Where Do We Go From Here? The Future of Supply Management

In most organizations, supply management has evolved from a tactical and transactional activity into a strategic imperative.

Key decisions on low-­‐cost country sourcing, near-­‐ country sourcing, re-­‐shoring, and outsourcing are high on the agenda for most Chief Purchasing Officers – especially those in the Drug and Chemical industries, where innovation, speed to market, and value creation are crucial to business success.

We’re not talking a few dollars in cost savings. Rather, the goal is to fundamentally structure a supply organization capable of managing value for the short-­‐term, while driving fundamental business improvement and flexibility in the long-­‐term. And a side benefit is that your ROI will increase dramatically.

Consolidation is a way of life in the pharmaceutical industry. So how should we structure our supply chain? It might help to know that supply chains are evolving and becoming customer driven, with a high-­‐degree of integration that better meets common business needs.

To prepare our supply chains for the changes and challenges ahead, we need to study consumer trends, sourcing trends, emerging technologies, and customer requirements. We should also understand how recent regulation-­‐driven changes in the health care industry would impact our success.

It is essential to identify where you want to be, perform a current state analysis, and drive the organization and supply chain toward that new vision. In many cases, the journey takes 5 – 10 years. Indeed this is a long time to be in a state of change, but when planned and directed wisely, it’s not only bearable, it can be quite liberating for employees and for the organization.

The alternative – going about your day-­‐to-­‐day business with little thought of the future – inevitably leads to sudden, involuntary change down the road, which is much harder to deal with than doing it on your own terms, before a major crisis hits.

About the Author
Bill Michels, CPSM, C.P.M., MCIPS is President of ADR North America LLC, a specialty-consulting firm that focuses on purchasing and supply chain management. Mr. Michels is also a Senior Vice President of the Institute for Supply Management™. His ability to transform procurement and supply chain and deliver a change process has led clients to increased profitability, enhanced staff competence, and sustainable cost and value improvements.