Assignment Sample on MG5573 Logistics and Supply Chain Management
Introduction
Supply Chain Management (SCM) is a systematic approach or process which plays a crucial role in the success of a modern organization. In this report, the various aspects of supply chain and logistics management in Pfizer Inc will be discussed in detail while analysing the logistics operations of Covid-19 vaccine called Comirnaty developed by the company.
Overview of Pfizer as a pharmaceutical company
Pfizer Inc is one of the leading pharmaceutical companies in the world having its p[resence in all the continents of the world along with winning patients and healthcare professionals’ trust regularly. The company is engaged in regular innovation in its manufacturing processes while focusing largely on the quality assurance systems to ensure patient safety and high quality medicines. Pfizer Inc, founded in the year 1849 in the city of New York, USA, became the largest producer of the miracle drug named Penicillin as the company for thee first time in the world enjoyed the prestigious mass drug producing company with the help of deep tank fermentation. The company started the production of the Covid-19 vaccines in collaboration with BioNTech under the Emergency Use Authorisation (EUA) from USFDA in late 2020s with the help of its well advanced research and development teams (Pfizer.com. 2021).
According to the above figure, the company has achieved a significantly high clinical success rate as compared to the overall pharmaceutical industry and the end to end phase of clinical tests are the Key Performance Indicators (KPIs) of the company’s credibility. In the year 2020, Pfizer Inc reached the revenue of $41.9 billion which increased by 2% from the previous financial year duer to the impact of pandemic of Covid-19 and increase in Covid-19 vaccination demands (Pfizer.com. 2021). Moreover, the worldwide operating Multinational Corporation (MNC) employs around 78,500 people globally of which around 48% of the workforce are women and only 32% are US citizens, making the company highly culturally diversified. The company has global presence majorly in the European Union (EU), Asia and the UK and the success of the company largely depends on the emerging markets’ political stability, healthcare spending of the population and international trade regulations.
Description of the supply chain and logistics operations in the pharmaceutical industry
The supply chain operations in the pharmaceutical industry of the US or the world are highly complex as it involves several licences and trade barriers to be cleared successfully to transport any product from one place to another. However, it may be argued that supply chain and logistics operations in the pharmaceutical industry have to undergo various quality checking processes in order to get clearance from concerned government authorities before even starting the production process. The clinical test success rates are highly crucial for the successful logistics of the drugs as these tests are the deciding factors in initiating the mass production for meeting the consumer demands. On the other hand, the supply chain and logistics operations in the pharma sector involve different layers such as manufacturing companies, government authorities, transport agencies, large scale distributors, carrying and forwarding agents, hospitals or healthcare facilities, small scale retailers and finally the consumers or the patients (Illahi and Mir, 2021).
The arrangement of good quality raw material is the key in the production of high efficacy drugs which are to be purchased from good quality suppliers at reasonable prices so as to maintain their affordability of the final drug. Since the customer spending habits in the health sector is one of the main determining factors in the demand for a particular medicine brand, the rate offered by the supplier has to be negotiated critically. The packaging in the pharma sector is also critically important for the product quality such as the Covid-19 vaccines and the efficacy of the particular medicines. The packaging is to be completed with a verified process which also includes proper quality control as per the guidelines of USFDA and the finished products are to be shipped to different global warehouses (Sinha et al., 2021). The warehouses of the company also include the distributors and wholesalers based on geographical locations so that there is efficient and swift flow of the supply chains across hospitals and pharmacy chains. On the contrary, the pharmaceutical companies have marketing and distribution employees who look after the end user feedback from the customers or patients or the doctors about the actual efficacy of the drugs regularly (Wamba and Queiroz, 2020).
Description of the supply chain and logistics operations in Pfizer regarding Covid-19 vaccines
Upstream and downstream supply chain of Pfizer
The production of the Covid-19 vaccines or Comirnaty by the company has been in joint collaboration with BioNTech, though it has not been licensed by the USFDA. However, it may be argued that vaccine production has begun lately in the year 2020 under the EUA procedures and has been distributed all over the world successfully (Pfizer.com. 2021). On a contradictory note, there are several challenges in the supply chain of the company which has regularly complicated the shipment of the drugs at the required locations. One of the major complications may be considered as the trade barriers and international relations among the USA and other foreign nations which may fluctuate the Covid-19 vaccines pricing in different locations. The factors influencing the hasslefree supply chain and logistics operations are to be highly organised in order to maintain the efficiency in the supply chain. The factors influencing the successful supply chain operations may be classified into upstream and downstream supply chains which are critical in their own way.
According to the above mentioned figure, it may be specifically mentioned that supply chain operations consist of various factors such as dealers, consumers, suppliers and logistics companies which are crucial for the effortless supply of Covid-19 vaccines or Comirnaty in Pfizer Inc. The company engages in fruitful deals with around 86 raw material suppliers spread across 19 different countries such as Brazil, USA, India, China, Thailand, Argentina and other relevant locations (Refer to Appendix 1). Furthermore, around 280 components which are required to be assembled in the production of Covid-19 vaccines and these are to be procured within a specific time period after the rigorous quality checks. Pfizer has collaborated with many companies in different time zones for the logistics of the vaccines and production processes. Covid-19 vaccines. The upstream supply chain in the company may be considered as having the supply chain solutions, factories, raw materials procurements, production technology combined with proper and effective logistics delivery fleets. The delivery fleets may be classified as airplanes, ships or road vehicles for domestic delivery of the consumer order received from large scale hospitals or wholesalers and distributors (Dutta et al., 2020).
On a contradictory note, the downstream supply chain of Pfizer Inc works with the unloading of the finished products in the warehouses or at the location of the wholesalers or distributors and then followed by the delivery of the ordered quantity of drugs at the required pharmacy or hospitals for patient consumption. The logistical part of delivering the vaccines to the hospitals and pharmacies are carried out by the individual transport operations by the distributors or wholesalers in their own physical locations (Choi and Luo, 2019). However, Pfizer has its own representatives who visit the markets including the pharmacies and hospitals in different locations to identify any kind of gaps in the supply chain or logistical operations of the company. The medical representatives then report the gaps in the logistics operations to the company’s senior managers who are required to take relevant actions for ensuring the efficiency of the Covid-19 vaccines distribution across international borders.
Porter’s Value chain of Pfizer’s Covid-19 vaccine
The supply chain network of the company of Pfizer Inc is highly complex in nature due to the involvement of various activities such as primary activities and supporting activities to achieve sustainability in the logistics operations. On the other hand, it may be critically mentioned that sustainability in the company’s supply chain networks regarding the efficient distribution of vaccines worldwide will definitely add value in the supply chain process and the organisation will achieve long term growth in the future. Since the pandemic is the most unexpected event occurred globally which poses a threat and challenge to the pharmaceutical companies to develop a vaccine as fast as possible for mass consumption, the logistics part became significant to its success as lockdown were imposed globally.
Pfizer Inc operated with inbound logistics in which the procurement of good quality raw materials are made from various foreign countries in accordance with urgent changes in the international trade laws due to the collaborative fight against the pandemic initiated by World Health Organisation (WHO). The inbound logistics involved the searching for good quality ingredients which had to undergo several quality checks before getting approval for mass production and ingredients are certified as safe as those are also included in fats, sugar and salts. The efficient supply of mRNA or Messenger ribonucleic acid and Lipids are crucial for production of Comirnaty and the company successfully ensured proper supply of the same during the high market demands for the vaccines (Refer to Appendix 2). Many global suppliers and domestic suppliers are involved in the process for meeting the consumer demands in the health sector and regular monitoring becomes an essential part of operations in the sustainable vaccine productions (Golan et al., 2021). Additionally, the outbound logistics involves the delivery of the finished vaccines or Comirnaty with the help of trusted delivery partners such as transport companies in the EU, the USA, Asia and Australia (Pfizer.com. 2021).
The major areas of mass consumption of Comirnaty by Pfizer may be major European countries along wirth Canada, Japan and South Africa apart from the USA and the outbound logistics of the company is specifically focused in these locations. The hasslefree outbound operations combined with excellent marketing communication through social media and global news channels have helped the company to achieve sustainable services to the patients and doctors and in the end rising profit margins. On a contradictory note, the supporting activities are also crucial for the logistics operations which includes the firm’s infrastructure, technology advancement, procurement and Human Resource Management (HRM). Pfizer is a MNC having large amounts of capital and favourable infrastructure to manufacture Comirnaty in large quantities for global distribution combined with benchmark HRM policies technology such as live vehicle tracking and Artificial Intelligence. Pfizer invests a lot of its capital and profits in the research and development domain for regular development in Covid-19 vaccines, contemporary technologies and in the training of its employees to ensure sustainable supply chain operations (Refer to Appendix 3).
SWOT analysis of Pfizer in reaction to Covid-19 vaccine supply chain distribution
The supply chain of the company of Pfizer Inc has several strengths, weaknesses, opportunities and threats which are critical success factors in the efficiency of the supply chain of the company. However, the company has more strengths and opportunities as compared to the weaknesses and threats which implies that Pfizer has the potential to succeed in the long term Covid-19 vaccines distribution. The strong factors of sustainability in the logistics of the company such as global brand value, over 100 years experience in the pharmaceutical industry and international relations with trade suppliers is the key to its efficient delivery of raw materials as well as Comirnaty vaccines (Pfizer.com. 2021).
Furthermore, it may be stated that the technological and human capital strength of the company is highly influential to the logistical networks across the globe. The technological advancements in the global supply chain of the company may include AI and live tracking of vehicles and shipments that are crucially helping the operations and logistic department of Pfizer to get access to real time data regarding the progress of vaccine shipments. The implementation of AI in the supply chain operations may enable a company to plan advanced demand forecasts, material planning, warehouse management and customer relationship management. The presence of warehouses in major developed and emerging markets such as the USA, the UK, Europe and Asia has played a crucial role in the swift operations and delivery of the vaccines at appropriate pharmacies and hospitals as and when needed.
On the other hand, it may be critically argued that Pfizer faces major weaknesses such as its limited presence in the pharmaceutical markets of Asia and Europe which typically challenges the supply chain in these areas as the demand for Comirnaty vaccines are not at par with corporate expectations. Any kind of limited market presence and lack of patient or healthcare professional awareness is negatively affecting the distribution channels of a particular medicine or drug. In addition to this, the company of Pfizer faces huge threats from the competitors in the global market in terms of price wars as many global level peers of Pfizers may provide massive trade discounts to national as well as international wholesalers. The offers or discounts in terms of trade discounts in the pharmaceutical industry are attractive to the wholesalers who may then sell the drugs at a lower retail margin to the retail pharmacies to make the drug affordable to the patients ultimately. Another threat may include non-approval of Comirnaty by USFDA and changing variants of the Coronavirus along with changing international trade laws that has the potential to adversely impact the global distribution of the vaccines (Pfizer.com. 2021). Moreover, it may be stated that there are instances of illegal trade of drugs which reduces the reliability and efficacy of particular drugs and jeopardises patient safety with increased health risk factors.
On the contrary, it may be critically asserted that Pfizer enjoys relevant opportunities in the Covid-19 vaccination market as more and more corporate investors are ready to invest in the development of the vaccines along with rising consumer demands. Needless to mention that due to the rising Covid-19 cases across the world majorly in South Asian countries and Europe due to the second wave, the pharmaceutical companies have the stage to perform excellently with their quality assured vaccines. Additionally, as more and more government initiatives are being undertaken in the world to vaccinate the citizens in respective countries, the demand for vaccines is expected to rise, providing a substantial opportunity for the vaccine producing companies to grow vaccine sales and distribution exponentially. The emergency clearance of certain pharmaceutical trade related licences by local and national governments across different countries has paved the way for more mass vaccine production in a short period of time so that patient health and safety may be ensured in the end (Sarkis, 2020).
Role of efficient supply chain and logistics management in achieving sustainable customer service
It may be asserted that even though there is a great influence of supply chain management in the growth of modern organizations. There are five important functions of supply chain management such as purchasing, operation, logistics, resource management and distribution of information. Purchasing is one of the most important functions of supply chain management in a modern organization while the purchasing power has affected the supply chain management of an organization. On the other hand, it may be envisioned that the main role of an organization is to purchase raw materials at low prices. In addition to that the purchasing policy may affect the supply chain management of an organization. The second important function of supply chain management is operation management. On a broader note, it may be implied that the operation process will help to anticipate the demand of customers while it is extremely important for an organization to manufacture products according to the demand of customers (Finkenstadt and Handfield, 2021).
Furthermore, it has been observed that the failure of the operation process may create a fatalistic impression on the supply chain management of the organization. Logistics is one of the most important functions of supply chain management although an effective logistics system will ensure the speed of service, system efficiency and cost effectiveness to achieve customer satisfaction. On the other hand, it may be opined that without an effective supply chain an organization will not be able to achieve the future goal in the long term. After the delivery of products, an organization may use reverse logistics for the return of ordered products (Sodhi and Tang, 2021). In addition to that, it is the responsibility of Pfizer to implement the return policy for damaged order products which will help to strengthen the relationship between customers and the organization.
Conclusion
Finally, it may be concluded that an effective supply chain management in Pfizer deals with the supply of raw materials to the delivery of Comirnaty vaccines to patients or hospitals in spite of having various complexities. Moreover, it may be stated that sustainable supply chain management has a significant impact on the quality of Pfizer’s vaccines even though it will help to enhance the growth and development of the organization.
Recommendations
The recommendations for efficient supply chain operations of Pfizer’s Comirnaty vaccine are as follows:-
- More and more partnerships and collaborations should be implemented for ensuring swift vaccine delivery in respective worldwide locations
- The use of AI and blockchain should be increased in the supply chain management of Comirnatry vaccines for better tracking while cooperation with logistics partners is expected
- Pfizer should focus on reducing the prices of vaccines as per the industry benchmarks in order to remain in global competition while not compromising quality
- Massive investment should be made in the area of research and development of Comirnaty to keep a track of changes in new variants of Coronavirus
- Pfizer should ensure proper security checks and monitoring systems in order to curb illegal trades of Comirnaty or other Covid-19 vaccines for the sake of patient safety and long term sustainability
- The company should also increase its social media presence to increase mass awareness regarding the importance of vaccination procedures along with guidelines which will impact the revenue and logistics of the company in the near future
References
Abbasi, B., Fadaki, M., Kokshagina, O., Saeed, N. and Chhetri, P., 2020. Modeling vaccine allocations in the covid-19 pandemic: A case study in australia. Available at SSRN 3744520.
Choi, T.M. and Luo, S., 2019. Data quality challenges for sustainable fashion supply chain operations in emerging markets: Roles of blockchain, government sponsors and environment taxes. Transportation Research Part E: Logistics and Transportation Review, 131, pp.139-152.
Dutta, P., Choi, T.M., Somani, S. and Butala, R., 2020. Blockchain technology in supply chain operations: Applications, challenges and research opportunities. Transportation research part e: Logistics and transportation review, 142, p.102067.
Finkenstadt, D.J. and Handfield, R.B., 2021. Tuning value chains for better signals in the post-COVID era: vaccine supply chain concerns. International Journal of Operations & Production Management.
Golan, M.S., Trump, B.D., Cegan, J.C. and Linkov, I., 2021. The vaccine supply chain: a call for resilience analytics to support COVID-19 vaccine production and distribution. In COVID-19: Systemic Risk and Resilience (pp. 389-437). Springer, Cham.
Illahi, U. and Mir, M.S., 2021. Maintaining efficient logistics and supply chain management operations during and after coronavirus (COVID-19) pandemic: learning from the past experiences. Environment, Development and Sustainability, pp.1-22.
Pfizer.com. 2021. Coronavirus disease (COVID-19) Facts, News & Information | Pfizer. [online] Available at: <https://www.pfizer.com/science/coronavirus> [Accessed 19 November 2021].
Sarkis, J., 2020. Supply chain sustainability: learning from the COVID-19 pandemic. International Journal of Operations & Production Management.
Saunders, L.W., Merrick, J.R. and Holcomb, M.C., 2021. Microdosing flexibility in an efficient supply chain. Journal of Operations Management, 67(3), pp.407-416.
Sinha, P., Kumar, S. and Chandra, C., 2021. Strategies for ensuring required service level for COVID-19 herd immunity in Indian vaccine supply chain. European Journal of Operational Research.
Sodhi, M.S. and Tang, C.S., 2021. Supply chain management for extreme conditions: Research opportunities. Journal of Supply Chain Management, 57(1), pp.7-16.
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