Article | September 20, 2022

Survival Of The Fittest In The Scarcity Era: Has Your CMO's Supply Chain Strategy Evolved?

By Xavier Basseda, Esteve Quimica

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While people tend to think worldwide supply chain issues or supply conflicts impacting specific markets affect all companies in a distressed field equally, regardless of efforts to mitigate the negative occurrence’s impact, this simply is not true. Anticipatory planning and established supply disruption mitigation plans often enable market access before competitors — in advance of suffocating demand — while mitigating or eliminating concomitant supply chain problems like cost or timeline overruns, as well as lapses in material quality or security of supply.

Supply chain strategy has been perceived in the past as an economy of scale: find a reliable source of materials and regularly buy up and secure huge quantities. While scale remains an important sourcing capability, modern global operation in healthcare requires a more targeted approach, driven by skill operating across different volumes, market distribution, and with diverse identified strategic partners.

A popular adage states, “always have the frying pan by the handle.” In short, always maintain control. This general rule applies to procurement, but during shortage periods, that control is lost. In fact, large companies with a big supply spend can be the first to experience disruption during tough times because, despite having contracts with well-known suppliers, a force majeure can invalidate most contracts in place. Thus, organizations of all sizes need to employ numerous skillsets to understand a particular product’s dependencies and levers (upstream and downstream) relevant to a specific supply chain.

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