by Samson Omattah (M. Pharm., B. Pharm., ISCEA-CSCA, mPSN, mFIP, mRPS…
The Coronavirus (COVID-19) pandemic is reshaping the pharmaceutical supply chain and it may mark a rebalancing of where drugs are made as nations recognize a security imperative. It has affected the entire supply chain and the economic of the world as the way people do things has suddenly changed.
We now have
1. Security challenges
2. Grounding of aviation industry affecting imports
3. Extended lead times on procurement
4. Massive shutdown of the Economy
5. Millions of people rendered jobless
6. Reduced cash flow and purchasing power leading to inability to procure products or pay suppliers
7. Changing priorities for customers as most resources are now being channeled to fighting the Pandemic
8. Price hike of COVID-19 related materials
Others are Low sales •Stock outs •Expiries/Dead stock •High demand of products that are normally slow movers eg PPEs •High staff cost – staff working less hours due to curfew – fewer staff at a time due to social distancing. Productivity is low.
All these are as a result of Rise in number of local infections • Lock down/ Containment • Source markets affected by Covid-19 • Hospitals handling only emergency cases • General uncertainty • Curfew • Loss of Jobs • Closure of businesses • Working from home • Social distancing • Slow down in economy.
Management at different levels of the supply chain
• Cross cutting issues
1. Forecasting and quantification of needs
• Proper quantification considering – Actual current consumption
– Projected consumption for the next 6 months considering current situation –
– Cash flow –
2.Procurement planning and management –
Order planning – Timely placement of orders
3. Warehousing and inventory management – Storage of commodities- prevent contamination and maintain integrity – Staff – Protect from infection – Inventory control – monitor to ensure continued supply and prevent losses
4. Distribution Management – Ensure clients are getting what they need when they need it. – Rationalizing supply to ensure most clients are supplied. This may involve rationing – Cash Flow management – Transport considerations
➢ Timely placement of orders
➢ Stock up on chronic medication to ensure continued supply to patients.
➢ Review purchases to match current demand and consider ability to pay suppliers -e.g. Offers: to take or not to take
➢ For commodity shortages consider alternative suppliers
➢ Proper storage of commodities to preserve integrity of products
➢ Proper Inventory management to minimize on losses
➢ Consider stocking up on items relevant to the pandemic
➢ Manage staff costs
➢ Infection control due to high traffic of customers
➢ Ensure all essential products are availed to the patients e.g. insulins, ARVs. For the retail sector this may involve reaching out to individual clients and asking them to stock up due to uncertainty of supplies. This is also important since there could be a tendency to hoard by some.
➢ Consider online sales
➢ Home deliveries
Cross cutting issues
1. Storage of commodities – Minimize contamination – Quality assurance to ensure integrity of products – Cleaning and Disinfection of storage areas – Regular stock management e.g. stock count
2. Staff – Provision of PPEs and sensitization of staff on hygiene practices – Social distancing – Working from home – Manage Staff costs – Working hours – Productivity of staff eg when working from home
3. Cash Flow management – due to the crisis there is a slow down in the economy leading to reduced cash flow. There is there need to manage this by – Rationalizing on purchases. Only purchase what you are able to pay for. – Step up debt collection – manage credit terms being offered to clients – Renegotiate payment terms with clients – Negotiate with suppliers on payment terms – Negotiate with Banks – Manage other costs egstaff, office expenses, operational costs.
• Plan procurement/orders • Monitor stock movement/ don’t overstock • Ensure continued supply/Meet client needs • Protect staff • Manage cash flow • Minimize contamination • Avoid infection • Stay safe
Chemical and Engineering News
Presentation on Phillips Pharmaceutical Group Dr Lilian