As supply chains become more global, pharma logistics will have to keep up with the latest SCM trends as well as view all enhancements from the patient security lens. However, while pharma companies are upgrading their logistics arrangements, India’s retail pharma logistics has remained stuck in the dark ages, for the most part.
With a highly fragmented industry, around 170,000 stock keeping units (SKUs) to be delivered across geographically diverse terrain, the logistics challenges in pharma retail are humongous. But online pharmacies have catalysed a long overdue overhaul. As new kids on the block, they currently face resentment from conventional pharmacies who allege that selling medicines online violates existing guidelines.
While that is another debate (which Express Pharma has already covered: http://www.expressbpd.com/pharma/market-pharma/sparks-fly-at-express-pharma-debate-on-online-pharmacies-2/198050/), the cover story of the current issue focuses on how online pharmacies are adding a much needed dose of high tech to pharma logistics. They are introducing e-commerce concepts like traceability, audit trail and validation of actual delivery. These concepts will also improve supply-demand forecasting, the benefits of which will flow back to pharma companies, who will be able to tighten their manufacturing schedules. (See story: Going high tech, pages 18-25, issue dated September 1-15, 2016) Operational efficiencies across the supply chain will also mean better profit margins, and for the patient, less chances of getting fake/ spurious drugs.
Online pharmacies are awaiting the release of guidelines specifically designed for the online sale of medicines. Regulators too stand to gain by implementation of these guidelines because traceability will allow faster recall of spurious products and a tighter leash on the black sheep in the sector. With online pharmacies projected to increase their market share to almost a quarter of the retail pharma trade by FY2020, it is crucial that this segment is regulated before it proliferates beyond control.
With fund flow into online pharmacies in India crossing $92 billion, investors are clearly betting on and not against this sector. Some pharma retail chains, flush with funds, are already showing the results of growing too fast, without an adequate tech infrastructure.
For instance, in another story in the same issue, a case study details how SynCore Consulting had to step in to help a fast growing pharma retail chain balance growth with operations. After building a robust supply chain and IT-business alignment to support existing operations, stock accuracy improved from 60 per cent to more than 99 per cent. (See story: Balancing growth with operations, pages 29-30, issue dated September 1-15, 2016)
In fact, though associations of conventional pharmacy stores publicly oppose their online siblings vehemently, some of their members are reportedly as eagerly awaiting these guidelines. Most pharmacies, like the pharma industry, are family-driven concerns, and the younger tech savvy generation, would like to embrace the inevitable. Rather than remain confined to their geographical reach, who wouldn’t want to expand their business? In this clash of the conventional with the new age, both sides would do well to keep the patient’s long-term needs at the centre of all decisions.
Viveka Roychowdhury
Editor