Outlook on pharma operations – PDF free download



The pressure is building for fundamental change.
Before we look into the future, what do we see if we look back?
Overall, pharma operations have not changed much. Yes, companies
have gradually cut costs and lead times, and the business is managed
more professionally today. But pharmaceuticals are still made and
distributed essentially the same way they were 20 years ago. That will
have to change.

It’s hard to make accurate predictions in a dynamic environment,
but we can safely assume that today’s challenges will become more
severe. The industry and its stakeholders’ efforts to resolve pressing
issues will likely trigger fundamental changes. Companies that
anticipate and adapt to these changes will thrive in the years ahead.
Here are the opportunities we believe are most relevant:

Freeing up $25 billion in cash from inventory

On average, pharma underperforms on working capital management.
The average pharmaco holds 180 days of finished goods inventory
on hand, for example, with top performers at about 100 days. Their
peers in the consumer goods industry hold only 60 days’ inventory,
based on McKinsey benchmarks.

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