Outsourcing, the medicine against Supply Chain headaches?

Today many companies in various industry sectors, like the fast moving consumer goods, electronics, automotive and spare parts, focus on core activities to maintain and strengthen their competitive advantage. The non-core logistics activities are often outsourced to logistics service providers. It has been estimated that about 40 percent of the global logistics is outsourced.

Especially in the pharmaceutical industry, one of the biggest industries, only a small part of the non-core logistics activities is outsourced. In relation to other industries the level of outsourcing of these activities is limited. Moreover the outsourcing logistics spends are smaller and more scattered, giving an indication on the lesser maturity of the outsourcing acceptance within Pharma.

Particularly in today’s pharmaceutical world there is the ultimate momentum to move to outsourcing of warehousing and distribution. Sales margins are under pressure and the reduction of operational costs is not a luxury but a necessity. The rapid growth of capable external service providers with pharmaceutical expertise and a global coverage will encourage the sector in this direction.

For the pharmaceutical industry, outsourcing is not just a cure for their Supply Chain headaches but equally critical for their financial health.