Orchestrating a global pharmaceutical supply chain
It takes a lot to ensure that the right patients receive the right products at the right time, in an efficient and sustainable way – especially when the product is a life-saving medicine. Each step of Boehringer Ingelheim’s supply chain, from the production of active pharmaceutical ingredients to finished products, is carefully coordinated to serve patients’ needs.
To successfully produce and distribute the pharmaceutical products that patients need around the world, one must predict the future demand as accurately as possible. Demand forecasting at Boehringer Ingelheim’s Human Pharma business is based on data drawn from all regions and countries it serves. The supply chain team then works with experts from operations, marketing, sales, finance and other functions, to plan for future supply.
“We’re orchestrating a global manufacturing and distribution network. We define what we’re going to produce and distribute, what patients’ needs are, and how our flexible supply network can meet them,” says Jens Schader, Global Head of Supply Chain Management & Strategy for Human Pharma at Boehringer. “We anticipate various scenarios because, as you can imagine, the future is not all crystal clear. Supply chains must be more resilient because the world is getting more volatile and uncertain.”
“Supply chains must be more resilient because the world is getting more volatile and uncertain.”
Global Head of Supply Chain Management & Strategy for Human Pharma at Boehringer Ingelheim
“When supply forecasts fluctuate due to changing demands, pharma manufacturers don’t have the luxury of just spinning up a few new machines, flipping a few switches and producing more and more,” says Jiong Qu, Head of Global Supply Strategy for human pharma operations.
The need to refine supply chains never stops. To cater for ever growing demand, Boehringer is for example implementing measures to more than double the number of Jardiance® tablets it will manufacture and distribute by 2028. These efforts include: Reengineering factories to handle new processes; hiring and training new employees; freeing manufacturing inhouse capacity by asking external contract manufacturing partners to pitch in to handle other products; keeping regulators in the loop; and constantly, remapping and expanding our distribution network with regional and local partners.
Jardiance®, a cardio-renal-metabolic treatment and Boehringer's best-selling product, saw demand shoot through the roof in late 2022 as the product expanded from its initial Type 2 diabetes indication to include indications for kidney disease and heart failure. “Within three months, we found ourselves needing to boost our supply by 40%,” recalls Qu, a 24-year Boehringer Ingelheim operations veteran. “It exceeded our most optimistic expectations.”
From raw materials to final delivery
Once the company has assessed the demand for a given product, the supply chain must work to meet that demand through four key stages of activity:
Raw Material Procurement
In stage one, Boehringer procures raw materials and excipients from its carefully chosen suppliers. The company and its partners must ensure that the supply is safe, resilient and sustainable and meets compliance requirements. Manufacturing quality, ethical business practices, human rights in the workplace and health and safety standards are actively audited across the supply chain.
Manufacturing & Packaging
Stage two covers manufacturing and packaging. Here, the raw materials are formulated into active pharmaceutical ingredients and finished product. Boehringer Ingelheim’s drug substances fall within two main categories – chemical or biological entities. Many of which are produced in Europe, where established know-how, a highly trained workforce, rapid reaction times, reliable quality control and short transport distances to major markets enable high levels of oversight and supply security. For the manufacture of products, Boehringer Ingelheim relies on a strong global network consisting of both its own production sites and external contract manufacturing partners. This makes it possible to manage global supply in a flexible way responding to changes of market demand and local patient needs. To prepare products for distribution to the market, they are packed in their custom designed primary and secondary packaging, such as blister packs or vials and boxes; while other products may require further medical devices, such as medications delivered via autoinjectors.
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Inter-country Shipment
Stage three is shipment. Medications are packed in containers equipped with temperature loggers to help verify they are transported under optimal conditions. For worldwide shipping of its products, Boehringer gives preference to sea freight and uses less air freight than any other company in the industry. That is because ocean shipping offers better temperature control while generating less CO2.
“Sustainability is becoming more and more important,” says Schader. “We only use air freight for exceptional cases when we have to be adaptive or reactive. When flexibility is needed, the primary goal is to meet urgent patient needs,” he adds.
Last-mile Distribution
In stage four, Boehringer uses local distributing partners to deliver its products to wholesalers, hospitals, or pharmacies, that provide them to the patients. Every step of the journey up to this point has been tracked to guarantee the quality of the medications and to ensure their timely availability. If demand or supply fluctuates, Schader and his team make use of local safety stocks as a buffer.
In 2023, when global supply chains were stressed or even disrupted by regional conflicts, capacity shortages, and energy constraints, this created pressure on supply reliability. Buffers in all stages of the supply chain ensured that Boehringer Ingelheim could carry out scheduled product deliveries.
Designing a future-proof supply chain
Clear communication all along the supply chain is needed to reassure customers and distributors and avert the pack-rat psychology which afflicts other industries with less predictable supply chains. The supply team keeps a close eye on customer behaviour, monitoring for signs of double-ordering, to ensure that products are available and delivered when patients actually need them.
That’s why supply chain management remains a constant balancing act, reassuring different stakeholders in the distribution system that the company will manage to meet existing and forthcoming needs. “We have lots of levers at our disposal to assure supply,” Qu says.
This point can’t be overemphasized. In operating an efficient supply chain, Boehringer Ingelheim’s supply chain organization delivers the reassurance that Boehringer Ingelheim manages to provide product needed by our patients on time.
“Going forward, the vulnerability of global supply chains is one of the key challenges industries must face,” says Schader. In preparing for the future, Schader and his team know they must continue to adjust and optimize the ways Boehringer manages its global supply chain – particularly as the company’s product pipeline keeps evolving.
“We are at a pivotal point,” he adds. “To be able to bring this promising pipeline to our customers, we need the right network, processes and state-of-the-art systems in place. We need to strike the perfect balance between acting sustainably and making our supply chain resilient enough so that we can continue to meet the needs of all the patients who rely on our medicines.”
