One side effect of public scrutiny of rising drug prices has been greater visibility into the uniquely complex pharmaceutical supply chain. Previously little known distributors and middlemen now regularly receive attention, highlighting how the line between drugmaker and patient is rarely straight.
Volatility is nothing new to the energy sector. Around the world, oil producers have kept their wells pumping, hoping that rivals will crack first under sustained price pressure. But costs are still under intense scrutiny. Behind the scenes, energy companies have been working hard to slash costs and shore up profitability. They’re exploring ways logistics and supply chain activities can add value to their operations.
Industry trends including growing international competition, industry consolidation, and heightened customer expectations continue to put pressure on chemical manufacturers to improve their efficiency and effectiveness, particularly in the end-to-end supply chain. As these trends strain industry revenues and margins, supply chain excellence can make a powerful difference in chemical companies’ performance.
Supply chain leaders at industrial packaging companies navigate a difficult marketplace. Sitting two or three layers back in the supply chain, they struggle with increasing demand variability in a volatile world. They are under severe pressure from their customers, who are asking them to cut costs while improving customer service.Their lives would be easier if their downstream customers could improve demand-signal accuracy, but this has not been the reality.
Dynamic consumer behavior pressures enterprises to make their products attractive and relevant. They must keep manufacturing costs low as products have short life cycles and companies constantly update product features, switch suppliers, procure rare supplies, and deliver to new markets. Companies must create and maintain fast and agile supply chains.
Shortened product life cycles, increased competition, and heightened expectations of customers have forced many leading edge companies to move from physical logistic management towards more advanced supply chain management. Therefore, in many cases, the only possible way to further reduce costs and lead times is with effective supply chain management.
Product lifecycles in the tech sector have shrunk to months. Consumers are hyper-tuned to expect the next new thing. With every new product, the value of incumbent competitor products’ drops like a stone. This pattern is further complicated by the so-called “big bang disruptor” paradigm, whereby a revolutionary new product enters the market and sales explode because these are better and cheaper.
Better due diligence on third-party relationships improves transparency within the supply chain. Corporations, conducting this due diligence efficiently and effectively is a challenge; multi-national corporations have tens of thousands of third parties and vendors. Just conducting a simple internet search on each of these vendors would take thousands of working hours, and even then might not be fully compliant with anti-bribery and corruption legislation.
It’s time to invest our brainpower into an ecosystem that builds in quality, civility, transparency, privacy and control from the very start. A new media supply chain that levels the playing field and operates in a way that is clean, efficient, accountable and properly moderated for everyone involved. A new media supply chain that is both a force for growth and a force for good. Good for consumers, our brands, our industry and society.
The cost cutting required to address falling revenues has come as a shock to an industry that over the years had grown fat and happy on high prices. Collaboration is a particularly effective way to lower costs and simplify contractor management. Combining equipment, software and engineering, or other combinations of service offerings can unlock significant value for customers.