Read this article to learn more about supplier management, its main challenges and benefits, and how to effectively and efficiently manage your suppliers.

The pharmaceutical industry plays a fundamental role in our society, as it is responsible for carrying out the research and development, manufacturing and distribution of drugs for humans and animals. These products are essential for promoting health and well-being, in addition to preventing and treating various diseases.

However, the quality of these drugs depends on the inputs used in their production. For this reason, supplier management is a strategic and challenging activity, which involves aspects such as quality, sustainability, regulations and logistics. Suppliers are crucial to the success of the pharmaceutical industry, as any failure in the supply chain can have serious consequences for the health of patients and the reputation of the company.

Thus, it is essential that pharmaceutical companies manage their suppliers adequately, ensuring that the inputs used in production processes are safe and effective. In this article, we will discuss what supplier management is, its main challenges and benefits, and how to manage suppliers effectively and efficiently. Continue reading to learn more about this important activity.

What is Supplier Management?

Supplier management is the process of planning, coordinating, controlling and evaluating the relationship between a company and its suppliers, aimed at ensuring that the company’s needs and expectations are satisfied with respect to the products and services purchased.

In the pharmaceutical industry, supplier management is especially important, as it involves the acquisition of raw materials, packaging, equipment and logistics services, among others, that are essential for the production and distribution of drugs.

What are the main challenges for supplier management in the pharmaceutical industry?

Some of the main challenges for supplier management include:

Quality assurance of inputs: the quality of inputs is critical for the manufacture of drugs. Thus, it is essential that suppliers are periodically assessed and audited to ensure they comply with the sector’s technical and legal requirements. Moreover, it is necessary to constantly monitor the quality of inputs delivered with laboratory tests and analyses.

Sustainable production: the pharmaceutical industry has great social and environmental responsibility, as its products can directly impact the health of people and the planet. For this reason, it is important that suppliers also have an ethical and sustainable approach in their activities to avoid wasting natural resources, generating polluting waste and exploiting irregular labor.

Compliance with regulations: the pharmaceutical industry is one of the most regulated sectors in the world, as it involves public health and consumer safety. Suppliers have to comply with the standards and legislation in force in the country and globally, such as Good Manufacturing Practices (GMP), the standards of Brazil’s National Health Surveillance Agency (ANVISA) and the international standards of the World Health Organization (WHO).

Efficient logistics: logistics is also a critical factor, as it involves the transport and storage of inputs and manufactured drugs. Efficient logistics must ensure that the products reach their final destination in perfect conditions for use, respecting technical specifications and established schedules. In addition, efficient logistics should avoid the loss or deviation of products, as well as optimize operating costs.

Delivery capacity: the company should ensure that suppliers have the capacity to meet production demands, considering delivery times and the required quantity of raw material.

Cost management: it is important to source suppliers that offer competitive prices without compromising the quality of products and services delivered.

What benefits can supplier management offer the pharmaceutical industry?

Supplier management offers a number of benefits to companies in the sector, such as:

Improved product quality: by relying on qualified and reliable suppliers, your organization can ensure that its products are of high quality, meet safety standards and satisfy customer expectations and market requirements.

Risk reduction: by constantly monitoring and evaluating suppliers, you can reduce the risk of failures in production processes, as well as avoiding legal or sanitary problems arising from the use of inappropriate or irregular inputs.

Greater competitiveness: by optimizing supplier management, an organization can improve its competitiveness in the market, as it enables the company to reduce operating costs, improve production efficiency and innovation capacity and strengthen its institutional image.

Cost reduction: effective supplier management helps in negotiating lower prices and optimizing purchasing processes, resulting in cost reductions.

Supply chain improvements: supplier management helps to improve supply chain efficiency by reducing delays and problems in production processes.

Regulatory compliance: A deficient supplier can undermine a pharmaceutical company’s regulatory compliance, which can result in serious fines and penalties. Effective supplier management helps to ensure compliance and reduce regulatory risk.

Innovation and continuous improvement: supplier management can result in new ideas and technologies that can improve the efficiency and quality of production processes.

Collaborative relationships: supplier management can help build more collaborative relationships between pharmaceutical companies and suppliers, which can result in better practices and mutual benefits, aiming at aligning expectations and solving any problems that may arise along the supply chain.

How to implement effective supplier management in the pharmaceutical industry?

For effective supplier management, you need to follow some basic steps:

  1. Supplier selection: this involves identifying and selecting the most suitable suppliers for each type of product or service required by the pharmaceutical industry. To do this, you have to carry out market research, analyze the commercial and technical proposals of potential suppliers and verify their market reputation.
  1. Evaluate the technical capacity of suppliers: before closing any deal, it is important to assess whether the supplier is able to supply the necessary materials and components and ensure quality and safety.
  1. Document evaluation: this is the verification of documents required by law, such as registrations or license certificates and proof of compliance with the quality management system, in addition to other relevant technical specifications.
  1. Supplier audit: this is necessary to ensure that suppliers comply with the required safety and quality standards. To ensure this, it is necessary to carry out periodic audits.
  1. Risk analysis: this involves the identification of risks associated with the supplier, such as questionable production practices or lack of quality control, among other situations that could affect the quality of the final product.
  1. Qualification: this consists of verifying that the selected suppliers meet the minimum requirements required by the pharmaceutical industry for quality, sustainability, regulations and logistics. It is necessary to request supporting documents, carry out on-site or remote audits and apply questionnaires or evaluation checklists.
  1. Supplier Approval: after analyzing all the aspects mentioned above, the pharmaceutical company decides whether or not to approve the supplier to start their business partnership. If approved, the supplier joins the company’s list of qualified suppliers.
  1. Contracting: this consists of formalizing the business agreement with the supplier in a contract that establishes the conditions and rights and obligations of both parties. The contract should be clear, objective and detailed, containing aspects such as scope, terms, prices, payment methods, guarantees and penalties.
  1. Partnerships: it is important for the pharmaceutical industry to establish lasting partnerships with their suppliers, aimed at collaborative relationships and ongoing improvements in processes.
  1. Verify the quality of inputs: the quality of inputs provided by suppliers is fundamental for the quality of the drugs produced. It is important to verify that the inputs and components supplied meet the established requirements.
  1. Continuous supplier monitoring: this consists of monitoring and controlling the supplier’s performance over the duration of the contract, verifying that the supplier is complying with the agreement and delivering quality products and services. It is important to establish performance indicators, such as punctuality, compliance and satisfaction, among other indicators, and collect data in reports, spreadsheets and computerized systems.
  1. Supplier performance evaluation: this involves analyzing the results obtained by monitoring the supplier and comparing them with the expected results. This assessment should be carried out periodically, quantitatively and qualitatively, considering aspects such as cost-benefits, risk-benefits and added value, among others. This assessment should generate constructive feedback for the supplier, recognizing its strengths and pointing out opportunities for improvement.

I hope these steps help you to manage suppliers more effectively in the pharmaceutical industry. If you want to learn more about this topic, access our other content:

How to make a supplier quality manual?
Five best practices in supplier management
Daiane Loeffler


Daiane Loeffler

Daiane Loeffler is a Business Analyst at SoftExpert. She holds a degree in Chemical Engineering from UNISOCIESC, a specialization in Process Engineering from Sustentare Business School, and a specialization in Pharmaceutical Engineering from Instituto Racine. She is experienced in the Processes and Quality Systems areas and has expertise on Good Manufacturing Practices, Risk Management, Audits, Root Cause Analysis, CAPA, FMEA, PPAP, APQP and Six Sigma.

You might also like:

Get free content in your inbox!

Subscribe to our Newsletter and get content about corporate management's best practices produced by specialists.

By clicking the button below, you confirm that you have read and accept our Privacy Policy.

Please, fill out the form to download

Required field
Required field
Required field
Please enter a valid phone number
Required field

By clicking the button below, you confirm that you have read and accept our Privacy Policy