long lead times, are being further delayed or outright cancelled
Certain aspects of the transportation routings have been shut down
Exploring alternate sources is not feasible at this time as simply meeting the existing needs of current business relationships is strained
I am seeing that Life Sciences companies are already reevaluating their supply chain to:
Perhaps move to on-shore or near-shore suppliers to reduce the impact of such an event in the future
Have multiple suppliers for a product so that the inability of one supplier to deliver does not impact the entire organization
Reconsidering safety stock levels, which of course balances storage costs, expiry dates, and dead stock risks
In an industry that loves meeting and beating challenges, the Supply Chain issues presented today will be just the next hurdle on the way to success.
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