Modelling and Optimization of Pharmaceutical Supply Chains

A company's innovation dynamic can be appreciated through the life cycle of its products. Classically, a product's life cycle comprises the phases of development, launch, growth, maturity, and ends with a phase of decline. The specifics of these stages depend on the application sector in which the company competes. Whatever the field, the stages are carried out by a number of functional groups within the company, including R&D, manufacturing and distribution networks, in compliance with environmental, safety and product quality standards. The choices made by these entities are guided, among other things, by decisions involving the allocation of capital expenditure, economic profitability, marketing strategies, product and technology portfolio management, supply chain design decisions including manufacturing and distribution network structure, and the selection of strategic partners.

The complexity of this environment stems not least from the fact that these strategic decisions have to involve multiple functional units, and integrate the tactical and operational levels of managing the entire product portfolio. These decisions must also be taken in an environment rich in both external and internal uncertainties: external pressures and uncertainties include, for example, product demand, pricing, the entry of competitors into the market, the bargaining power of suppliers and buyers, and global economic dynamics, while internal uncertainties result in particular from unforeseen technical problems, production drifts due to variations in raw material quality, and the risk of failure in R&D activities.

This is particularly true of the pharmaceutical industry, which is the subject of this article. In this context, the contribution of new information technologies to the company's information system is an asset for deploying decision-support tools, including models, simulation and optimization tools, taking into account the interdependencies between different functional units and the necessary integration between decision levels. This article presents the characteristics of a drug's life cycle and the decision-making issues facing a pharmaceutical company. It takes stock of the methods available for resolving new product portfolio and pharmaceutical supply chain management issues. It identifies the obstacles still to be overcome in integrating the different levels.