U ntil recently, companies planning for resilience and business months, the events themselves typically conclude within hours or days. No more. “The pandemic changed our thinking about how to manage resilience,” says Steve Simco, head of logistics and distribution, North America, with Camelot Management Consultants. “It’s the Great Depression of risk issues, and it’s not going to leave peoples’ minds for a while.” The pandemic’s continued impact has been particularly pronounced in the pharmaceutical and life sciences logistics sector, where products are critical to life and health. Many products also are perishable, highly regulated, and require temperature-controlled and sanitized environments. “Life sciences supply chains require a unique level of accountability, visibility, and traceability,” says Andrew Wang, director of healthcare and industrial with Locus Robotics. In addition, skyrocketing freight costs have compelled pharmaceutical months, No says Steve Management to leave The pharmaceutical life and temperature-controlled require Wang, In companies freight pharmaceutical Together, continuity tended to focus on relatively localized events, like a hurricane hitting the Gulf Coast of North America and disrupting traf c and power, or an Icelandic volcano erupting, forcing air traf c to reroute. Although the human and nancial toll might extend for companies to better understand this expense, Simco says. That’s a shift, given that freight costs historically have been a relatively small percentage of the price of pharmaceutical goods. Together, these forces are helping to drive the U.S. pharmaceutical logistics market, which topped $23 billion in 2021, and is forecast to reach a compound annual growth rate of 7.4% through 2030, according to Grandview Research. The increasing global production of COVID-19 vaccines and demand for over-the- counter medicines and supplements also are propelling the industry. The expanding prevalence of biopharmaceutical products, which are made from living cells or organisms, is also shaping the pharmaceutical logistics market. Many of these products require temperature controls. The global biopharmaceutical market, valued at $28.7 billion in 2021, now accounts for 20% of the pharmaceutical industry, according to Straits Research. S C D I I The factors that contributed to the recent disruptions are in uencing which solutions companies are turning to in their attempts to improve their supply chains. One cause of the supply chain challenges has been an “inability to forecast extreme demand uctuations,” says Tim Vadney, a director with West Monroe, a digital services rm. The lack of accurate demand signals also prompts some companies to simply “buy heavy,” he says. These larger purchases boost congestion at ports and distribution centers. Although the pharmaceutical industry was an early adopter of enterprise resource planning (ERP) systems, these solutions generally don’t include suppliers in the ow of transactions, which would help ensure all partners across a supply chain have a reasonably accurate handle on supply and demand. To remedy this, some software providers are extending ERP functionality to companies’ supply chain partners over the web. in the chain To companies’ Pharmaceutical and life sciences supply chains receive a healthy dose of innovation and automation solutions—boosting visibility, traceability, and productivity. chains and market, annual increasing counter The living of these market, industry, S The solutions One demand services simply distribution Although resource
August 2022 • Inbound Logistics 51
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