Pharmaceutical companies may benefit from strategic sourcing

While many pharmaceutical companies previously relied on the most inexpensive components from across the world, this longstanding trend may be slowly changing. With increasing concerns about drug quality, sustainable supply chains and green manufacturing and shipping processes, some corporations are beginning to change their policies in order to alleviate these worries. Corporations looking to save on costs may be finding that these techniques can help them cut down on essential expenses.

Sourcing to cut costs
Because much of the sourcing and manufacturing of pharmaceuticals used in the United States is conducted overseas, some companies are becoming concerned with their policies in regard to these issues. According to Pharm Pro, many companies are beginning to look into strategic sourcing initiatives to lower their direct material cost on ingredients necessary to make pharmaceuticals sold in the U.S. By investigating new suppliers, shipping routes and purchasing activities, some companies can identify areas in which they can save.

Manufacturing is also a concern for those companies looking to find more cost savings while still providing quality products. Increased oversight in the industry makes it essential that manufacturing facilities comply with industry regulations and ensure their plants are up-to-date and using the highest-quality ingredients and processes. Because upgrades and heightened employee training can add up, keeping sourcing costs low is essential. Many businesses are also looking into more sustainable sourcing techniques. Some may want to ensure their ingredients come from a certain area, don't harm the environment or use ethical labor practices.

New logistical concerns
With more concerns arising about sustainability, companies with manufacturing operations overseas are looking for additional ways to save on expensive shipping costs. By better managing their supply chains, pharmaceutical companies can better track and save on essential logistical operations.

Many businesses are looking into more sustainable logistics operations, such as using green energy such as solar or wind power as part of their shipping routes. Others are looking to cut expenses by simply streamlining their logistical operations, which can cut down on fuel expenses. While these can be ways for a company to save on on shipping, they can also be a way for a business to promote its sustainability plans.

However, pharmaceutical corporations searching to save on expenses need to first identify the areas in which they can improve and cut back on costs before determining where to slash expenses. By examining sourcing policies, manufacturing capabilities and logistics, a company can determine how it can best change its organization to slash expenses while still operating smoothly.