(313d) Enhancing Pharmaceutical Supply Chain Resilience: A Multi-Objective Study with Disruption Management

The pharmaceutical industry occupies a crucial position in the global economy, experiencing a remarkable sixfold increase in the trade value of pharmaceutical goods from $113 billion in 2000 to $629 billion in 2010^1,2. However, globalization has ushered in additional complexities - including inflations, geopolitical tensions, emergence of novel medicinal modalities, and evolving work practices- necessitating a proactive and adaptable management strategy for sustained success^3,4.

In this study, we tackle the problem of pharmaceutical supply chain optimization using a multi-objective model that simultaneously considers cost minimization, environmental impact minimization, and maximizing of service level equity (minimum ratio). This represents the three alms of sustainability which are key in manufacturing. Furthermore, we developed a disruption model capable of effectively managing disruptions within the supply chain and compared the capabilities with the baseline model.

The result shows how the supply chain network behaves under different objectives. Minimizing costs led to maximizing capacity utilization, while environmental objectives result in reduced production levels to meet coverage requirements, and maximizing the minimum ratio expands more facilities. Using an epsilon constraint, the trade-off shows that the environmental budget limits the flexibility between the other total cost achievable and the minimum ratio. Comparing the baseline model and the disruption model underscores the importance of proactive disruption management in maintaining service levels and managing costs effectively. Ultimately, our study offers practical insights for optimizing pharmaceutical supply chains, balancing economic efficiency with social responsibility to navigate disruptions and challenges successfully.

Bibliography

(1) Four ways pharma companies can make their supply chains more resilient | McKinsey. https://www.mckinsey.com/industries/life-sciences/our-insights/four-way… (accessed 2023-10-13).

(2) Six new pharmaceutical industry trends | McKinsey. https://www.mckinsey.com/capabilities/operations/our-insights/emerging-… (accessed 2023-10-13).

(3) Duarte, I.; Mota, B.; Pinto-Varela, T.; Barbosa-Póvoa, A. P. Pharmaceutical Industry Supply Chains: How to Sustainably Improve Access to Vaccines? Chemical Engineering Research and Design 2022, 182, 324–341. https://doi.org/10.1016/j.cherd.2022.04.001.

(4) Badejo, O.; Ierapetritou, M. Integrating Tactical Planning, Operational Planning and Scheduling Using Data-Driven Feasibility Analysis. Computers & Chemical Engineering 2022, 161, 107759. https://doi.org/10.1016/j.compchemeng.2022.107759.