Proactive Supplier Management is a dynamic strategy that involves preparing your supply chain for worst case scenarios and enabling them to be resilient in times of disruptions and non – stabilization. It is involving personnel at different levels, available resources and utilizing various tools to tackle problems in the entire supply chain life cycle.
In the past, supply chain managers only had the goal of sourcing items at the lowest possible prices, with continuous flow of items. However, in today's world, supply chain managers have multiple challenges to face. Examples include globalization, supply chain disruptions and vendor incompatibility, which make the supply chain risky for the manufacturing industry, including the pharma.
There are many techniques to adapt to these changing requirements, and one of them is proactive supplier management. It aims to assess the risks involved in the supply chain and develop countermeasures before these risks convert into hazards. It ensures that the supply chain is able to source quality raw materials in the event of unexpected challenges, shortages and delays.
How to implement proactive supplier management in the pharma industry
Let's discuss how an organization can proactively develop its supply chain and become resilient
Risk Assessment
Risk Assessment is identifying risks that could lead to disruption in your supply chain. The result of this activity must be the identification of all vulnerabilities that may impact your supply chain, including globally or locally.
Conduct a risk assessment that could realistically identify hinderance or risks to your supply chain. For example, difficult to reach geographical location, critical strategic value, transportation delays, supplier incapabilities, non – fulfillment of regulatory regulations, failure to complete & provide documentation and emergency unpreparedness
Once all the pain points have been identified, create a detailed list of all these risks from beginning to end. Identify their impact on the organization's overall supply chain.
The risk assessment must be thoroughly performed because it will be used to map the current risk portfolio. It is also used to reflect the organization's capabilities in mitigating these risks in the later stages of proactive supplier management strategy.
Mitigation Plans
After risks have been identified, it is time to develop mitigation plans for these risks. The plan must be designed keeping in view the identified risks and must provide practical solutions rather than theoretical hypotheses.
There can be many dimensions for devising mitigation plans, and it depend on various factors, such as the organization's productivity level, material type, complexity & cost, and source.
Some mitigation plans that could help an organization survive supply chain disruption, are described below
Alternate Sourcing
Alternate sourcing is a process of generating sourcing options that could be used in addition to the existing resources. It acts as a backup resource in times of supplier disruption.
Creating a pool of alternate sourcing options is the most effective way of managing supply chain disruptions. It also includes location diversification because when if one country or regional source becomes unavailable, source from another country or region can be used. It helps to develop a flexible and safe supply chain.
It also helps in times when the pharma manufacturer upscales itself and the existing supplier has exceeded its capabilities.
Manufacturing industries, including pharma, require extensive supplier selection due to the criticality of the products being manufactured. This starts with identifying the available sources and qualifying them on the basis of organization-specific criteria. The buyer organization must understand the source organizational structure and develop a relationship with the relevant and authorized personnel.
A backup contract would also be helpful in building alternate sourcing options. It helps to quickly reach the supplier, and order their products without starting the supplier selection w...
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