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India’s pharmaceutical supply chain is amongst the most complex supply networks. This is because a big company can operate at the national level with 8,000-10,000 distributors who individually sell the same products to coterminous retailers across geographies, stated Dr. Jay Doshi, chief business officer, 1Pharmacy.
Such a diversified network is prone to inefficiencies of overstocking in one segment while there will be a shortage in the stock position in another. Enterprise Resource Planning (ERP) systems help consolidate data from various stakeholders for transparency and coordination with the supply chain. Using such real-time information regarding stock levels and demand trends, distributors and retailers can better manage order flow, he added.
A common example would be a sole distributor managing several retailers for the same widely sold drug like Dolo 650. This would be an arduous and complex model. Considering all this and stiff regulatory compliance, it becomes a significant challenge in inventory management and order fulfillment. ERP systems would be key in managing the pharmaceutical supply chain process, Doshi told Pharmabiz.
While proper inventory management is crucial in the pharmaceutical industry, due to storage requirements and timelines attached to medicines, here ERP systems enable real-time monitoring of product inventories of multiple distributors to provide full insight into stock levels and expiry dates. This capability also helps the distributors proactively maintain the inventory before expired medicines arrive. Moreover, an ERP system allows pharmaceutical companies to track stock movements and know which medicines will be required in the future, which ones are overstocked, and which medicines are not moving to sell before they go past their expiration dates, he said.
The pharmaceutical industry is highly regulated. Traceability of medicines, from production to retail, becomes highly significant when medicines have to be recalled to their points of origin. For instance, the contemporary issues where recall of a particular batch has been made due to its bad quality establish that robust track and trace systems assist in successful recall operations. ERP systems facilitate compliance in that they document records in real time and maintain correct, up-to-date records while providing reports throughout the supply chain in real time. Such transparency and traceability help companies avoid costly penalties and legal issues while ensuring consumer safety.
Since multiple distributors would have the same products, proper communication between all these parties is imperative. An ERP system fosters collaboration between manufacturers, distributors, and retailers through instant updates and notifications. This ensures smooth flow of medicines with minimal disruptions, which might adversely affect patient care, said Doshi.
The future of ERP in the pharmaceutical business would be to develop an interconnected ecosystem. With this it can share information easily to make its supply chain more agile and resilient, as well as allowing it to utilize its operations with even more ERP-integrated systems while promoting compliance and cost efficiencies in a highly competitive market. Hence, adopting the latest ERP technology would be critical for the pharmaceutical supply chain in finding new avenues for growth and improvement.
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