As COVID-19 tests healthcare systems across the globe, there is no doubt that the pandemic will revolutionise the pharmaceutical industry. One of the challenges is inventory management. During this period, many items such as surgical masks, sanitisers, thermometers, disinfectants and essential medicines are flying of the shelves. Consequently, phramacies can not replenish fast enough to keep up with spiraling demand.
In the world of pharmaceuticals, the impact of stock outs is much greater compared to other industries. Revenues and profits are definitely affected. However, for pharmaceuticals, inventory issues endanger lives. The COVID-19 pandemic forced both businesses and governments to open their eyes to the importance of supply chain strategies and inventory management processes.
As How Ti Hwei, president of the Singapore Association of Pharmaceutical Industries1 highlights: “Companies and governments around the world are building large inventories of active pharmaceutical ingredients (APIs) and drugs to ensure supplies of medicine remain uninterrupted.”
Yet, building large inventories to achieve and maintain high service levels is one thing. However, building high levels of inventories as a consequence of a lack of control or out of fear of stock outs is a different situation entirely.