Lead
Before the pandemic, changes in the pharmaceutical industry had already begun. Especially in the context of deepening policies such as zero price difference for drugs, procurement with quantity, and medical insurance negotiations, pharmaceutical companies must change their traditional business models. Previously, pharmaceutical companies mainly based on generic drugs, with the recommendation of the national "Drug Consistency" policy, more encouragement of the development of innovative drugs and biological drugs, and the future will be more through the collaborative cooperation with upstream and downstream enterprises in the supply chain, to meet the needs of end customers and provide value-added innovative products and services, and ultimately promote the development of enterprises.
From the current point of view, one of the main paths supporting the transformation of the pharmaceutical industry is digitalization. According to the survey results of iResearch Consulting, a third-party research institution, 60% of the respondents believe that the level of informatization is crucial to the development of pharmaceutical enterprises, such as the optimization and upgrading of industrial structure through informatization and digital construction.
In terms of future development direction, supply chain management is bound to become the key focus of digitalization in the pharmaceutical industry; as far as the current situation of the industry is concerned, the supply chain of pharmaceutical companies also urgently needs digital empowerment. Weak supply chain management capabilities have always been a pain point in the pharmaceutical industry, and the structural complexity and circulation costs of the pharmaceutical supply chain are much higher than those of other industry supply chains. Therefore, the professional demand of pharmaceutical enterprises for supply chain management has been increasing in recent years, but due to various reasons, the cooperation stability of upstream and downstream node enterprises has been lacking, and it is difficult to form an efficient and stable management model. Obviously, the digitization of the supply chain is not only based on the current to solve the pain points, but also a new driving force for the construction and development of the future.
ZhenYun Technology has served dozens of pharmaceutical companies in recent years, and practice has proved that procurement digitalization is the best entry point for the digitalization of the entire supply chain. The pharmaceutical industry can be divided into four categories: pharmaceutical companies, device companies, medical institutions (such as hospitals), pharmaceutical retail enterprises, etc. As the focus, this article will take pharmaceutical companies as an example to elaborate and analyze the procurement characteristics, pain points, solutions and best practice cases of the pharmaceutical industry, providing some references for pharmaceutical companies that are undergoing and planning digital transformation.
01
Procurement characteristics of the pharmaceutical industry
The main categories of procurement in the pharmaceutical industry include raw materials, packaging materials, MRO, equipment and machinery, etc., of which raw materials and packaging materials have a large demand, many categories, large procurement scale, and easy price fluctuations. In terms of the quality of the purchased materials, the requirements are extremely stringent. At the same time, with the national policy to encourage the research and development of innovative drugs in recent years, the investment in the pharmaceutical industry has been increasing, but innovative drugs from the laboratory to the market, need to go through a long process, the middle needs to constantly adjust the procurement needs and plans, build a new supplier system, for the supply chain procurement management to bring greater challenges.
The policy superposition of the epidemic is accelerating the transformation and upgrading of the pharmaceutical industry, and how to reconstruct the entire supply chain procurement system including supplier management, sourcing management, procurement coordination, and financial coordination is a problem that every pharmaceutical company must face.
Based on years of practical experience, Zhenyun Technology summarized the three major characteristics of procurement in the pharmaceutical industry:
1. Strict qualification certification and management of suppliers
GMP (Good Manufacturing Practice) and GSP (Good Manufacturing Practice) certification are the two biggest thresholds in the pharmaceutical industry. At the same time, CSV (Computer Information System Verification Document) is also an indispensable part of the pharmaceutical industry. GMP in the pharmaceutical industry is the basic guideline for drug production and quality management, which is applicable to the whole process of pharmaceutical preparation production and the key processes affecting the quality of finished products in the production of APIs. This is similar to Apple's requirements for suppliers, not only at the simple product level, but also at all levels of its production, management and other operations. Therefore, not only does the other party need to provide GMP-related qualifications when suppliers are admitted, but once cooperation is established, it is also necessary to grasp the changes in supplier-related qualifications in real time. GSP is another major qualification requirement for suppliers by pharmaceutical companies, and at the same time, the management code also requires pharmaceutical companies to establish their own traceability systems and quality management systems, including procurement.
Therefore, for pharmaceutical companies, it is important to build a standardized supplier access mechanism, establish a sound digital file for suppliers, and achieve real-time early warning, and build a comprehensive and accurate traceability system.
2. The research and development of innovative drugs requires long-term procurement management
The research and development and listing of an innovative drug needs to go through relevant tests, approvals, clinical trials, etc., and the cycle is long, and the corresponding procurement project management is also a long cycle. In the whole process, it is necessary to continuously develop new suppliers, and each time a new supplier is developed, it is necessary to provide information through sourcing →, provide samples → collect relevant information / submit change applications→ quality audit (three certificates of information, etc.) → sample inspection → qualified → pilot → pilot → supplier audit, filing → relevant departments initiate change verification coordination meeting→ enter ERP → verification approval → change summary will → the list of qualified suppliers → formal production. In the traditional mode, a set of processes is time-consuming, laborious, and prone to errors.
Therefore, the establishment of an efficient procurement management system based on digitalization will help pharmaceutical companies to minimize costs and increase efficiency in the process of new product development.
3. Raw material procurement is greatly affected by seasonality and market fluctuations
In the pharmaceutical industry, there are many quality indicators for the procurement of proprietary chinese medicine raw materials and it is difficult to accurately quantify, the superimposed supply source is scattered, the raw material supply has obvious seasonality, and the price is greatly affected by domestic and foreign markets, which requires enterprises to calculate the most reasonable ingredients and the most appropriate procurement time for the procurement of raw materials. At the same time, enterprises need to flexibly set the procurement mode and sourcing method according to the procurement category, meet the needs of multiple departments and types of procurement, and also support a variety of procurement modes such as unified negotiation, unified negotiation and sub-signing.
Therefore, on the one hand, the rich data assets formed after digitization can further build analytical models based on new technologies such as big data and AI to provide accurate data support for purchasing decisions; on the other hand, digital support is used to support multiple pricing and price adjustment processes.
02
Procurement pain points and solutions for the pharmaceutical industry
The procurement pain points of the pharmaceutical industry mainly focus on four aspects: supplier directory/supply list, sample inspection/delivery quality inspection, budget management, and data traceability difficulties. In terms of supplier directory/available list, there is a lack of a unified supplier introduction portal, supplier qualification is mainly based on offline management, the dimension distinction between materials and manufacturers is not clear, GSP and GMP certification problems; sample inspection/delivery quality inspection, in the R&D project - sample research - sample demand - sample application - sample delivery - sample acceptance - sample testing (clinical) - feedback - rectification and other the lack of an efficient digital system support in the whole process, low cost efficiency, but also easy to make mistakes; therefore, There is a need for sufficient spare parts protection, and the procurement of spare parts is a very important point in the pharmaceutical industry. The main demand in budget management lies in cost control; in terms of group procurement, the group has not established a unified and standardized master data, the lack of coordination between the dual-line management of the group and the pharmaceutical entity, and the single procurement method of non-raw materials.
When serving customers in the pharmaceutical industry, ZhenYun Technology has summarized a set of targeted solutions that meet business needs and can be quickly copied.
Problem 1: The supplier introduction process is complex, and the hierarchical management is not refined enough
Under the traditional model, pharmaceutical companies rely on the personal experience and resources of buyers, take a variety of forms as the carrier, after layers of approval, repeated communication and adjustment, and finally introduce potential suppliers, and there is a set of systems between the headquarters and each branch, lacking a unified standard. As a result, the quality of the introduced suppliers is uneven, leaving problems for subsequent supplier management.
Solution 1: Build a unified portal, and manage the whole process of selection, use, education and retention in the whole process
In accordance with the principle of closed-loop management of the whole process of supplier selection, use, education and retention, Zhenyun Technology promotes the detailed management of supplier classification and grading by enterprises. First of all, at the group level, through the establishment of a unified supplier portal, the unified management of supplier access information is realized, and the supplier is centrally introduced by invitation registration, public registration, etc., which greatly reduces the loss of information fragmentation by means of unified portal entry of supplier master data. After the supplier is successfully registered in the group, the supplier will be admitted to the materials supplied by the supplier by each factory (pharmaceutical entity), and after a series of processes such as sample inspection, small test, pilot test, supplier audit and filing, the supplier will complete the access to the factory area and obtain the qualification to participate in the follow-up collaborative business. Based on standardized condition settings, suppliers can be divided into registered suppliers, potential suppliers and qualified suppliers, corresponding management, and can be adjusted in real time according to the needs of enterprises.
Once the supply and demand sides have business transactions, including application, approval, ordering, delivery, quality inspection, reconciliation, settlement, etc., the entire process, between various departments of the enterprise and between enterprises and suppliers, can be based on the whole process of online digital mode for efficient collaboration, and each purchase information will also be precipitated in the form of data, so that the follow-up assessment can be based on evidence, so as to achieve transparent management of the whole process of procurement.
Problem 2: It is difficult to achieve dynamic comprehensive monitoring and management of qualifications
In order to ensure the quality and safety of purchased materials, the pharmaceutical industry is especially required by GMP, GSP and other specifications; strict supplier management processes and files must be established. However, in the traditional model, the supplier's qualification management basically relies on manual offline management, which is not only efficient and low-cost, but also cannot achieve real-time early warning of qualification change information, which brings huge risks to enterprise operations. According to the requirements of national policy management, when the supplier's qualification license expires, the supplier needs to be frozen for bookkeeping and strictly control its downstream documents, including the continued circulation of orders and agreements.
Solution 2: Establish a qualification control platform to achieve risk early warning
Zhenyun Technology's digital procurement management system will establish a unified qualification control platform for enterprises, forming a full-cycle closed-loop management of qualification review, qualification classification requirements, qualification files, qualification reminders, and qualification authority control. For example, when the supplier's qualification expires, the online can automatically warn and notify the enterprise, which greatly reduces the time of offline document collation and screening, saving more than 50% of the time. And after the qualification expires, the system will automatically restrict supplier transactions, and the supplier status will be changed to restricted supplier, thereby ensuring qualification compliance.
At the same time as qualification control, Zhenyun Technology's solution can also improve the quality level of suppliers through the application of strategies such as technical release of quality information, 8D rectification collaboration, claim coordination, and performance execution.
Problem 3: The number of suppliers is large and there is a lack of evaluation systems
The number of suppliers of pharmaceutical enterprises is huge, but for a long time, the entire evaluation system has been carried out in the form of offline manual assessment, on the one hand, the cost is high and the efficiency is low; on the other hand, the subjectivity is strong, and it is difficult to truly reflect the overall situation of the supplier. As pharmaceutical companies have higher and higher requirements for supplier quality, it is urgent to improve the supplier assessment system and process, such as hoping to achieve automatic ranking of assessment results, eliminating rectification suppliers, and output rectification notices.
Solution 3: Improve the evaluation system and carry out refined management of supplier performance
ZhenYun Technology establishes a unified and standardized supplier assessment system for enterprises, on the basis of the basic information of suppliers, adds multi-dimensional data such as supplier supply capacity, performance ability, product quality, etc., and can configure different templates to conduct comprehensive assessment of suppliers in a way that combines manual scoring and automatic evaluation of the system. In addition, support monthly/quarterly/annual multiple flexible supplier evaluation schedules, supplier scores can be automatically ranked, and output evaluation forms. So that the assessment results are used as the basis for supplier classification and grading.
Problem 4: It is difficult to trace procurement data and form data assets
Under the traditional procurement mode, there are a large number of digital breakpoints in the procurement process, most of the links are coordinated by manual operation, paper, mail, etc., and the form format is not standardized enough, so it is difficult to form a data trace and solidification of the whole process, and it is easy to make mistakes and omissions. Under the strict requirements of GMP and GSP, enterprises need to establish a comprehensive and accurate traceability and visualization system to support their procurement business.
Solution 4: Digital upgrade of the whole process and whole life cycle to achieve traceability and visualization.
Zhenyun Technology's digital procurement system can help pharmaceutical enterprises to realize the digital upgrading of the whole process of supplier management, sourcing management, contract management, order management, delivery management, financial collaboration, etc., open up the digital breakpoint of procurement, and connect with other systems within the enterprise, break the "data island", and realize information sharing and data solidification. On the one hand, to adapt to regulatory requirements, improve procurement transparency, and trace the relevant information throughout the process; on the other hand, through the full mining and analysis of data, it is possible to form a variety of visual tables such as transaction price trends, delivery timeliness, cost reduction rates, performance analysis, etc., to provide accurate data support for enterprise business decisions.
03
Zhenyun Technology Pharmaceutical Industry Best Practices
Build a refined management system for suppliers
Representative enterprise: a leading enterprise in the pharmaceutical industry in China
After years of development, the company has become a leader in the pharmaceutical industry, especially in terms of innovation, in recent years, a number of new drugs have been successfully approved for listing, is a well-known domestic supplier of anti-tumor drugs, surgical drugs and other products. With the continuous expansion of market scale and the increase of investment in new drug research and development, the company needs a more efficient and stable procurement system to further enhance its market competitiveness while reducing costs and increasing efficiency.
In cooperation with Zhenyun Technology, the two parties have built a new digital procurement management system based on the construction of a unified digital procurement platform, which runs through the whole procurement process of supplier management, smart sourcing, procurement collaboration, and financial collaboration with digitalization and intelligence. Especially in terms of supplier management, a full-life cycle management system has been formed. Supplier registration, administrator approval, repetitive verification, qualification (such as three certificates) information, supply categories, etc. all achieve online collaboration, create a unified supplier portal, and form a group-level supplier resource pool. When the subordinate enterprises need to purchase, they can conduct invitations and qualification surveys through the resource pool, and enter the life cycle management of their suppliers, including registration, sample inspection, sample audit, classification, change, assessment, promotion and demotion, etc. In particular, an early warning mechanism for qualification risks and a sound performance appraisal system have been established.
Configure multiple item pricing methods
Representative enterprise: A top 10 enterprise in the Chinese medicine industry
The enterprise specializes in the research and development, production and sales of modern Chinese medicine, and is one of the top 100 pharmaceutical companies in The national pharmaceutical industry, the top 10 in the Chinese medicine industry, and the largest pharmaceutical listed company in the main board of Hong Kong. The products are mainly aimed at the three high-growth markets of middle-aged and elderly drugs, children's drugs and antiviral drugs. In recent years, with the dual help of national policies and markets, Chinese medicine enterprises have achieved rapid development, but at the same time, due to the large price changes in the Chinese herbal medicine market, the procurement of the enterprise is also facing new challenges.
The company chose to cooperate with Zhenyun Technology to complete the digital management of the whole process of procurement initiated by supplier management, procurement demand management, quotation inquiry, bidding, e-mall, contract management, order management, delivery collaboration, quality collaboration, financial collaboration, and payment initiation. Especially in terms of price management, a variety of material price adjustment methods have been realized in parallel. The demand for medicinal materials and production excipients of the enterprise is very large, but the price is greatly affected by the market and is prone to fluctuations, and the inquirer needs to go through different pricing processes according to the material price information obtained by the source. After the new system is launched, different price adjustment strategies can be based on different situations, such as if the price fluctuation is small, the verification officer will directly confirm the sourcing results; the OA with large price fluctuations will be approved by the leader; and the strategic price reference sourcing results will be signed with the supplier.
Strengthen procurement coordination and further reduce costs and increase efficiency
Representative enterprise: An A+H-share listed pharmaceutical production enterprise
The enterprise integrates pharmaceutical research and development, production and sales as one of the integrated pharmaceutical group companies, in the field of APIs, chemical drugs, traditional Chinese medicines, biological drugs, in vitro diagnostic reagents and other fields continue to make breakthroughs, products are distributed in digestion, cardiovascular and cerebrovascular, reproductive endocrinology, psychiatric / nervous and other fields, the formation of a nationwide radiation of prescription drug marketing network, is rapidly promoting the construction of a global sales platform.
Since the cooperation with Zhenyun Technology, the two sides have comprehensively sorted out their procurement system and built a new digital procurement system based on the characteristics of enterprise business. Especially in terms of procurement coordination, including orders, delivery, etc., the company previously notified the supplier of the purchase order by mail and other means, the supplier email reply confirmed, the labor cost was high; Excel manual sorting, cumbersome operation, the supplier printed their own delivery note format for delivery, there was no unified format, the document voucher was not standardized, which was not conducive to collation and subsequent reconciliation. As a result, procurement efficiency is low, cost is high, the cycle is long, and the synergy is weak. After the new system is launched, in terms of procurement collaboration, the order can be released to the supplier online through the digital procurement management platform, and the supplier can confirm the order and create a delivery note in the system; it can conveniently query the quantity, amount, receipt quantity, invoice quantity and other information of the order; the supplier delivers the delivery in a unified format and standardizes the unification.