Chandan P . Shirbayye , VP & head of supply chain at Aragen , reviews the key themes and issues of the new emerging supply-side model and how we can mitigate the risks
Navigating the future : Building a de-risked supply chain
Chandan P . Shirbayye , VP & head of supply chain at Aragen , reviews the key themes and issues of the new emerging supply-side model and how we can mitigate the risks
As the global pharmaceutical supply chain landscape continues to evolve , the potential enactment of the Biosecure Act has raised significant concerns , particularly in the pharmaceutical and speciality chemicals sectors . While the Act has not been framed within this context specifically , it will reshape the pharma supply chain by limiting outsourcing to select China-based CDMOs .
Understandably , both Big Pharma and biotechs are looking to reassess their strategies due to growing uncertainties around relying on China . A knock-on effect is that businesses are also pursuing alternatives to reduce dependency on China for raw materials and intermediates . We see this directly with our clients who are demanding stricter supply chain controls , with some clients even requesting fully China-independent solutions .
This trend , which started post- COVID and has gained momentum since the Biosecure Act , presents an opportunity for Indian CDMOs to grow their market share by addressing the need for secure , diversified supply chains . India is perhaps one of the few countries in the world where a CDMO could look to build and source ingredients and starting materials locally , without any need to be reliant on China-based sources to fill-in gaps .
Diversifying supply
Remove the current narrative around Biosecure – which can cloud thinking – and this trend has long been rumbling along since COVID . Companies had become overly dependent on Chinese supply chains for most of their requirements .
For this reason , they started focusing on enhancing supply chain resilience , gaining more control , and achieving sustainability targets . By sourcing locally , they are not only improving turnaround times and inventory management , but also contributing to reduced carbon emissions , a key component of many companies ' sustainability strategies .
There are several ways we can mitigate the risks of the new emerging supply-side model . For example , a major component of de-risking involves addressing single-source dependencies and geographic concentration . Even when multiple suppliers exist , they can pose risks if they are concentrated in China . To mitigate this , companies are taking steps to identify alternatives , both locally and globally .
In cases where alternatives outside China are unavailable , companies are turning to backward integration , either internally or through partnerships .
54 SPECIALITY CHEMICALS MAGAZINE ESTABLISHED 1981