Long gone are the days when manufacturers and retailers could take much more for granted in their supply chain planning. The obvious triggers – Covid, Climate and Market Disruptions have put supply chain planning into the spotlight. In this context, modern supply chains need end-to-end optimization to manage resilience and an expanded set of responsibilities. As a result, manufacturers are now asking whether supply chain planning should begin even before sourcing — with product design and production planning, which have the most impact on product availability, sustainability, production and logistics costs, and downstream processes. Through this Cover Story, we attempt at exploring the pivotal role of supply chain planning in driving efficient operations. Our industry experts share best practices, innovative approaches, and real-world examples that highlight the importance of robust supply chain planning in achieving operational excellence.
Supply chain planning is the backbone of efficient operations. When we talk about supply chain planning, it’s not only about moving goods from point A to point B, it is a comprehensive process where we ensure there is a right balance of demand, supply and resources so that we also navigate the risks, minimize costs & maximize the customer satisfaction,” these were the nuanced thoughts of the panelists during our recent summit in Bengaluru as aptly summarized by the session moderator. Panel speakers unequivocally established the crucial importance of supply chain planning for every organization and also offered their insights on deriving at an impeccable supply chain planning strategy.
Srinath Reddy
Setting the agenda of the session, Srinath Reddy, Head – S&OP, United Breweries Ltd., presented an interesting anecdote… “Before we onboarded on the journey of setting up a planning process, we used to encounter numerous challenges such as achieving the right forecast accuracy, balancing the cost effectiveness and the responsiveness levels. Another challenge that disrupted the business was withering the impact of supply chain disruptions in this VUCA world. Such disruptions should always be a part of our planning strategy, and we must ensure that our inventory or the service levels take care of these disruptions into consideration. Last but not least is effective cross-functional collaboration. It is not just the supply chain alone, we have to ensure the availability of the product at the right place in the right time, right quantity and in right quality. It requires the support of all the departments such as marketing, sales, finance and R&D and of course not to forget about sustainability and the regulatory compliances which some of the industries face. In this recent trend of ensuring that supply chains have to be sustainable and in compliance with the regulations, supply chain planning is finding immense prominence.”
In context to this, a recent Gartner report emphasized that to accomplish resiliency, supply chain planning leaders must implement dynamic digital scenario planning — a planning method that can capture all the changing circumstances and stress-test most of the assumption changes. Traditional scenario planning is inadequate for the world we live in and for our supply chains, as simultaneous changes in uncertainty types, interconnectivity and speed of change create amplified, intertwined impacts that are difficult to mitigate with simple, static strategies. Dynamic scenario planning can map all the variables and the relationships between them as events transpire. With digitalization, it is easier to organize data and sense shifts in that data as risks present themselves.
Three elements make digital scenario planning a must-have approach:
Amount of data: Before it was just internal data that needed to be cleaned, organized and modeled. Now there is external data available, too, that can be used for better decision making.
Fixed value assumption: We have assumed that variables had a constant value, either constantly right or constantly wrong. The reality is that variables have different values through time and in relation to other variables.
Parameters per variable: With complexity rising, now there are multiple angles to look at things, not just revenue or profit.
Building scenarios with technology is critical to understand where trade-offs can be made and which possible actions to take before and while disruptions occur. With this outline, here’s offering the readers strategies that will equip them in integrating supply chain planning into their overarching business strategy…
How does an organization integrate supply chain planning into its overarching business strategy, especially when you are dealing with different product categories and different geographies?
Yogesh Sarin
Yogesh Sarin, Director – Supply Chain, South Asia, Dell Technologies: You need to align your supply chain goals with larger business objectives. Different products and geographies may require distinct supply chain strategies. Segmenting the supply chain based on product characteristics, market demands, and regional requirements helps in tailoring approaches that fit each segment. The aftermarket service works a little different than manufacturing supply chain because unlike procurement based on BOM (Bill of Material), you have to plan spares availability based on failure / demand analytics. It’s important to utilize advanced technologies like AI, machine learning, and big data analytics to gain insights into demand patterns, inventory levels, and supply chain performance. Companies should foster strong relationships with suppliers, distributors, and other stakeholders to maintain an agile supply chain. Companies should customize supply chain strategies to meet local market conditions and regulatory requirements with regular review for improvement and flexibility.
Gaurav Arora
Gaurav Arora, Associate Vice President – Procurement & Strategic Sourcing, Medreich Ltd. (a Meiji group company): In the pharma and biotechnology industry, the strategies are very clear. Apart from the quality and regulatory compliances, our internal processes should be aligned to the current best practices like Current Good Manufacturing Practice (CGMP) or WHO or European Directorate for the Quality of Medicines & Healthcare (EDQM) or U.S. Food and Drug Administration (USFDA) guidelines where we need to tweak the root of synthesis in term of the process or the manufacturing setup, there are possibilities that we need to re-qualify the medicine according to the new impurities being introduced. At regular intervals, these agencies give us a new set of impurities involved into the product where even though you have a10-20 years’ old project, you may have requalification in terms of involvement of any one of the raw materials, which is now falling into their suspect raw material category. We need to qualify for that change and if possible, we need to replace that particular raw material because the new guidelines mandates companies to abide by that change.
Girish KK
Girish KK, Assistant Vice President, Reliance Retail Ventures Ltd.: The complexity in terms of number of units is immense because we have multiple formats. The process starts with the annual operating plans given by the business. It can be the short-term, which is for the immediate financial year, or it could be the mid-term for the next two years and then the long-term, which is for the next five years. Once we get this plan, we first try to look at what is required for that particular volume to be achieved, then we superimpose our current capabilities in terms of network, infrastructure, warehousing, logistics, and then figure out the SWOT analysis. Accordingly frame the requirements on a priority basis with clear timelines and the responsibility as well as milestones to be achieved. This becomes the framework or the KPI for my team. We might experience fluctuations when it’s peak season. At that time, we need to collaborate with all the stakeholders, go back to the drawing board and figure out an alternate strategy. One thing that we must keep in mind is that the logic always remains the same and that is delivering service at speed and at no incremental cost and that’s the challenge that needs to be planned.
Srinath Reddy, Head – S&OP, United Breweries Ltd.: As an S&OP leader, I integrate supply chain planning into the overarching business strategy by aligning it with organizational goals and addressing the complexities of diverse product categories and geographies. Supply chain planning not only supports but drives the organization’s strategic objectives while addressing the unique challenges of different product categories and regions.
Strategic alignment:
Ensuring S&OP processes align with business objectives like market growth, cost optimization, and service excellence.
Facilitating cross-functional collaboration to embed supply chain priorities into strategic decision-making.
Category-specific planning:
Adopting tailored approaches for different product categories, balancing cost, service levels, and inventory requirements.
Driving accurate forecasting to account for varying demand patterns across categories.
Geography-specific customisation:
Adapting supply chain plans to reflect local market dynamics, consumer preferences, and regulatory requirements.
Leveraging regional networks for agility and market responsiveness.
Technology integration:
Using planning tools to enable data-driven decision-making and ensure integration across forecasts, supply plans, and financial targets.
Providing visibility across geographies through centralized dashboards.
Scenario planning:
Conducting risk and opportunity assessments to address regional variations and disruptions.
Building flexibility into plans to respond to market shifts effectively.
With the responsibility of sourcing for both the direct and indirect spend, how do you balance cost efficiency while managing quality and supplier relationships?
Gaurav Arora: Being in the pharmaceutical industry, we have very different compliances requirements which need to be fulfilled according to the territories we do the business in. As far as metric is concerned, we are into the Europe territory range, more prominently the UK, Australia, New Zealand, Canada, etc. All of our life-saving drugs should comply with the basic parameters and quality requirements from those territories as well. One is quality where we cannot compromise, even if we get anything cost effective. Second is the expectations from the strategic point of view, we have to build year-on-year risk mitigations on all those plans where we can focus on business continuity. Direct spend is always a major focus area for any kind of pharmaceutical industry where we need to be very cautious about the quality as well as the cost because that’s where the money comes from. Around 80% of our spend is on procuring the raw material for manufacturing drugs, so while the cost is important, the quality is also equally important.
Now coming back to the overheads, when we talk about the production and manufacturing overheads of the medicine, they are quite higher in comparison to any other commodity or FMCG products because building the infrastructure, which is qualified by the regulatory agencies of Europe, or the US requires a lot of stringent methodology. Once you are done with the costing and overheads fixed, your only cost saving and your only year-on-year objectives are to reduce cost from the direct spend. Since indirect spend is not that big of a contributor to the COGs, you have to work on the alternate vendor developments, long-term contracts or the negotiation in term of bulk volume, expand territories, etc. Moreover, we are also involved in contract manufacturing in term of giving them business assurance so that they can have a yearly business assurance, and we will achieve our objective of cost savings. Those are the areas where we focus on in terms of direct material costs.
Indirect material cost includes maintenance, and the IT spend where we look for better yield or better services to enhance our performance timelines. If your indirect spent is of OpEx nature, you need to focus on increasing the life cycle of that particular maintenance so that you can get more advantage. Cost is not a hinderance for us because the quality remains fixed. We cannot change even the HVAC system because that would again need requalification. So, any change in pharmaceutical Plant needs revalidation. We only focus on the services where we can increase the life cycle so that’s how we manage the cost as well as the quality.
How has data analytics influenced your decision-making processes in planning?
Gaurav Arora: The pharma and biotechnology sectors have been the leaders when it comes to adopting technology and track & Trace technology has been getting implemented for two decades now. To tell you the fact, today it is mandatory for every manufacturer who is primarily focusing on exports, imbibe these tools. There are a lot of analytical tools available in the market that provide the requisite data on the medicines that are going to be in shortage in the next few months in target territories, and also suggesting optimal / alternate changes if required. Even though factors such as the pricing of raw material, pricing of API, import export data of all those products, competitors’ price points, the EDQM that they are selling and the constant changes in the regulatory compliances are going to fix a medicine’s price band in different countries because in some of the European countries, governments decide the price and no pharma company is allowed to sell over or below that price band. But to trace the demand pattern, there are a lot of websites available on the paid subscription basis that offer companies the requisite data to anyalyse the demand pattern. In India also, the adoption of Track & trace has increased substantially.
Girish KK: I feel we have lot of data with us, but we are unable to derive useful information out of it. In my current organization, we are trying to make sure that we are able to utilize the data from a right point of view. We have got a lot of analytical tools in place by way of which one information itself can be analyzed in multiple ways. Just to give an example if I’m looking at a stock in transit, there are multiple transporters working for us across the country. I cannot wait for their MIS to come to me directly, it has to be one single source of truth for me, and it cannot be one Excel dump where I am required to do a pivot table and work around it. Data has to come to me in a dashboard format which can be easily understood and in the near future as we progress, I’m sure this is going to control a lot of uncontrollables that we talk about.
Srinath Reddy: In the alco-bev industry, the lead time from the time we brew to the time it gets packaged as a beer ranges from 12 to 28 days with each point being a long process. At every point, we need to understand the quality and the quantity of the brew that is available and that is made possible currently with the usage of data analytics. Through technology, we know exactly at what temperature the particular brew is and what kind of quantity that we can expect to get in the next 20 days. That is helping us to compete in the market. Apart from this, we are using Connected Brewer Technology and once the product is packaged, the movement from the brewery to the warehouses gets also tracked through technology. We also use a lot of management information dashboards, which work on tools such as Power BI. In summary, we can’t discount the data driven decisions at least in planning.
How should one approach risk management in supply chain planning?
Gaurav Arora: To implement operational risk management, it is significant to get the big picture first. Risk management depends on fast and complete information of potential risks. This is related to the concept of availability. Even if a risk is known, it may not be present and documented in a certain situation. It might be identified and documented later, but in a completely different context.
It is also imperative for the risk management team to get in touch with other stakeholders and employees directly involved in related manufacturing and supply operations to regulate what they know about risks. For example, shop floor operators may have unspoken and undocumented knowledge. They know the details and can contribute to risk identification and management.
A perfect and effective risk management system can be embedded into a pharmaceutical quality system by first identifying the elements in a complex supply chain. Unit operations and interfaces are the primary work packages to be considered. Risk assessments on a unit operation level result in a risk register or risk library, which is maintained by risk ambassadors. A single process for risk management embedded in the quality system integrates project controls, management, and product quality reviews. Modern technology can be used to present the right metrics, allowing the organization to make timely, fact-based decisions about operational risks.
Srinath Reddy: I’m currently working in alco-bev industry, where we need to be aligned with the government regulations and state excise norms that keep changing with time. It becomes a challenge for us to comply with the regulations. We need to change our labels on the product very frequently and of course we have SKUs like bottles and cans, so everything needs to be changed. To do so, we have very little time in hand because it’s a highly competitive market and it’s where the customer just walks in and takes what one likes. There’s no concept of brand loyalty. That’s where it becomes very critical to manage this risk and keep everything at the back end ready. We need to have a contingency plan in place so that we are able to ensure that the product reaches the right consumer at the right time.
Girish KK: I would classify Risks into two categories – Lead risk or a known risk and a lag risk or an unknown risk. Suppose I am running a business in supply chain, I know that festive season is always going to have its own share of challenges wherein the hubs are going to be choked or the transporters are not going to be available. This is a lead risk for me, which I already know of. I need to now mitigate that with proper planning. I try to look at lines where I can optimize and send direct vehicles to the customer rather than sending it through an Express partner. I try to find alternatives and see whether I can get more regional partners into the play. I know there is a risk which can be preempted, and I have to take enough precautions and try to align my supply chain accordingly. Unknown risks are something which we don’t have control over and is similar to a regular firefighting that we do on a day-to-day basis. For instance, a vehicle was supposed to arrive at a certain time, but it broke down in the middle. This situation is something you can’t do much about. Such eventualities typically need good communication and ‘as-fast-as-possible’ kind of reaction time. In a nutshell, for me, managing risk is how does one plan for the lead and the lag risks, which makes a lot of difference in the industry.
Customer satisfaction is of paramount importance when it comes to after-sales services. In your view, what are some best ways to tackle the unique supply chain challenges in Asia particularly regarding the responsiveness to customers?
Yogesh Sarin: Let me give you a brief about aftermarket services, which also includes reverse logistics. When you sell a product, along with it, you sell a commitment, a promise that you want to serve customer for the confidence bestowed on the product and the company. Now to make that happen, you must ensure an immaculate network of supply chain in terms of spare parts availability and capability to cater to timelines you have promised at time of sale. These SLAs may again be specific to the industry and products. Considering that you have a great set of partners for spare parts supply and logistics, you start with the demand planning and forecasting, operate dynamic inventory levels, with logistics turnaround of transport that’s needed. We must also consider risk management in terms of stock-outs, compliance and import-export laws, etc., all of which need to be in sync. In short, you need to understand your customers’ needs and tailor your services to meet their expectations.
Successful supply chain planning often involves collaboration across various functions. How do you foster effective communication and collaboration between different functions like supply chain, procurement, finance and other departments?
Srinath Reddy: Fostering collaboration across supply chain, procurement, finance, and other functions is essential. We achieve this basis the following:
Aligning Goals: Ensuring all functions work towards shared metrics like forecast accuracy, BIAS, Plan adherence and the associated service levels.
Facilitating Engagement: Leading structured S&OP meetings and workshops for open dialogue and joint problem-solving by discussing forecasts, risks, opportunities, and supply-demand alignment.
Driving Transparency: Utilizing tools like Power BI etc. to provide real-time data sharing and centralized dashboards to ensure visibility across departments, ensuring all stakeholders have access to consistent and accurate information.
Building Culture: Promoting trust, open communication, and cross-functional understanding through initiatives like Talent as a Service.
Ensuring Accountability: Clarifying roles, tracking progress, and celebrating joint achievements.
This approach ensures alignment, efficiency, and agility in meeting business objectives.
Girish KK: Complexities are immense when you are managing high-volume fast fashion retail business and thus is the need to collaborate across verticals. I am talking about managing approx. 2.5- 3 crore units of merchandise coming in from vendors to the warehouses and the equal quantity of stocks is in transit from the warehouses to the retail stores.
Another reason for collaboration is the shift in the constantly evolving customer demands. About a year back, if I were to say that I’m doing my supply chain at the lowest cost and at an average of 4-5 days in terms of transit time, it used to be considered as a good supply chain model. Now there has been a dramatic shift wherein the requirement has shifted to ‘as-fast-as-possible’, making the supply chains even more critical. Just to give a perspective if I were to send a stock from Bengaluru to Hyderabad, people always compare it with the transit time of a bus, which takes about say 14 or 15 hours to reach and then ask us why can’t I deliver the same stock in terms of logistics in about 14 hours or worst case the next day. That’s the complexity I am talking about.
When it comes to planning, companies need to have a very robust system in terms of integrating or collaborating with multiple stakeholders, be it the planning team or the sourcing team or the logistics and warehousing team or the express partners whom we work with. To manage such a complex web of operations, there needs to be a robust system enabled by technology.
To deal with such contingencies, our organization has deployed a complete product life cycle management suite, fabric sourcing tool, vendor management tool, vendor PO management, carrier engine which integrates the vendor with the transporter and then the transporter has to be completely integrated in a robust way through a proper API so that there is seamless flow of data. Moreover, there are two points to it – one when you talk about the plan, earlier you take an annual operating plan and then you average out your requirement per day and I have to process so much of units, and during peak season, the volume can go up multifold. In such scenarios, I cannot take a straight-line average, which means that with the growing demand or the reduction in demand, I have to plan my supply chain efficiency accordingly. One is the overall annual operating plan. The second is to analyze the requirement from a day-to-day perspective. We need to keep the system updated with daily sales happening at the stores and the replenishment requirements getting generated out of every store on a day-to-day basis. All these require a lot of collaboration, and it has to happen in a robust way.
With the ongoing advancements in supply chain technology, what are those innovations that you find most impactful in your planning and forecasting processes?
Gaurav Arora: Decision-makers who are skilled at forecasting technology innovation have a competitive advantage. By gaining knowledge in forecasting technology, you can provide businesses with up-to-date data and analytical insights that can inform decision-making. Explore analytics tools to help companies analyze past trends and accurately predict future trends, allowing them to make more informed decisions. Here are four tested and proven methods you can explore and implement in your demand forecasting process:
Historical Data Method: Start forecasting demand by analyzing past sales data. The historical data method helps you get a rough estimate of demand for your products or services by monitoring past high and low periods of demand. It enables you to get a baseline prediction.
Market Research and Delphi Method: What better way to understand consumer demand than talking to and collecting their data? Even though this direct market research approach involves considerable efforts to send out surveys to consumers and collect and analyze their feedback, it also gives you valuable first-hand insights into the minds of consumers. Similarly, the Delphi method involves talking to market experts to get their opinion on market demand. Both methods involve human interaction and can help you draw on the knowledge of people with different areas of expertise.
Predictive Sales Analytics Method: Predictive supply chain analytics helps you estimate demand and understand what factors drive sales and how consumers will behave under certain conditions. The visibility provided by the combination of ML algorithms and advanced IoT highlights every step of the supply chain to build a demand forecast.
External Macro Forecasting Method: Analyzing trends in the broader economy and determining how they will affect your business goals helps you understand the larger external market forces. You also get to monitor the availability of raw materials and other factors that can directly or indirectly affect your manufacturing and the overall supply chain. Like previous methods, AI software helps you gather and analyze the correct information and present it as a proper report.
Accurate demand forecasting can benefit from these techniques, but to achieve ultimate success in forecasting demand, it’s vital to address obstacles and consider the significant variables influencing the predictions.
Girish KK: I would like to bring your attention to the concept of Direct Store Model, which to me, is one of the biggest innovations currently shaping up in the retail space. The logic behind the direct store model is saving time, suppose we take one week in primary transit and then another 4 days from my warehouse to the stores, I take about 10 to 12 days to reach the end consumer, which not only reduces my efficiency but also adds up on the cost. The logic is can I do this from the vendors’ warehouse directly to deliver to the store anywhere in India in about 5 days using multimodal transportation. Now this requires the integration between the vendor. The vendor has to pack at a store level. Currently he’s packing at the warehouse level. He has to pack at a store level then we need to integrate the courier partners to ensure that they’re able to pick these small parcels and then route it to pan India. Here I’m talking about serving 3,000 stores. If I talk about the combination of the entire vendor base to store, I’m talking about 6.5 - 7 lakh lines that I’m supposed to route. This is the complexity that we have, and this is going to be the first of its kind in the world as far as fashion and lifestyle is concerned. Now the question is do I have any technical backup to do this activity. The clear answer is no because it has never been done before nor has it even been thought of before, so we need to build an integrated tech platform, which starts right from the vendor. We have the platform till the vendor in terms of packing, now I need to have the visibility of what the vendor has packed, which transporter is supposed to pick up my goods, when is he going to pick up goods, if he has picked up, then at what time he’s going to deliver and how much of the percentage of stocks is delivered within the required SLA that we have been talking about. So, the entire end-to-end bit is tech development. This entire process is almost complete now, which took us 3-4 months’ time and the end-to-end visibility is currently available for us to pilot.
Given the importance of strong supplier relationships, what strategies do you find most effective for maintaining these partnerships to be productive? In these times of supply chain volatility, how do you engage with the customers and maintain those relationships?
Yogesh Sarin: Maintaining strong supplier relationships and engaging with customers effectively are crucial, especially during times of supply chain volatility. Simple strategies include consistent communication with suppliers with regular check-ins which builds trust and ensures issues are promptly addressed. Implement set of key performance indicators (KPIs) to monitor supplier performance. Regularly review these metrics to identify areas for improvement and ensure suppliers meet your standards. Focus on building long-term relationships with suppliers. This involves aligning goals, sharing risks and rewards, and fostering mutual growth. Encourage suppliers to contribute ideas for process improvements and co-develop solutions. This collaborative approach can lead to innovations that benefit both parties.
Gaurav Arora: It’s a very important question as far as our industry is concerned because there is a lot of risk involved in term of regulatory compliances. Apart from the business assurance, which we give to our partners in terms of annual or maybe long-term perspective, there are three strategies which we majorly work on before selecting them. Apart from the due diligence which we do in term of their financial health or quality, there are two types of quality audits, which we do for their qualification. We also have a different sourcing strategy in place. One is based on their technical enhancement so that they are well qualified and well aware of our requirements in terms of our territory so that the supply chain link gets completed with the final objective of regulatory requirements. For instance, if our medicine goes to the UK market and the UK Government has come up with some new norms to qualify those medicines and if we are using their raw material, we qualify those raw material vendors and their vendors also because vendors’ vendor is also now in the purview of those regulatory agencies.
To build the relationship, there are certain possibilities that they may get the disadvantage of the competition because there is a lot of competition in term of geopolitical issues. Suppose if I am having a vender in India and another vendor from China is supplying those raw materials at cheaper cost, there are chances that companies would like to go with the vendors with the lesser cost. Having said that, it’s not always the case because beyond cost, we need to judge them on the basis of the quality parameter as well. Again, there is another possibility of giving them the cost advantage by increasing the volume or increasing the yield of those raw materials. In a nutshell, we work together on a model which can enhance their yield to produce 1kg of material, which goes into our finished products and how we can maximize those yield to compete with the Chinese vendor.
The third strategy is to decentralize sourcing in term of offshoring from different places because under the PLI scheme, some policies put anti-dumping duty on the import of a few raw materials. In that case, we find our sourcing partners across the globe so that we don’t face any supply disruptions. To give you an example, one of our chemical suppliers, BASF, has 3-4 manufacturing sites globally. We have to qualify all those four sites so that if some geopolitical issues arise in the future, we can immediately switch to other sites which can supply us the material without any hassle. These are some of the strategies which we majorly follow apart from cost and quality.
How do you envisage the future of supply chain planning?
Gaurav Arora: Given the volatile environment, the time is right for pharma companies to reimagine their supply chain strategies. Building resiliency in the supply base requires a comprehensive approach that encompasses three key elements:
Resilience and Act: Improved resiliency starts with robust identifying competences that enable pharma companies to proactively sense possible risks and proactively act. This requires an amplified range and depth of data and analysis to monitor and evaluate a inclusive set of risk indicators. Although most companies track financial and operational risks, leaders are increasing their scope to screen possible threats in cybersecurity, ESG, and geopolitical risk that could disturb the supply chain. Upstream supply chain visibility for tier 2+ suppliers is also vital since risks can resound crossways the value chain. Finally, once a company notices vulnerabilities or probable disruptions, it must understand how the disruptions will impact the business. That way supply chain managers can take suitable action.
Allay: Pharma leaders are moving outside outdated business-continuity planning controls such as building inventory, alternative sourcing, and moving production in-house. Instead, they are looking for newer ‘out-of-the-box’ methods that enhance dexterity and strengthen the resiliency of the supply chain. Some examples include the following:
Qualification quickening, which is valuating requirements to decrease qualification time for new suppliers or materials.
Regulatory attentiveness, which results in smart, flexible filings to minimize authority involvement and enable adaptability during times of disturbance.
Supplier partnership and development, which refers to participating in supplier relationships to improve perceptibility and planning (such as sharing forecasts) and build aptitudes.
Incentive: Challenges curtailing from the pharmaceutical supply chain resound across the whole industry. But pharmaceutical companies are not alone in facing these challenges. They should look for opportunities outside their individual organizations to collectively boost resiliency. For instance, industry partnerships with peer companies current exclusive opportunities to share best practices through shared forums. These partnerships can also help jointly affect the supply chain and even create the opportunity to share or exchange supplies. Industry groups can also work with governments to figure policies. From regulatory filing requirements to funds to manufacturing capacity, government collaboration can lead to large-scale changes that transform pharmaceutical supply chains.
Srinath Reddy: The future of supply chain planning will focus on agility, integration, and sustainability. The below trends will make supply chain planning a strategic driver of growth and resilience.
Hyper-Integration: Real-time data sharing across ecosystems.
AI and Analytics: Accurate forecasting and proactive scenario planning.
Digital Twins: Simulating and optimizing supply chain strategies.
Sustainability: Prioritizing resource efficiency and carbon reduction.
Resilience: Adapting quickly to disruptions with real-time insights.
Empowered Teams: Using AI-driven tools for strategic decision-making.
In 2025, supply chain planning is expected to continue evolving with advancements in technology, shifts in consumer demand, and increased emphasis on sustainability and resilience. Here are some key trends likely to shape supply chain planning by 2025:
AI and Machine Learning Integration: AI will enhance forecasting accuracy by analyzing large volumes of data, enabling businesses to predict demand fluctuations and potential disruptions. Machine learning will drive smarter decision-making in areas such as inventory management, route optimization, and demand sensing, reducing human intervention and errors. AI-powered systems will handle more decision-making autonomously, optimizing supply chain operations in real-time.
Collaborative Planning and Integration: Companies will increasingly partner with suppliers, logistics providers, and customers, leveraging shared data and joint planning tools to improve efficiency and reduce lead times. Cloud-based platforms and ERP systems will become more integrated, allowing seamless communication between various stakeholders and facilitating better coordination. Companies from different industries may collaborate on logistics and distribution networks, sharing transportation and warehousing resources to reduce costs and improve efficiency.
Demand-Driven and Agile Planning: Supply chains will become more agile, allowing companies to quickly adapt to changing consumer demands, market conditions, and disruptions. Rather than relying on traditional push models, supply chains will shift toward demand-driven models that respond to actual customer needs and preferences in real-time.
Cloud and Edge Computing: Cloud platforms will allow for more scalable and flexible supply chain planning, enabling real-time updates, collaboration, and quicker responses to changes. Edge technology will allow data to be processed locally (closer to where it’s generated), improving speed and reducing latency, particularly for real-time supply chain monitoring.
Personalized Customer Experience: Companies will increasingly use supply chain data to offer hyper-personalized products and services, responding to individual customer preferences and demands in real-time. Advanced 3D printing and additive manufacturing will allow for the production of custom goods on-demand, reducing inventory costs and enabling more personalized offerings.
These trends highlight how supply chain planning is becoming more data-driven, sustainable, agile, and technologically advanced. In 2025, businesses that effectively leverage these trends will be better positioned to respond to rapidly changing market conditions, manage risks, and deliver greater value to customers.
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