10 Must-Have Supply

Chain Planning
Capabilities for
Pharmaceutical
Companies
Introduction
Despite maintaining high customer service levels, the pharmaceutical industry faces
challenges when it comes to supply chain planning (SCP) maturity and technology. Most
pharmaceutical companies have implemented supplementary planning technology in ways
that are limited in scope and do not represent best practices. Certain planning capabilities
are “must haves” for the pharmaceutical industry however the complex nature of the SCP
technology market makes it difficult for supply chain leaders to identify which functionalities
to prioritize when investing in a planning solution.
Supply chain leaders in the pharmaceutical industry must map the “must-have” planning
capabilities they need and choose a SCP solution that covers all capabilities essential to
meeting business goals.

Figure 1. 10 Must-Have Supply Chain Planning Capabilities for Pharmaceutical Companies

6. QA/QC 5. Sequencing 4. Launch

8. CMO 7. Clinical 3. Artwork
Approval and Setup and Tender
Planning Trials Planning
Flows Optimization Planning

Suppliers Purchasing Manufacturing Distr./Transp. Sales Affiliates Customers

1. Regulatory Requirements = Regulatory Planning

2. Shelf Life Requirements = Shelf Life Planning

9. Inventory Planning & Optimization 10. Strategic/Long-Range Planning

Source: Gartner

2 © 2021 Gartner, Inc. and/or its affiliates. All rights reserved. CM_GBS_1275900
An overview of “must-
have” planning capabilities
for pharmaceutical
companies
Like companies in other industries, pharmaceutical companies are beginning their digital
supply chain planning journey. There are certain supply chain planning capabilities that
are particularly important for pharmaceutical companies due to the environment that they
operate in (e.g., regulations specific for the industry, manufacturing complexity). To make
the right SCP technology investment, supply chain leaders must first map their current
planning activities while also keeping in mind maturity goals for the future (e.g., more
automated decisions).
The table below shows 10 typical must-have planning capabilities for pharmaceutical
companies and the functionalities that support these capabilities.

Must-Have Description SCP Functionality

Capability Area

Regulatory Planning As the pharmaceutical industry is Attribute-based planning,

highly regulated, companies must Unified data model
have adequate information at all including advanced pegging
levels of the supply chain to ensure functionality
regulatory requirements are met.

Shelf-life Planning All pharmaceutical products have Attribute-based planning

expiry dates and countries often have
differing requirements on how much
remaining shelf life a product must
have when entering the country.
Being able to visualize and create
plans taking shelf-life considerations
into account is essential for
operational efficiency.

3 © 2021 Gartner, Inc. and/or its affiliates. All rights reserved. CM_GBS_1275900
 Artwork Planning There are often many changes Attribute-based planning
to packaging materials for
pharmaceutical products — either
external (e.g., authorities requesting
an update to text on a carton or label)
or internal (e.g., marketing requesting
a color update). It is important to keep
track of artwork changes since they
require regulatory approval.

Launch and Tender Pharmaceutical companies perform Basic tactical demand

Planning better at demand planning compared planning capabilities
to other industries due to relatively
stable markets. Therefore, advanced
planning capabilities need not be a
priority however companies do need
solutions that are able to perform
launch and tender planning including
probability estimates.

Sequencing and Manufacturing pharmaceutical Advanced scheduling

Setup Optimization products is a complex process. capabilities
There are many constraints and
interdependencies that need to be
modelled using advanced scheduling
capabilities. Sequencing process
orders and optimizing setups are
important to fully utilize production
equipment.

QA/QC Approval The SCP solution must have strong Advanced scheduling
scheduling capabilities that are able capabilities
to overcome constraints as well as
prioritize orders towards this area.

Clinical Trials Clinical products often consist of the Integration between clinical
same raw materials or intermediates and commercial products
as the commercial products and can
be produced on the same resources.
Usually, clinical trials are managed
on a separate platform therefore it
is essential to have an interface that
integrates the relevant clinical trial
data to the SCP solution.

4 © 2021 Gartner, Inc. and/or its affiliates. All rights reserved. CM_GBS_1275900
 CMO Planning Pharmaceutical typically use contact Multienterprise planning
manufacturing organizations (CMOs) capabilities
at different levels in the supply chain.
Multienterprise planning capabilities
are needed for CMO planning as
being able to exchange different types
of data is essential for an efficient
supply chain.

Inventory Planning Pharmaceutical companies often have Advanced inventory planning

& Optimization inventory levels that are three to five and optimization capabilities
times higher than in other industries.
They need advanced inventory
planning capabilities to manage
optimum stock levels and reduce
working capital.

Strategic Planning Due to complex regulatory and Network modeling capabilities

production processes it takes
pharmaceutical companies a long
time to expand production facilities.
This requires a detailed strategic plan
over a 10–15-year horizon. Investing in
network modeling capabilities enable
companies to make strategic, data-
driven decisions for the future.

Conclusion
Once requirements are clarified leaders must choose the SCP solution most suited to
business’ needs. This includes aligning future planning ambitions with the solution providers
capabilities. If possible, companies must choose a SCP solution that covers every functional
capability requirement so that all planning tasks can be performed on the same unified
solution. This enables simulations that consider all possible constraints resulting in better
decisions and higher chances of success.

5 © 2021 Gartner, Inc. and/or its affiliates. All rights reserved. CM_GBS_1275900
About Gartner
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Supply chain risk management: How we help

Key tenets of supply chain risk management are enhancing resilience and improving
competitiveness. But supply chain risk management today must account for
unprecedented, fast-developing market disruptions as well as transformation inside
the organization, making it difficult to achieve agility and competitive advantage. To
succeed, supply chain risk management must be a collaboration between supply chain,
procurement and enterprise risk management (ERM) managers. Innovative technology
solutions and advanced analytics enable continuous review and integration of supply
chain risk management with the business. Gartner provides supply chain leaders with
insights, advice, data and tools to increase supply chain risk readiness. Visit gartner.com
to learn how we enable supply chain risk management to combat disruption.

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