Sustainability is growing in importance throughout the pharmaceutical industry's supply chain. How pharmaceutical companies can lower their environmental footprint without sacrificing quality, compliance, or supply security is the question on all of their minds, from the government to investors, healthcare providers to customers.
While production might be the topic of sustainability discussions, procurement is becoming one that’s growing in significance to reach sustainability goals. Every sourcing decision affects the type of supplier, transportation needs, energy needs, packaging needs and the effectiveness of the supply chain.
Although sustainable sourcing practices might be a long way down the road for pharmaceutical companies, there are early signs that procurement teams are now thinking about suppliers' sustainable practices when evaluating them and planning sourcing strategies.
The change is particularly marked for suppliers that look to global supplier networks for APIs, intermediates, excipients and specialty chemicals. who search the world for APIs, intermediates, excipients and specialty chemicals from supplier networks. But with sustainability in the spotlight as an advantage, procurement leaders are seeking out suppliers who offer environmental responsibility in manufacturing.
The procurement of medicines has a significant impact on the company's environmental footprint.
All buying decisions have an impact on:
Historically procurement teams had three main areas of interest:
These are all still important factors, although sustainability is also becoming a fourth consideration.
In today's competitive landscape, procurement teams are expected to not only find suppliers that comply with regulations but also those who have been shown to engage in responsible environmental practices. In the pharmaceutical industry, for instance, where the procurement of raw materials or APIs may require substantial quantities, this is crucial.
The truth is, if suppliers aren't part of the sustainability journey, then companies can't achieve a sustainable pharmaceutical supply chain.
Achieving sustainable procurement is easier said than done.
Pharma supply chains are amongst the most complex in the world with several suppliers, countries, regulatory requirements and manufacturing processes.
The manufacture of Active Pharmaceutical Ingredients (API) can be energy intensive.
The various aspects of chemical synthesis, recovery of solvents, purification processes, temperature control and quality testing all consume energy.
It poses a challenge for procurement teams. The same product can be sold by two suppliers and the environmental impact of the two suppliers may be very different.
When sourcing it is difficult to make sustainability choices due to lack of visibility on supplier operations.
A number of pharmaceutical companies procure materials from various countries and various suppliers.
A single product can be made with:
A bigger supplier network makes it increasingly difficult to track environmental performance smoothly.
The most significant procurement challenge is the lack of transparency of suppliers.
There are many questions that many buyers have trouble answering, including:
Sustainability can be challenging to integrate in the procurement process unless information from reliable suppliers is available.
Buyers need not compromise on quality, compliance or business performance when making sustainable purchases.
Rather it is about increasing the number of criteria used to evaluate suppliers to include environmental factors.
India is still one of the biggest pharmaceutical manufacturing hubs and is also one of the largest sources of API in the world.
A number of the API suppliers in India are putting more money into:
Indian manufacturers are adapting to the changing market expectations with the growing focus on sustainability by global pharmaceutical buyers.
Choosing suppliers that have commitment to sustainable practices can help improve your supply chain over time for procurement teams.
Typical sourcing happens to be a lot more about cost than anything else.
But there is a need for a wider framework of assessment for sustainable procurement.
When hiring a procurement specialist, procurement professionals should keep the following in mind:
Larger initial investment can lead to higher efficiencies, reduced supply chain risks and improved sustainability in the future.
The use of transparency in pharmaceutical procurement is becoming more and more valuable.
Organizations desire improved transparency on supplier capabilities, manufacturing processes, certifications, and sustainability.
Having good supplier information can enable procurement teams to go into the sourcing process with informed decisions and find suppliers that meet their business goals.
Procurement teams can achieve sustainable sourcing more easily when they have access to the proper tools in the digital domain.
The following are commonly used in traditional procurement:
These methods create a challenge to compare suppliers and restrict the information about suppliers' performance.
By utilizing digital procurement platforms, procurement teams can improve their ability to source and access data from suppliers in real-time.
Benefits include:
As technology is not the key element in achieving a carbon neutral supply chain, it can assist procurement and sourcing teams in finding opportunities to improve.
Pharmaceutical supplier networks are increasingly complex, and there is a need to identify and assess suppliers better.
A bulk API sourcing platform can be of great help here.
Procurement teams can tap in to the centralized supplier network and procurement intelligence platforms to uncover suppliers and evaluate them with greater ease, rather than resorting to disparate sourcing channels.
A modern sourcing platform can assist organizations to:
It takes a long time to find qualified suppliers.
A centralized sourcing ecosystem not only assists in sourcing suppliers efficiently, but also decreases the time and effort that are needed to discover suppliers.
Better decision-making processes should be put in place for sustainable procurement practices.
Through digital procurement solutions, organizations can perform an analysis of other suppliers’ capabilities, get knowledge of their company, and make wise sourcing decisions.
Being on multiple conversations with the suppliers can prolong procurement process.
Sourcing activities and the associated operational efficiency will be optimized through the digital management of RFQs and the communication with suppliers.
It is common for buyers to resort to alternative sourcing methods as part of sustainability initiatives.
The use of a procurement platform that provides global visibility to suppliers allows organizations to identify new sourcing opportunities while maintaining compliance and quality standards.
Optimizing the selection of ingredients in pharmaceutical supply chains is crucial to creating a more sustainable supply chain.
A centralized digital ecosystem, ChemDmart helps pharmaceutical and chemical procurement professionals locate suppliers, coordinate sourcing activities, and access procurement intelligence.
Through its service, ChemDmart helps organizations increase visibility of suppliers and reduce sourcing efficiency by connecting buyers with verified suppliers in the pharmaceutical, chemical, biotech, and industrial sectors.
Whether procurement teams are searching for API suppliers in India, exploring global sourcing opportunities, or seeking a bulk API platform to locate suppliers more easily, accessing better supplier information can help with procurement decisions and ensure efficient implementation.
Pharmaceuticals cannot be made carbon neutral on a single platform, but digital procurement ecosystem can help organizations transition to more sustainable, efficient and transparent sourcing practices.
Carbon-neutral pharmaceutical procurement has no room in the immediate future.
The pharmaceutical industry is one of the complex, global industries that are tightly controlled. Despite this, procurement specialists get a unique chance to contribute significantly to sustainability outcomes based on their choice of suppliers, sourcing processes, and procurement approaches.
Responsible sourcing, supplier transparency, and procurement intelligence make companies better equipped to adhere to upcoming sustainability requirements.
Thanks to the increasing role played by sustainability criteria in assessing suppliers, digital sourcing tools will become increasingly popular, allowing procurement experts to source trusted suppliers who are able to sustain their supply chains.
Smart decisions made now regarding sourcing will lay the groundwork for sustainable pharmaceutical procurement later.
