Supply Chain Management in the Drug Industry: Delivering Patient Value for Pharmaceuticals and Biologics by Hedley ReesSupply Chain Management in the Drug Industry: Delivering Patient Value for Pharmaceuticals and Biologics by Hedley Rees

Supply Chain Management in the Drug Industry: Delivering Patient Value for Pharmaceuticals and…

byHedley Rees

Hardcover | February 22, 2011

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This book bridges the gap between practitioners of supply-chain management and pharmaceutical industry experts. It aims to help both these groups understand the different worlds they live in and how to jointly contribute to meaningful improvements in supply-chains within the globally important pharmaceutical sector. Scientific and technical staff must work closely with supply-chain practitioners and other relevant parties to help secure responsive, cost effective and risk mitigated supply chains to compete on a world stage. This should not wait until a drug has been registered, but should start as early as possible in the development process and before registration or clinical trials. The author suggests that CMC (chemistry manufacturing controls) drug development must reset the line of sight – from supply of drug to the clinic and gaining a registration, to the building of a patient value stream. Capable processes and suppliers, streamlined logistics, flexible plant and equipment, shorter cycle times, effective flow of information and reduced waste. All these factors can and should be addressed at the CMC development stage.
Hedley Rees runs the independent consulting company Biotech PharmaFlow, which specializes in pharmaceutical supply chain management. He has been actively building, managing, and continuously improving supply chains in biotech for the last fifteen years.
Title:Supply Chain Management in the Drug Industry: Delivering Patient Value for Pharmaceuticals and…Format:HardcoverDimensions:456 pages, 9.5 × 6.45 × 1.22 inPublished:February 22, 2011Publisher:WileyLanguage:English

The following ISBNs are associated with this title:

ISBN - 10:0470555173

ISBN - 13:9780470555170

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Table of Contents




1 Setting a Transformational Agenda 3

1.1 Aims and Aspirations of the Book 3

1.2 Book Format 5

1.3 Intended Readership 6

1.4 A Book About Two Worlds in Contrast 8

1.5 The Pharmaceutical Lottery 8

1.6 Supply Chain Management in Context 17

1.7 The History of Supply and Value Generation 22

1.8 The Development of Processes to Manage the Supply Chain 24

1.9 Life in SCM 25

1.10 Moving Forward 26

2 Plotting a Course to Patient Value 29

2.1 Why Focus on Patient Value? 29

2.2 Where Does the Patient Currently Fit? 29

2.3 Why Is It Necessary to Plot a Course? 33

2.4 Understanding How the Course Is Presently Set 39

2.5 Capturing Value for Patients 42

3 Pharmaceutical Drug Development 45

3.1 Drug Development’s Role in the Supply Chain 45

3.2 Introduction to Drug Development 47

3.3 The Medicinal Product 48

3.4 Clinical Trials 49

3.5 Related Development Programs 52

3.6 Managing Clinical Programs 57

3.7 Regulatory Affairs and Authorities 58

3.8 Supply Chain Management in Development Programs 65

3.9 Manufacture and Supply of Commercial Products 68

3.10 Supply Chain Management for Commercial Products 69

4 End-to-End Pharmaceutical Supply Chains 73

4.1 Introduction 73

4.2 Where Does Responsibility for the Supply Chain Lay? 74

4.3 Sponsoring Companies, License Holders, and Their Supply Chains 75

4.4 Supply Chains for Small-Molecule Products 76

4.5 Starting at the Final Destination 78

4.6 How Drugs Enter the Body 78

4.7 Design of Drug Delivery Systems 79

4.8 What This Means for the Supply Chain 82

4.9 Key Aspects of GMP and GDP in Relation to SCM 82

4.10 Overview of the Stages on Route to Patient Delivery 86

4.11 Manufacture and Supply of Biological Entities 90

5 Why Pharma Supply Chains Don’t Perform 103

5.1 Supply Chain Underperformance 103

5.2 Is There a Case to Answer? 103

5.3 Birth to Infancy: The Supply Chain Critical Stage 104

5.4 Commercial Supply Under the Patent Protection Umbrella 111

5.5 What This Means for the Pharmaceutical Supply Chain 116


6 Supply Chain Management as a Competitive Weapon 127

6.1 Competition and Business Strategy 127

6.2 The Marketing Mix 128

6.3 Porter’s Five Forces 128

6.4 Porter’s Generic Competitive Strategies 129

6.5 Porter’s Value Chain 129

6.6 Competitive Strategy and Customers 133

6.7 The Japanese Experience 142

6.8 Total Quality Management 142

6.9 Lean Thinking 143

6.10 Focusing on Value for Money 146

6.11 SCM Processes in Competitive Strategy 148

6.12 SCM in Biotech and Virtual Companies 150

6.13 Competition in Pharmaceuticals 152

7 Supply Chain Management Holistic 155

7.1 The Relevance of SCM to Pharmaceuticals 155

7.2 Production Systems and the SCM Holistic 155

7.3 The Core of SCM 156

7.4 First Principle of SCM 156

7.5 Supply Chains as a Series of Interconnected Systems 158

7.6 Processes to Manage the Supply Chain 160

7.7 A Word About Processes 161

7.8 How the SCM Processes Should Mesh Together 163

7.9 Production and Inventory Control 163

7.10 Strategic Procurement 163

7.11 Transportation, Storage, and Distribution 164

7.12 Information Systems and Technology 164

7.13 Improvement 165

8 Production and Inventory Control 167

8.1 Core Mission 167

8.2 First Principles of Production and Inventory Control 167

8.3 The Wholesome Trinity in P&IC 174

8.4 The Wholesome Trinity and Customer Expectations 177

8.5 Leveraging the Wholesome Trinity 179

8.6 The Impact of Variety on Supply Chains 180

8.7 Designing Appropriate Production Systems 183

9 Strategic Procurement 187

9.1 Core Mission 187

9.2 The Purchasing Portfolio 188

9.3 The Process of Procurement 195

9.4 Strategic Sourcing and Planning 198

9.5 Outsourcing 201

9.6 Basic Principles in Contracting for Supply 206

9.7 Finally, Typical Organizational Tension over Procurement 213

10 Transportation, Storage, and Distribution 215

10.1 Defining the Core Mission 215

10.2 International Trade and Commerce 217

10.3 The World Trade Organization 217

10.4 Intermediary Arrangements 220

10.5 Terms of Trade: Incoterms 223

10.6 Ownership of Goods: Title 225

10.7 Third-Party Logistics Providers 226

10.8 Customs 227

10.9 Shipping Regulations Relating to Materials 229

10.10 A Finishing Note 230

11 Information Systems and Information Technology 233

11.1 Overview 233

11.2 Brief Lay History of Computer Systems Development 234

11.3 Important Perspectives on Information Systems 236

12 Improvement 255

12.1 Why Improve? 255

12.2 Improvement and Production Systems 257

12.3 The Improvement Journey 258

13 Bringing the Holistic Together 277

13.1 Setting the Scene 277

13.2 The Process Explained 278

13.3 Developing an Action Agenda 285

13.4 Case Study 289


14 Improvement in Pharmaceuticals 295

14.1 Where Are We Now? 295

14.2 Subsequent Developments Since Inception 310

14.3 A Blueprint for Quality by Design 311

15 Exemplar Thinking in Organizational Improvement 335

15.1 Where Are We Now? 335

15.2 What Is Meant by "Exemplar"? 338

15.3 A Dialogue on Exemplar Improvement 338

15.4 An Approach to SCM Based on Systems Thinking 357

16 Building a Foundation for Sustainable Change 363

16.1 Focus on the Individual 363

16.2 Individuals as Leaders 368

16.3 Individuals as Motivators and the Motivated 370

16.4 Individuals as Group Members 372

16.5 Individuals as Participants in Cultural Change 376

16.6 Case Study: Miles Ltd., Bridgend, Glamorgan 378

17 A Cure for the Pharmaceutical Supply Chain 395

17.1 What Is the Disease State? 395

17.2 What Is the Label Claim for the Medicine? 396

17.3 What Will Life Hold Without the Medicine? 397

17.4 What Is This Better Way to Develop Drugs? 397

17.5 Full-Scale Production of Drugs 407

17.6 What Are the Barriers to Change? 410

17.7 What Are the Potential Benefits of Change? 413

17.8 Defining the Art of the Possible 414

17.9 Ending with the Beginning 417



Editorial Reviews

"In a series of well researched and documented chapters about the pitfalls of inappropriate practice in the end-to-end supply chains for pharmaceuticals and drugs this volume demonstrates the key problems faced by the industry in managing supply chains holistically and for customer value. It also provides useful insights into the major positioning methodologies that the industry should use to make appropriate make/buy and strategic sourcing decisions with suppliers." —Professor Andrew Cox , Chairman, Advisory Board, International Institute for Advanced Purchasing & Supply (IIAPS) "Using charts, graphic imagery and guest writers' insightful comments, this text delivers an excellent message for the corporate executive, the investor in pharma stocks, the regulatory professional and (last and least) the lawyers who advise the company.... Every reviewer has a list of wished-for items, but I pleased to say that Rees's book met all of my needs and then some.... Rees has a keen eye for what could go wrong in the drug maker's supply chain." —Professor James O'Reilly, University of Cincinnati "I found it to be a knowledgeable and insightful overview of the role of Supply Chain Management in the Pharmaceutical Industry. I found that it touches knowledgeably on both the small and large molecule products, which most texts fail to do. Hedley has done the industry a significant favor by laying out, in a single volume, a road map for how Supply Chain should function in today's Pharmaceutical Industry." —James Donlevie, Former VP - Worldwide Logistics, Global Biologics Supply Chain, Johnson and Johnson; Currently GPPS, Inc. "Through his passion to make a difference in the Pharma industry, Hedley has masterfully addressed the complexities of total supply chain management from product development through commercialization.  Building on his years of experience within Pharma and with other regulated industries, Hedley offers solutions that are insightful, proven, holistic and impactful. This easy-to-read book offers a refreshing style that keeps the reader engaged." —Marla A. Phillips, Ph.D., Director, Med-XU, Xavier University "Hedley's interesting exploration of SCM issues includes business, control, regulatory and technical aspects. The book is salted with many personal experiences which keep the reader entertained as well as informed. This book is a must read for those entering into the SCM fields as well as all those who intersect with SCM." —Bob Coleman former FDA National Expert Drug Investigator and currently Senior Compliance Expert - Pharmaceuticals, IHL Consulting Group, Inc., Atlanta, GA "This book provides guidance to help modernize the way drugs are developed, made and sold, and presents the argument that counterfeiting and poor SC [supply chain] visibility have their roots in the early stage of drug development.... The author does a great job of demonstrating the need for development of Supply Chain practices in the Pharmaceutical world. With input from various expert sources, the text reads as a 3-part case introducing those in Supply Chain to the world of Pharmaceuticals, those in Science to the world of Supply Chain, and finally a roadmap for a solution.... It may take a while longer to convince those in the Pharma world that involving SC with their R&D teams can [be a] benefit, but the change will come. Those who follow the advice of this author may well lead the way." —Rick Cleveland, P.Log., President, Altered Perspectives