Doctors, pharmacies and patients throughout the US and Europe have been plagued by prescription drug shortages in recent years. A lack of financial incentive — thanks to rising energy costs and the “low-margin” nature of many popular medications — is one reason that many pharmaceutical companies fail to maintain adequate stock of their supplies, according to The Wall Street Journal. However, another more pressing issue is a lack of visibility in the supply chain, which is exacerbated in the drug supply by an overdependence on foreign manufacturing.
Visibility is the capacity to view important information throughout a facility or supply chain no matter where the information is located. But as a bipartisan bill in the Senate notes, US dependence on drug manufacturing in China, specifically, is a national security risk; foreign government leaders can cut off access to their products at any time, leaving US consumers without their life-saving medication. Because of a lack of transparency in the industry, neither the government nor the pharmaceutical companies know who is sourcing the ingredients used in these medications. There is no standardized data, no international regulatory organization and no industrywide agreement about what information can be shared without revealing proprietary materials. “The more diffuse and fragmented the supply chain is … the greater the risk that important information about the origin, production volume, distribution chain and integrity of products can be lost, and with it the ability to identify potential problems,” reports nonprofit organization USP.
Pharmaceuticals isn’t the only industry struggling with a lack of visibility in its supply chain, but it’s one that would reap immediate benefits. Adopting new technologies, such as tracking products and materials with IoT, investing in data analytics software and increasing automation via machine learning, is a step supply chain professionals can take to better understand the movements, viability and security of their suppliers — and their suppliers’ suppliers.