What is a Supply Chain?<\/strong><\/h2>\nA supply chain is made up of all the participants in manufacturing and distribution channels. This includes the producers and logistics providers that move inputs from one stage to the next. Along with wholesalers, distributors, and retailers who ensure products are available to the consumers who want them.<\/p>\n
Supply chains are shaped by a complex network of relationships. These relationships affect not only the movement of supplies from place to place but also the incentives of companies to invest in producing new products.<\/p>\n
Recent Changes to Supply Chains<\/strong><\/h2>\nSupply chains have become more complex, interconnected, and global than ever before. While the increased globalization of production has helped reduce consumer prices in the United States, it also means these supply chains are more vulnerable than ever to disruption. Organizations have seen a significant increase in the number of supply chain disruptions since 2020 compared to prior years.<\/p>\n
While COVID-19 was the major force driving up the number of recent incidents, other events were part of recent major supply chain disruptions and can potentially cause future disturbances. These events include:<\/p>\n
\n- Natural disasters<\/li>\n
- Cyberattacks<\/li>\n
- Transportation disruptions in both container shipping and trucking<\/li>\n
- Political instability and wars\/conflicts<\/li>\n<\/ul>\n
Understanding how to promote quick recovery is increasingly important. It is also vital for companies to have the incentive to invest sufficiently to make their supply chains more resilient. This is vital even when they may not be able to monetize all the benefits of these expenditures due to spillovers to other parts of the networked system.<\/p>\n
Supply Chain Issues<\/strong><\/h2>\nAs networks become more connected, the frequency and size of supply-chain-related risks rise. To help mitigate the impact on production, organizations have had to:<\/p>\n
\n- Reassess their supply chains to ensure product availability<\/li>\n
- Review manufacturing models<\/li>\n
- Stockpile strategic inventory<\/li>\n
- Reduce reliance on just-in-time manufacturing<\/li>\n<\/ul>\n
In addition to outsourcing or moving production overseas, companies hold less inventory on hand. Companies that had previously relied on acquiring goods quickly for a just-in-time manufacturing model have seen not only delays but in some cases, the inability to deliver goods at anticipated or contracted levels. Some 25.3 percent of organizations reported that this had a major, serious, or catastrophic impact on their business.<\/p>\n
![\"Supply](\"https:\/\/www.imperialcrs.com\/blog\/wp-content\/uploads\/2022\/05\/Supply-Chain-Shipping.jpeg\")
The BCI COVID-19: The Future of Supply Chain<\/a> report, published in June 2020, revealed that 19.6 percent of organizations are planning to stockpile more goods as a direct result of COVID-related disruptions. According to the Economic Report of the President<\/a>, 40 percent of U.S. containerized imports go through the ports of Los Angeles and Long Beach, where the rise in demand for goods, coupled with ongoing labor shortages, created significant delays. Even supply chains that had no production problems suffered from shipping bottlenecks. In addition, risks to a supply chain can grow with more global connections because a disruption in one country will affect suppliers in all other countries.<\/p>\nStudy Supply Chain Impact on Clinical Trials<\/strong><\/h2>\nBy July 2020, almost 200 companies had stopped or delayed their clinical trials because of the pandemic,\u00a0and it\u2019s estimated that about 80 percent of non-COVID-19 clinical trials were interrupted or stopped.<\/p>\n
As with other aspects of the global supply chain, the COVID-19 pandemic has impacted clinical trial supply chains<\/a>. As the pandemic continued, delays continued for months, and trials that were in progress were hampered as any inventory redundancies built into their supply chain eroded. Sustained, high-level supply chain shortages stretched across all areas of health care, with 8 to 10 times as many items in short supply compared to pre-pandemic levels.<\/p>\nRaw material availability, governmental allocation of medical ancillary supplies, and transportation disruptions also created problems for the clinical trial supply chain. These disruptions have increased the need for stronger supplier and courier relationships. Every delay, from equipment and supplies not arriving at a clinical site on time to patients unable to complete their visit, creates an avalanche of effects. These effects can range from decreased patient retention to increased time to market.<\/p>\n
![\"Clinical](\"https:\/\/www.imperialcrs.com\/blog\/wp-content\/uploads\/2022\/05\/Clinical-Trial-Supply-Chain.jpeg\")
Making Clinical Trial Supply Chains Resilient<\/strong><\/h2>\nIt\u2019s important for the management team to focus on mitigating supply chain risk through supply chain resilience. Supply chain resilience is the ability of your organization to plan for, respond to, and recover from disruptions in a timely and cost-effective manner.<\/p>\n
Practices to make your clinical trial supply chain more resilient include:<\/p>\n
\n- Understanding the structure of your organization\u2019s supply chain<\/li>\n
- Investing in backup capacity<\/li>\n
- Diversifying your supplier base<\/li>\n
- Improving the ability to substitute items<\/li>\n<\/ul>\n
The downside is that these strategies, especially redundancy, increase costs. Unfortunately, there is no cost-effective measure for your company to invest in to completely remove all risk from your study supply chain.<\/p>\n
Strategies to Mitigate Clinical Study Supply Chain Risks<\/h2>\n
There is no single optimal way to organize a supply chain, and even within the same industry, many companies will often choose different strategies. Some best practices to consider in mitigating your clinical study supply chain risks are:<\/p>\n
\n- Business continuity planning<\/strong> \u2013 Your organization\u2019s plan to continue critical business functions in the event of an unplanned disaster<\/li>\n
- Diversification<\/strong> \u2013 Expand your network of suppliers and transportation affiliates<\/li>\n
- Agility<\/strong> \u2013 The speed at which both product and decision-making shifts can occur<\/li>\n<\/ul>\n
Business continuity planning that includes a focus on supply chain risk is essential to proactively identify threats to your study supply chain before they occur, so alternatives or relief efforts can be identified in advance.<\/p>\n
Diversifying your supplier base can also help reduce inventory shortages by creating a wider network of suppliers to provide goods and services. It is important to have a robust vendor qualification process to ensure new vendors are reputable, product quality is satisfactory, and inventory levels are adequate. Due diligence on all key suppliers is vital to ensure suppliers will meet the appropriate quality and safety standards and supply needs.<\/p>\n
The more agility your organization has to:<\/p>\n
\n- make purchasing decisions quickly<\/li>\n
- spot-buy strategic inventory as it becomes available<\/li>\n
- approve new vendors<\/li>\n
- select acceptable product substitutions<\/li>\n
- build as much product and equipment flexibility into the clinical trial protocol as possible<\/li>\n<\/ul>\n
\u2026the easier it will be to navigate many clinical trial supply chain challenges.<\/p>\n
Strengthening Your Study Supply Chain<\/strong><\/h2>\nWhile it is likely that the supply chain crisis will continue into 2023, strengthening relationships with key suppliers is important. This, along with opening the doors to new suppliers, product flexibility, and contingency planning, will help meet your ongoing demand for goods and services. Imperial\u2019s management team has made the resilience of our supply chain a priority and taken the needed steps to ensure continuity and avoid disruptions.<\/p>\n
Additional Sources<\/strong><\/h2>\nBaldwin R, Freeman R. 2022. Risks and Global Supply Chains: What We Know and What We Need to Know. Annu. Rev. Econ. 14: Submitted. DOI: 10.1146\/annurev-economics-051420-113737.<\/a><\/p>\nSupply Chain Resilience Report 2021. https:\/\/www.thebci.org\/static\/e02a3e5f-82e5-4ff1-b8bc61de9657e9c8\/BCI-0007h-Supply-Chain-Resilience-ReportLow-Singles.pdf<\/a>.<\/p>\n
Supply chains have become more complex, interconnected, and global than ever before. While the increased globalization of production has helped reduce consumer prices in the United States, it also means these supply chains are more vulnerable than ever to disruption. Organizations have seen a significant increase in the number of supply chain disruptions since 2020 compared to prior years.<\/p>\n
While COVID-19 was the major force driving up the number of recent incidents, other events were part of recent major supply chain disruptions and can potentially cause future disturbances. These events include:<\/p>\n
- \n
- Natural disasters<\/li>\n
- Cyberattacks<\/li>\n
- Transportation disruptions in both container shipping and trucking<\/li>\n
- Political instability and wars\/conflicts<\/li>\n<\/ul>\n
Understanding how to promote quick recovery is increasingly important. It is also vital for companies to have the incentive to invest sufficiently to make their supply chains more resilient. This is vital even when they may not be able to monetize all the benefits of these expenditures due to spillovers to other parts of the networked system.<\/p>\n
Supply Chain Issues<\/strong><\/h2>\n
As networks become more connected, the frequency and size of supply-chain-related risks rise. To help mitigate the impact on production, organizations have had to:<\/p>\n
- \n
- Reassess their supply chains to ensure product availability<\/li>\n
- Review manufacturing models<\/li>\n
- Stockpile strategic inventory<\/li>\n
- Reduce reliance on just-in-time manufacturing<\/li>\n<\/ul>\n
In addition to outsourcing or moving production overseas, companies hold less inventory on hand. Companies that had previously relied on acquiring goods quickly for a just-in-time manufacturing model have seen not only delays but in some cases, the inability to deliver goods at anticipated or contracted levels. Some 25.3 percent of organizations reported that this had a major, serious, or catastrophic impact on their business.<\/p>\n
The BCI COVID-19: The Future of Supply Chain<\/a> report, published in June 2020, revealed that 19.6 percent of organizations are planning to stockpile more goods as a direct result of COVID-related disruptions. According to the Economic Report of the President<\/a>, 40 percent of U.S. containerized imports go through the ports of Los Angeles and Long Beach, where the rise in demand for goods, coupled with ongoing labor shortages, created significant delays. Even supply chains that had no production problems suffered from shipping bottlenecks. In addition, risks to a supply chain can grow with more global connections because a disruption in one country will affect suppliers in all other countries.<\/p>\nStudy Supply Chain Impact on Clinical Trials<\/strong><\/h2>\n
By July 2020, almost 200 companies had stopped or delayed their clinical trials because of the pandemic,\u00a0and it\u2019s estimated that about 80 percent of non-COVID-19 clinical trials were interrupted or stopped.<\/p>\n
As with other aspects of the global supply chain, the COVID-19 pandemic has impacted clinical trial supply chains<\/a>. As the pandemic continued, delays continued for months, and trials that were in progress were hampered as any inventory redundancies built into their supply chain eroded. Sustained, high-level supply chain shortages stretched across all areas of health care, with 8 to 10 times as many items in short supply compared to pre-pandemic levels.<\/p>\n
Raw material availability, governmental allocation of medical ancillary supplies, and transportation disruptions also created problems for the clinical trial supply chain. These disruptions have increased the need for stronger supplier and courier relationships. Every delay, from equipment and supplies not arriving at a clinical site on time to patients unable to complete their visit, creates an avalanche of effects. These effects can range from decreased patient retention to increased time to market.<\/p>\n
Making Clinical Trial Supply Chains Resilient<\/strong><\/h2>\nIt\u2019s important for the management team to focus on mitigating supply chain risk through supply chain resilience. Supply chain resilience is the ability of your organization to plan for, respond to, and recover from disruptions in a timely and cost-effective manner.<\/p>\n
Practices to make your clinical trial supply chain more resilient include:<\/p>\n
- \n
- Understanding the structure of your organization\u2019s supply chain<\/li>\n
- Investing in backup capacity<\/li>\n
- Diversifying your supplier base<\/li>\n
- Improving the ability to substitute items<\/li>\n<\/ul>\n
The downside is that these strategies, especially redundancy, increase costs. Unfortunately, there is no cost-effective measure for your company to invest in to completely remove all risk from your study supply chain.<\/p>\n
Strategies to Mitigate Clinical Study Supply Chain Risks<\/h2>\n
There is no single optimal way to organize a supply chain, and even within the same industry, many companies will often choose different strategies. Some best practices to consider in mitigating your clinical study supply chain risks are:<\/p>\n
- \n
- Business continuity planning<\/strong> \u2013 Your organization\u2019s plan to continue critical business functions in the event of an unplanned disaster<\/li>\n
- Diversification<\/strong> \u2013 Expand your network of suppliers and transportation affiliates<\/li>\n
- Agility<\/strong> \u2013 The speed at which both product and decision-making shifts can occur<\/li>\n<\/ul>\n
Business continuity planning that includes a focus on supply chain risk is essential to proactively identify threats to your study supply chain before they occur, so alternatives or relief efforts can be identified in advance.<\/p>\n
Diversifying your supplier base can also help reduce inventory shortages by creating a wider network of suppliers to provide goods and services. It is important to have a robust vendor qualification process to ensure new vendors are reputable, product quality is satisfactory, and inventory levels are adequate. Due diligence on all key suppliers is vital to ensure suppliers will meet the appropriate quality and safety standards and supply needs.<\/p>\n
The more agility your organization has to:<\/p>\n
- \n
- make purchasing decisions quickly<\/li>\n
- spot-buy strategic inventory as it becomes available<\/li>\n
- approve new vendors<\/li>\n
- select acceptable product substitutions<\/li>\n
- build as much product and equipment flexibility into the clinical trial protocol as possible<\/li>\n<\/ul>\n
\u2026the easier it will be to navigate many clinical trial supply chain challenges.<\/p>\n
Strengthening Your Study Supply Chain<\/strong><\/h2>\n
While it is likely that the supply chain crisis will continue into 2023, strengthening relationships with key suppliers is important. This, along with opening the doors to new suppliers, product flexibility, and contingency planning, will help meet your ongoing demand for goods and services. Imperial\u2019s management team has made the resilience of our supply chain a priority and taken the needed steps to ensure continuity and avoid disruptions.<\/p>\n
Additional Sources<\/strong><\/h2>\n
Baldwin R, Freeman R. 2022. Risks and Global Supply Chains: What We Know and What We Need to Know. Annu. Rev. Econ. 14: Submitted. DOI: 10.1146\/annurev-economics-051420-113737.<\/a><\/p>\n
Supply Chain Resilience Report 2021. https:\/\/www.thebci.org\/static\/e02a3e5f-82e5-4ff1-b8bc61de9657e9c8\/BCI-0007h-Supply-Chain-Resilience-ReportLow-Singles.pdf<\/a>.<\/p>\n
- Diversification<\/strong> \u2013 Expand your network of suppliers and transportation affiliates<\/li>\n
- Business continuity planning<\/strong> \u2013 Your organization\u2019s plan to continue critical business functions in the event of an unplanned disaster<\/li>\n