The pharmaceutical industry is undergoing sea changes in the way it handles supply chains and procurement networks. With the growth of the industry, pharmaceutical companies need to charter new paths of cost efficiencies, lower TAT and de-risking. Moglix Business partners leading pharmaceutical companies in achieving this transformation.

Growth Drivers:

Driven by greater spending on health and lifestyle management secularly across matured and emerging economies, the pharmaceutical industry is well placed to carry forward the momentum of growth in the short-term. Emerging economies are witnessing a faster rate of growth on healthcare spending in proportion to the rate of growth of GDP. Providing impetus to revenue streams of pharmaceutical companies are new product launches that promise to provide greater consumer value. Yet, another crucial trend emerging in the pharmaceutical industry in recent times is the digitization of functions like marketing, sales, research & development, manufacturing and procurement. Buoyed by the deployment of digital technologies and visibility of data on procurements, pharmaceutical companies are rationalizing inventory holdings of perishables materials, delicate and volatile materials and finished products by mapping supply chain practices against demand.


In the face of newfound market forces rallying corporate bottom lines and top lines, the pharmaceutical industry continues to face constraints that restrict the growth of performance from reaching up to the ceiling. The pharmaceutical industry is knowledge-intensive and the costs of research & development costs have a direct bearing on the costs of new product development. Pharmaceutical companies need to absorb the sunk costs of failed trials of drugs and need to create avenues for loss-offsets in the successful programs of product launches, thereby rendering their pricing inefficient and open to competition from low-cost substitutes. High development costs in the pharmaceutical industry pose risks from the cost standpoint. Late-stage clinical trials that require regulatory approvals have the effect of prolonging time durations for roll-out in the market and inhibit the accrual of economies of scale.

Pharma companies also continue to be affected by weakness in fundamental areas of performance like the cost of goods sold, OEE (overall equipment effectiveness), unoptimized inventory holdings and rigid supply chain design. Further adding to the risk profile of supply chains and procurement networks of pharmaceutical companies are the costs of customized packaging solutions, costs of disposal of wastes and expired goods and labour costs associated with the management of highly fragmented sourcing channels. Research suggests that 60% of supply chain executives in the pharmaceutical industry experience hassles in getting real-time inventory visibility from unstructured processes in collaborating with external suppliers. A common supply chain challenge facing pharma companies is the lock-in of working capital mandated by high levels of investments in maintaining excess inventory holdings to absorb disruptions that may pose a risk to the bottom line.


With the adoption of digital technologies at diverse points of the supply chain from manufacturing to consumption, pharmaceutical companies can simplify complexities arising from high inventory holdings, fragmented supplier bases and cost volatilities. It is possible for pharmaceutical companies to support greater product differentiation and customization and offer value through more customer-centric services by leveraging real-time information and unstructured data to proactively respond to accelerating volatility in planning and execution. The use of advanced analytics can enable pharmaceutical companies to optimize inventory holdings to maintain a balance between short-term operational planning and tactical level inventory planning for risk aversion in the intermediate-term.

The Moglix Advantage

At Moglix Business, we facilitate complete supply chain digitization and procurement network modernization for pharma companies. With a diverse suite of SaaS offerings, a marketplace for purchases of materials and enterprise offerings of packaging, cataloging and vendor consolidation, we put pharma companies on the path to supply chain transformation.

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