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VMI Practices in the Pharmaceutical and Life Science Industry

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    VMI Practices in the Pharmaceutical and Life Science Industry Suppliers


    VMI Practices in the Pharmaceutical and Life Science Industry Supplier

    Find the right-fit vmi practices in the pharmaceutical and life science industry supplier for your specific business needs and filter by location, industry, category, revenue, certifications, and more on Beroe LiVE.Ai™.

    Sample Supplier
    Company
    DEUTSCHE POST AG
    Location
    Jackson, Mississipi
    Duns number
    3862211

    D&B SER Rating

    dnb logo

    Up to 3 months

    1 9
    1
    Low Risk High Risk

    The Supplier Evaluation Risk (SER) Rating is Dun & Bradstreet’s proprietary scoring system used to assess the probability that a business will seek relief from creditors or cease operations within the next 12 months. SER ratings range from 1 to 9, with 9 indicating the highest risk of failure. We’ve prepared an infographic to help business owners better understand what influences their SER Rating.

    Moody`s ESG Solution
    ESG Profile

    Company and Sector Performance
    58

    100
    Robust (1)
    ESG Perfomance (/100)
    Environment
    71
    Social
    52
    Governance
    61
    6 Domains Performance (/100)
    Business behaviour
    55
    Human rights
    56
    Community Environment
    44
    Corporate governance
    65
    Human resources
    52
    Security Scorecard
    93

    Threat indicators
    B
    87
    Network Security
    Detecting insecure network settings
    A
    100
    Hacker Chatter
    Monitoring hacker sites for chatter about your company
    A
    100
    DNS Health
    Detecting DNS insecure configuration and vulnerabilities
    C
    79
    Application Security
    Detecting common website application vulnerbilities
    A
    97
    Endpoint Security
    Detecting unprotected enpoints or entry points of user tools, such as desktops, laptops mobile devices, and virtual desktops
    A
    100
    Cubic Score
    Proprietary algorithms checking for implementation of common security best practices
    A
    99
    Patching Cadence
    Out of date company assets which may contain vulnerabilities of risk
    A
    100
    Social Engineering
    Measuring company awareness to a social engineering or phising attack
    A
    100
    IP Reputation
    Detecting suspecious activity, such as malware or spam, within your company network
    A
    100
    Information Leak
    Potentially confidential company information which may have been inadvertently leaked

    Industry Comparison
    deutschepost.de
    Industry average
    Adverse Media Appearances
    Environmental Issues
    2
    Workforce Health Safety Issues
    0
    Product Service Issues
    40
    Human Rights Issues
    0
    Production Supply Chain Issues
    12
    Environmental Non Compliance Flags
    54
    Corruption Issues
    0
    Regulatory Non Compliance Flags
    13
    Fraud Issues
    0
    Labor Health Safety Flags
    38
    Regulatory Issues
    13
    Workforce Disputes
    21
    Sanctions
    0
    esg energy transition
    80
    Discrimination Workforce Rights Issues
    17
    esg controversies critical severity
    No

    VMI Practices in the Pharmaceutical and Life Science Industry market report transcript


    Global Market Information on VMI Practices in the Pharmaceutical and Life Science Industry

    Industries which have higher adoption of VMI usually are manufacturing intensive industries, which have high cost of goods sold. Pharmaceutical industry has lower total cost of goods sold compared to other industry, which drives the pharmaceutical companies to focus more on their sales, R&D, and other core areas of expertise

    Benefits of  VMI

    • Increased operational efficiency–Pharmaceutical companies can focus more on their critical material sourcing, exceptions handling, research and development, and marketing activities rather than on managing inventory
    • Cost reduction–Inventory handling and management costs are reduced drastically. With increased efficiency in inventory turnover, their balance sheet looks positive and thus, greater confidence in the financial position
    • Lower risk associated–Risk associated with the raw materials is the ownership of the supplier

    Adoption Level of VMI

    • Adoption of VMI in the pharmaceutical industry is lower compared to other Industries, however, many pharmaceutical companies have adopted VMI to manage their non-critical raw materials, such as basic chemicals, packaging materials etc.,
    • VMI adoption changes for different categories based on their value, volume, replenishment time, criticality of the material, supplier availability and willingness, etc.
    • FMCG, automotive, and other industries, which follow VMI, have around 50–70 percent cost of the goods sold. Pharmaceutical companies have lesser than 30 percent cost of the goods sold, hence, they have lesser value of goods to handle compared to other industries
    • GSK, Sanofi, Bayer, Novartis, etc., have implemented VMI to manage some of their products in their supply chain

    Supplier Readiness and Willingness

    • A few pharmaceutical companies, like Recipharm and Bayer, among others, are sourcing APIs by engaging with their suppliers on a VMI model
    • Suppliers expect higher volume and total value for the product, higher transparency between the buyer and supplier, long-term relationship, longer contract duration, etc., to supply under VMI

    Adoption of VMI in the Pharmaceutical Industry

    Adoption of VMI in the pharmaceutical industry is lower compared to other industries, such as FMCG, engineering goods, automobiles, etc., as there are not much mutual benefits for the vendor and the client in implementing VMI. Pharmaceutical R&D has taken a lead in implementing VMI, as there is a need for continuous replenishment of the materials in need.

    • The pharmaceutical industry has always been slow in implementing any new innovations in the supply chain and it applies to VMI adoption also. The rate of adoption is low at an industry level
    • The industries which have higher adoption of VMI have higher cost of the goods sold. The pharmaceutical industry has lower total cost of goods sold compared to other industries, which drive the pharmaceutical companies to focus more on their sales, R&D, and other core areas of expertise
    • The pharmaceutical industry has always been slow in implementing any new innovations in the supply chain and it applies to VMI adoption also. The rate of adoption is low at an industry level
    • The industries which have higher adoption of VMI have higher cost of the goods sold. The pharmaceutical industry has lower total cost of goods sold compared to other industries, which drive the pharmaceutical companies to focus more on their sales, R&D, and other core areas of expertise

    Benefits for a Pharmaceutical Manufacturer when Implementing VMI

    Improved Operational Efficiency

    The overall operational efficiency in the procurement process is greatly reduced by the implementation of VMI

    • Reduced paper work and communication with improved VMI platform
    • Shorter order fulfilment time
    • Lesser man power for inventory management
    • More focus on core competency

    Lower Risk Associated

    Risk associated with the supply chain is reduced drastically, as the ownership of inventory and delivery is completely transferred to the supplier

    • Stock outs are reduced significantly
    • Inventory management and delivery is transferred to the supplier
    • Supplier's risk is reduced as there is more transparent and strategic collaborations

    Cost Reductions

    Total cost reduction is an additional benefit as a result of increased operational efficiency

    • Reduced inventory carrying and management cost
    • Reduced operating cost
    • Reduction in the overall cost associated with communication
    • Inventory management and warehouse cost reduction

    Supplier Readiness for VMI in the Pharma Industry

    • Suppliers of core raw materials, like active ingredients, are still reluctant to supply materials under VMI, as the volume is low and also the number of replenishments is less
    • Very few suppliers for pharmaceutical raw materials, such as active ingredients, are successfully managing their supply through vendor managed inventory. For example, Recipharm is managing almost 80 percent of its supply from its Stockholm facility through VMI
    • Common chemicals, packaging materials, etc., are readily and easily supplied and managed by vendor managed inventory