Two Steps to Improving Quality of Supply Chains in Pharmaceutical Manufacturing

As pharmaceutical companies continue to grow, they are relying more heavily on contract manufacturers. According to “Better by Design,” Doug Bartholomew’s article in Pharmaceutical Manufacturing, pharmaceutical companies have been moving 30% to 50% of their manufacturing to contract manufacturers over the last few years. Outsourcing to a CMO reduces costs and increases manufacturing capacity.  

The problem, however, is that quality and safety are at risk because there isn’t a standard method of communication and CMO management. Failing to properly manage a supplier, in fact, is grounds for an FDA warning. Pharmaceutical companies are struggling to keep up, though, because they are not receiving the same level of data on outsourced product as they do on those they produce themselves. This is the result of inconsistent information sharing between companies and their many suppliers. 


Technology environments can vary as widely as the number of suppliers a company is working with. While most companies have enterprise resource planning (ERP) systems, they do not necessarily communicate with the ERP systems of their suppliers.  This causes a broken or weak link between the CMO and the company. As a result, vital information about the product is either late or not communicated at all.  

In some cases, however, an existing ERP system may be conducive to tracking product and managing suppliers. Bartholomew spoke with John Danese, senior director of Life Science Industry at Oracle, a major ERP software provide. The article paraphrases Danese, “pharmaceutical companies are using its ERP and product lifecycle management (PLM) systems to manage and monitor their suppliers. He recounted a recent incident in which a contact lens manufacturer discovered through the Oracle PLM that a series of complaints had been logged over lens reservoirs that were low or dried out altogether.” Danese is quoted in the article, “The case was logged in the PLM as a quality event. The company put that supplier on hold and assigned production to another vendor until the problem was solved.  The company managed it all through the PLM system.” 

While a case can be made for some specific ERP systems, they may not be right for every company. Systems are available off-the-shelf and custom-built. Bartholomew interviewed someone who took a more modern, advanced approach to the problem: the cloud. He spoke with Merck Manufacturing IT executive director Steve Hydzik. Merck’s goals were “driving down cost, shortening time to market and meeting ever-increasing customer expectations” as well as aspirations “to have a world-class supply chain.” Based on this company’s experience, here are two points to consider to improving the supply chain at a pharmaceutical company.

  • Use the cloud: Merck used Tracelink, which is on Amazon Web Service’s public cloud. It “offers a supply chain collaboration platform enabling manufacturers to share information with business partners on supply, production and distribution” (Bartholomew.) The most significant aspect of the cloud is that data is revealed in real time. Communication doesn’t rely on email or fax – methods that are quickly becoming archaic in this age – it happens instantly. According to Batholomew’s article, the cloud provides speed and agility as well as a better return on investment. Additionally, using the cloud is a win-win for the company and supplier. Experts do advise that when initiating a new system like the cloud, choose a few suppliers first and gradually integrate it into all supplier relationships.
  • Perform regular site visits: In many cases, more than one product is being manufactured onsite. There are always risks of cross-contamination, improper equipment use, and other quality-control issues. Companies should be invested in monitoring whether workers are properly trained. With some companies, the risks will be higher. Site visits can be scheduled as often as necessary depending on the specific supplier and its history of problems.

Companies need to remember that both of these points strengthen FDA compliance.  In May, “The FDA recommended that pharmaceutical companies and their contractors implement written Quality Agreements to delineate their responsibilities to ensure the quality, safety and effectiveness of the drugs they produce” (Bartholomew.) No matter who manufactures a product, responsibility for it always falls on the shoulders of the initial company, not the CMO. The FDA holds the pharmaceutical companies accountable for their products regardless of who manufacturers them.  

Merck’s path may not be right for everyone, but it has yielded saving on costs, ensured quality, time savings, and a move towards a world-class supply chain. Additionally, the cloud better ensures Merck will remain FDA compliant. Sometimes the newest and best technology is the best solution.  

Gerbig Engineering Company is diligent in promoting the highest quality-control methods in the pharmaceutical industry. Our company is equally committed to quality and safety in our products. We not only build clean rooms, but also provide validation of facility and equipment qualification. For more information, call 888-628-0056, email, or fill out the information form on this website under the “Contact Us” tab.

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