Smart Manufacturing and Healthcare
20 Oct 2023
Operations transformation will help SA’s pharmaceutical manufacturers remain competitive amid unprecedented supply chain challenges
Life has largely reverted to a state of normalcy that existed prior to the Coronavirus pandemic. Whilst COVID-19 severely impacted global economies and supply chains, healthcare systems, business and the lives of billions of people, it influenced us all to not only look at things differently, but to do them differently. This is a lesson that Africa’s, and in particular, South Africa’s pharmaceutical manufacturers need to learn from.
South Africa currently has the largest pharmaceutical market in sub-Saharan Africa. Despite this, manufacturers are facing unprecedented challenges within their supply chains from both a core operational perspective and increasing regulatory requirements.
“The pressure to perform optimally is important not only for the local market to remain competitive but also to meet the varying demands of patients. One of the ways pharmaceutical companies can achieve this is by addressing key challenges in data visibility, the control and prediction of demand, and balancing compliance.”
Vinesh Maharaj, says decisive actions need to be taken when operating in a turbulent market.
“Reimagining the possibilities when it comes to manufacturing excellence, connecting the supply chain and taking advantage of opportunities in environmental, social, and governance (ESG) are some of the actions that can be taken.”
In PwC’s newly released report, Challenges and opportunities for the South African pharma manufacturers, we take a closer look at how the gap can be bridged between the South African pharmaceutical manufacturing sector’s current challenges, and how operational excellence in manufacturing can serve as a valued response.
Dreyer says the South African pharmaceutical sector showed resilience and opportunity during the pandemic. Looking ahead, he says that gaining a solid understanding of the factors that govern the local manufacturing value-chain and its associated challenges is pivotal for manufacturers.
“In the South African pharmaceutical manufacturing context, we have observed that generic medications are produced locally more so than original branded pharmaceuticals. The local pharmaceutical manufacturing context faces noticeable challenges when it comes to capacity, cost and ensuring robust regulation, access and quality. While 60-70% of pharmaceutical products are produced locally, almost 98% of active pharmaceutical ingredients (API’s) are imported, and this results in capacity challenges,”
Dr Ureshnie Govender, says the pandemic shed light on broader local and international challenges that local manufacturers were to face.
“Export bans on pharmaceutical products by Asian producers resulted in medicine shortages across the African continent which emphasised the need for increased investment in local manufacturing. Global supply chain disruptions brought additional challenges with logistics disruptions, workforce and labour shortages, as well as production delays and increased consumer lead times because of the limited supply of important raw materials.”
In our report, we outline what we have identified as the key challenges that exist across the value chain. These include cold chain manufacturing; the importance of keeping a slow-moving and obsolete inventory; starting to prioritise matters of sustainability; and serialisation which speaks to the end-to-end traceability of a product. Our report also details a three-part value chain approach to addressing key issues across the supply chain. These include:
- Connecting and maintaining a robust supply chain
- Creating a higher degree of control over shop floor operations
- Developing strong base ESG principles and controls
“We understand that not all the aforementioned challenges are directly within manufacturers control, however, applying an operational excellence lens across the value chain can provide manufacturers with some options to optimise on these gaps and create a level of differentiation in the market.”
He says these opportunities present themselves in three distinct categories that should be prioritised to ensure the industry remains competitive in a market that is highly regulated and congested.
In order for local manufacturing organisations to remain competitive they must take the opportunity to digitise and transform the supply chain and shop floor environment.
“An organisation's commitment towards operational excellence will be far reaching as it will serve as a catalyst for enabling localisation in specific markets – which will result in products and services having a local flavour, and speaking to the needs of specific markets. Operational excellence will also translate into organisations realising their potential for continued growth. Pivotal to achieving this is comprehension of the variables that an organisation can control to allow it to drive decisions aimed at building operational resilience and drive efficiency.”
