@Risk

The US Pharmacopeial Convention (USP) has proposed a set of recommended best practices to help the pharmaceutical industry improve supply chain integrity and reduce risks of counterfeit or mishandled medicines.

Improvements like these are long overdue. As I reported last spring, research from PwC concluded that many pharmaceutical supply chains have suffered from what amounts to benign neglect. As a result, they are inefficient, under-utilized and ill-equipped to cope with new medicines, cost pressures and health reform expectations.

Sure, in today’s global economy relationships between suppliers and other business entities are often opaque and difficult to track, but clearly, it’s time for the pharmaceutical industry to step up to better ensure that medicines can be traced back to their original manufacturer, are not adulterated or counterfeited and are transported to their intended destination with their quality intact.

Too many companies have discovered the hard way that “willful blindness” only increases their culpability in the eyes of Federal agents, regulators who now are cracking down on businesses that aren’t compliant with the Foreign Corrupt Practices Act (FCPA).

Don’t take that kind of risk. Resolve that this is the year to start better managing your multiple supplier master databases as you monitor and mitigate supplier risk in a global operating arena.

“There is incentive for all players in the pharmaceutical industry—large and small companies, regulators and standards-setting bodies—to come to some agreement on hotbutton issues such as track and trace technology and, at the larger level, to codify what constitutes a solid, universal approach to global supply chain integrity,” said Praveen Tyle, Ph.D., chief science officer for USP.

USP’s proposed standard covers four main areas: (more…)

Economic uncertainty in the EU is leading European manufacturers to scale-back operations, investment projections and optimism.

In fact, recently released Q3 ’11 results of the MFGWatch Quarterly Survey of North American & EMEA Manufactures show that:

• Only about one-third (35 percent) of the European supply-side manufacturers polled reported business growth in Q3’ 11 –that’s down from 44 percent in Q2.
• About the same amount (34 percent) of suppliers said their businesses have contracted –that’s nearly double the 18 percent who reported contraction in Q2.
• Buy-side manufacturers in Europe aren’t faring any better. Sourcing manufacturers in the EU reported growth in their businesses fell from 44 percent to 27 percent in Q3’11. Buy-side manufacturers indicating contraction rose from 16 percent to 30 percent over the same period.

In addition, the survey found that both buy-side and supplier manufacturers in Europe are hiring less and laying off more employees. Among supply-side manufacturers, 13 percent fewer added jobs, while another 13 percent more shed jobs (20 percent, up from 3 percent in Q2’11). Sourcing manufacturers also saw employment dwindle – with 27 percent adding jobs (down from 31 percent) and 18 percent decreasing payroll (up from 9 percent in Q2’11).

What’s more, as MFGWatch points out, perhaps the most telling results that point to the worsening European economic conditions are: (more…)

Several materials used in the manufacture of clean energy technologies such as wind turbines, electric vehicles, solar cells and energy-efficient lighting are at risk of supply disruptions in the short term, according to a new report released by the US Department of Energy (DOE).

The 2011 Critical Materials Strategy is DOE’s second report on this topic and provides an update to last year’s analysis. After its analysis, the DOE has concluded that:

• Supply challenges for five rare earth elements (REEs) (dysprosium, neodymium, terbium, europium and yttrium) may affect clean energy technology deployment in the years ahead.
• The risks of supply disruptions in the short term will generally decrease in the medium and long term.

The report also includes a discussion of DOE’s strategy to address these critical materials challenges. DOES says its strategy rests on three pillars: (more…)

China is exposed to significant natural threats, including earthquakes, windstorms, floods and tsunamis, and a new study from FM Global revealed there is growing concern that a natural disaster in China will have a severe impact on supply chains –even more than the 2011 Japan earthquake and tsunami did.

The FM Global Supply Chain Risk Study surveyed 100 financial execs at large multinational corporations and found that: (more…)

Rising labor costs and quality concerns have many US companies reevaluating their overseas strategies.

In fact, new research conducted by Cook Associates Executive Search found that a full 85 percent of manufacturing executives see the possibility of  certain manufacturing operations returning to the US.

What are the reasons for this potential shift? Survey participants cited:

• overseas costs (37 percent)
• logistics (19 percent)
• other, including economic/political issues, quality and safety concerns, patriotism and overseas skills shortages for highly technical manufacturing processes (36 percent)

The study, which polled nearly 3,000 manufacturing executives primarily in small- to mid-sized US companies from October 13 through November 18, 2011, identified low-volume, high-precision, high-mix operations, automated manufacturing and engineered products requiring technology improvements or innovation as the primary forms of manufacturing returning to the US. (more…)