Supply chain security has been the subject of numerous posts on this blog in the past. It is important to note, however, that the pandemic hasn’t widely impacted global supply chains, per se. Rather, short-term interruptions intensified scrutiny of an issue that had previously sailed under the radar for much of the pharma industry. In fairness, many have historically viewed supply chain resiliency as a distraction – an additional cost to offset potential negative consequences for bottom lines.
While that viewpoint may endure, most in the industry now consider supply chain security a necessity. In previous posts, we’ve discussed Neuland’s ongoing backward integration efforts, the acquisition and commercial launch of a new manufacturing facility (Unit III), and some of the challenges with current supply chains. In this post, we’ll share some of our supply chain experiences during the pandemic, and look at steps we’re taking (or have taken) to ensure continuity of supply for our API customers.
The Localized Impact of COVID-19 on Supply
While COVID may not have much of a long-lasting impact on global drug supply chains, there have certainly been some bumps in the road. The recent massive case wave in India, for example, impacted operations at numerous companies – including some of our own suppliers.
For example, one manufacturer in Vizag had sudden surge in COVID cases, which threatened our supply. We immediately arranged supplies from our alternate vendor to keep our lines running. The manufacturer recovered within 15 days and has recommenced supplies, but it highlights the importance of having alternate suppliers available and ready to fill any gaps.
In another instance, when oxygen supplies dwindled across India as cases rose, a manufacturer of liquid nitrogen converted all of their transport capacity into liquid oxygen tankers. Neuland contracted with an alternative Telengana-based supplier to continue running our plants without interruption.
These kinds of supply chain interruptions led us to develop a structured process in which we continuously maintain contact with our supply chain partners. This has been particularly useful in conversations with our KSM and Intermediate suppliers, allowing us to have transparency and head off supply challenges before they can impact operations.
With other suppliers, we send out mailers and text messages to maintain an open line of communication. These procedures allow us to react quickly if an issue arises.
Focusing on Core Competencies
At Neuland, we continuously monitor the manufacturing steps of our compounds. One aspect we pay particular attention to is whether a particular element of reaction chemistry falls within our core competency. In some cases, this offers the opportunity for us to outsource non-critical steps in a reaction.
Such a step is often taken due to considerations of plant occupancy owing to long reaction cycles and the scalability of certain processes. In many cases, outsourcing non-critical synthesis steps can ensure faster turnaround times, meaning timelier delivery.
Our overriding consideration is to focus on our core competencies and maximize value delivery to our customers. In one recent case, we outsourced 3 synthesis steps of an API to two competent supply chain partners. This meant we were able to reduce the cycle time as well as the cost of the API to our customer.
Looking Six Months into the Future
Neuland follows a robust monthly SOP procedure which gives us six months of visibility into our Manufacturing & Procurement supply chain operations. The process involves a daily morning standup call of all key personnel which reviews:
- orders received
- production outages (if any)
- COVID-related escalations
- customer expediting requests
- any other issues that have arisen.
This working group is fully empowered to make critical, on-the-spot decisions, as needed. When spikes or dips in demand occur during the monthly cycle, issues may be escalated. All key customer products and service levels are covered as a part of this daily review.
Addressing Complex Supply Chain Challenges
Increasingly complex drug compounds have led to complicated supply chain attributes. Cold chain logistics has become top-of-mind in the wake of the mRNA vaccines. But cold chain was already a critical aspect for the drug industry. It has been reported that cold chain logistics accounted for more than 26% of the pharmaceutical industry in 2019 – and it continues to grow due to increasingly complex molecules and the rise of biologics.
Cold chain logistics may have become more necessary, but it also increases the risk of non-conformance in the supply chain. At Neuland, we’ve partnered with two logistics companies who are certified for Good Distribution Practices (GDP) and are considered among the best in the trade. In the past few years, we’ve avoided temperature outages in our commercial cold chain shipments and have had no products fall out of conformance.
In today’s global business environment, it is essential to have a secure supply chain which can provide consistent quality and prompt delivery without interruption. The pandemic has strained some aspects of the supply chain, emphasizing the importance of keeping a watchful eye on every aspect of the process. Where vendor qualification was once a task performed periodically, companies today must be constantly vigilant, paying close attention to their suppliers and ensuring they are ready to pivot instantly to address potential issues.
Ready to learn more about how Neuland can protect your API supply Contact us today.