Embracing sustainability in supply chain operations
This article is authored by Sharmishtha Niyogi, supply chain director, Merck Life Science, India.
In an era where a global pharma and health care industry intersects with pressing environmental challenges, sustainability has become an absolute priority for companies. As per industry reports a staggering over 70% of health care emissions are generated in the supply chain, including the manufacture and disposal of medical devices and pharmaceuticals. This harsh reality demands a paradigm shift, one that prioritises eco-friendliness, from raw material extraction to the product landing on the shelf.
Companies, particularly in the pharmaceutical and health care sectors are now tasked with rethinking their operations to meet these expectations, integrating sustainability into every step of the process. As the complexities of global supply chains continue to evolve, the challenge lies in balancing economic efficiency with environmental stewardship.
In this article, we will dive into the dynamics of building sustainable supply chains, exploring the current challenges, innovative solutions, and future trends that are shaping the industry.
The intricacies of supply chains over time have become more critical than ever, especially in the health care sector, where both exports and imports are on the rise. As international demand for medical products surges, the global supply chain further becomes stretched, revealing vulnerabilities that could impact the timely delivery of essential health care supplies.
Traditionally, the pharma supply chains operated in a complex manner that required substantial energy, water, and manpower, making it costly and time-consuming. Along with higher costs and the heavy environmental impact left by pharma supply chains, it sparked the debate for building sustainable supply lines in the sector. This led to companies adopting several sustainability solutions like the circular strategy of waste reduction, end-to-end supply chain visibility, implementing eco-friendly sourcing by incorporating ethical policies, and effective governance strategies.
In a circular economy, materials are disassembled, channelled back to production, and reused as raw materials to create new, sellable products that significantly reduce waste. Adopting this approach in pharma and health care reduces reliance on pure raw materials and natural resources, enabling companies to meet sustainability objectives while maintaining profitability. Furthermore, leveraging advanced technologies also plays a pivotal role in mitigating these challenges, making supply chains more resilient and sustainable. Innovations such as real-time tracking, predictive analytics, and blockchain technology are not only enhancing transparency but also enabling more efficient resource management, thereby reducing waste and ensuring that vital health care products reach their destinations with minimal environmental impact.
The path toward sustainable supply chains is fraught with numerous challenges that must be addressed to ensure eco-friendly practices from source to shelf. One of the primary hurdles lies in the complexity of supply chain networks, which often span multiple countries and involve various stakeholders, making it difficult to enforce consistent environmental standards. Adding to the complexity is the resistance to shifting away from traditional practices, where companies often prioritise short-term cost savings over long-term sustainability objectives. As global regulations evolve and consumer awareness increases, businesses must navigate these challenges to meet growing expectations for corporate responsibility and environmentally conscious operations. To address these challenges, innovative solutions are emerging that redefine how supply chains operate, ensuring they align with sustainability goals. One such solution is the integration of technologies like blockchain and IoT, which provide transparency and traceability across the supply chain, enabling companies to monitor the environmental impact of every step, from sourcing to distribution. Companies are also leveraging Artificial Intelligence and machine learning to optimise logistics, reduce energy consumption, and predict demand more accurately, thereby minimising excess inventory and waste. These innovative approaches, coupled with a commitment to sustainable practices, are paving the way for eco-friendly supply chains that not only meet regulatory standards but also contribute to long-term environmental stewardship.
Achieving sustainability in supply chains marks a significant transformation in how pharma companies carry out procurement, manufacturing, and distribution. As awareness grows about the adverse environmental and social impacts of traditional supply chain practices, businesses are becoming increasingly committed to sustainability throughout their supply networks. Currently, the Indian pharmaceutical industry, which meets over 60% of global vaccine demand, represents more than 20% of the worldwide pharma supply chain, not only fulfilling domestic needs but also making a significant impact on the international level.
Effective policy work is pivotal in enhancing supply chain robustness, particularly in the pharmaceutical sector. By prioritising the development of better infrastructure—such as improved roads, advanced storage facilities, and streamlined investment processes—governments can significantly support the resilience and efficiency of supply chains. Furthermore, fostering global collaborations and encouraging cross-border partnerships are essential for creating a more interconnected and sustainable supply chain network. These strategic policy interventions not only support the seamless flow of goods but also ensure that sustainability remains at the forefront of supply chain practices in the pharmaceutical industry.
The journey towards a global sustainable supply chain is not a solitary journey but one that requires efforts from all levels. All stakeholders should collaborate to build industry-wide partnerships and initiatives that promote transparency and build collective responsibility that makes the pharma supply chains more sustainable. Companies should incorporate sustainability as a conscious choice within various processes like procurement, supplier collaboration etc. to not only mitigate their environmental impact but also enhance operational efficiency, build innovative solutions while keeping the environment safe.
This article is authored by Sharmishtha Niyogi, supply chain director, Merck Life Science, India.