- The Pharmaceutical API and Intermediates procurement is playing an important and critical role in this industry.
- Competitive Advantage : This sourcing is of competitive advantage by strengthening its capabilities in category management and cost management.
- There are opportunities for Procurement and sourcing organizations in the pharmaceutical sector.
- This is from our experience and based on an extensive survey of pharma companies show that there are great opportunities for Procurement organizations in the pharma industry.
- Some of the reasons include that pharma is a sector where Procurement is not yet in the spotlight and not yet a high priority.
- But, things change and Procurement can play a critical role and be a source of competitive advantage
- Pharmaceutical industry raw materials are quite specific, we focussed on APIs (Active Pharmaceutical Ingredients) and Intermediates, which is highly regulated, The suppliers of such active substances category management can still bring savings.
- This is because category management is about analyzing, identifying, and prioritizing actions based on a category’s specificities – it is about proactively managing procurement.
- The aspect and benefit of working on cost transparency is increasing market knowledge. Working on cost clearness is key to defining where to source from and to react to changing market conditions.
- In the pharma industry, like in other industries, low-cost country (LCC) sourcing is a key driver of savings. APIs are already mostly sourced from China or India, but LCC sourcing has to go beyond that part of the spend to include, among other things,
This is the thrilling and demanding times for the pharmaceutical API and Intermediate industry procurement and capabilities in key areas like Category Management.