The digitalization of procurement in the pharmaceutical sector

The digitalization of pharmaceutical procurement is a process that aims to integrate digital technologies into the management of purchases in the pharmaceutical industry. It's about using IT tools and systems to automate and optimize procurement, inventory management, and customer relationship processes. In the pharmaceutical sector, the digitization of purchases has many advantages.

Although the pharmaceutical industry has entered a phase of maturity, it is still facing significant challenges.

The starting point: ever stronger constraints in terms of costs for Health Buyers.

The pharmaceutical industry is also facing an upheaval in the habits of its customers (hospitals, doctors, patients).

First, it improves supply chain efficiency and reduces costs. Through better inventory management and optimized logistics flows, pharmaceutical companies can ensure a continuous supply of pharmaceutical products while reducing inventory management costs. In addition, the digitalization of procurement makes it possible to strengthen the competitiveness of pharmaceutical companies. By using digital tools, pharmaceutical laboratories can manage their supply chain in a more precise and responsive manner, which allows them to respond more effectively to market demands and offer added value to their customers.

Why has the digitalization of pharmaceutical companies become essential?

There are 3 observations in the pharmaceutical industry:

• From an economic point of view — a multitude of operational activities, decreasing marginal returns on the latest innovations in services and medicines, the expiration of patents, the proliferation of generic drugs, the delocalization or outsourcing of complex services requiring procurement capacities that go well beyond traditional transaction methods,
• From a political and regulatory perspective — enormous pressure on margins with the tightening of public health policies, rising costs in other areas of health, pressure from health insurance companies to reduce prices, patients and shareholders increasingly demanding safety and profitability,
• From a strategic and commercial point of view — “Featured Brands” are no longer essential and there is a change in the way patients are supported: practitioners who until now have focused on epidemiological treatment are turning to preventive treatments while stopping the progression of the disease to reduce health care costs and increase the quality of life of patients.

The digitalization of pharmaceutical purchases also allows for better collaboration between the various actors in the supply chain. Thanks to digital tools such as collaboration and information sharing platforms, pharmaceutical laboratories can optimize their relationship with their suppliers, service providers and subcontractors. This promotes the creation of a collaborative ecosystem and improves the responsiveness of the entire supply chain. In addition, the digitalization of pharmaceutical procurement makes it possible to better manage the risks associated with pharmaceutical regulations.

Pharmaceutical laboratories must comply with numerous regulatory requirements and ensure the traceability of pharmaceutical products throughout the supply chain. The digitization of purchases makes it possible to set up secure information systems and to guarantee better regulatory compliance.

3 Critical Challenges For Health Buyers

Therefore, healthcare manufacturers are in the process of reviewing their Purchasing strategy to face 3 crucial challenges:

• The sourcing and selection of innovative suppliers from the early stages of research and development and throughout the delivery of health care,
• The construction of high level partnerships integrating total collaboration with external research organizations or other suppliers of excellence,
• The provision of high standards for non-production purchases, often linked to the overall performance of the company.

The digitalization of pharmaceutical purchases is based on the use of numerous digital levers such as e-commerce platforms, operational information systems, sourcing and purchasing optimization tools, as well as solutions for dematerializing purchasing processes. These tools enable better inventory management, optimization of procurement processes, cost reduction, and improved customer satisfaction.

Digital Transformation in the Pharmaceutical Industry

Like all sectors of the industry, the pharmaceutical industry is undergoing its digital transformation. At a time when the entire retail sector is shaken up by the advent of digital technology and changes in customer behavior, pharmacies and laboratories can no longer do without this revolution. The benefits of this change are significant: cost reduction, process optimization, improvement of internal and external communication, support for business growth, competitive advantage, etc.

Several factors are at the origin of the digitalization of companies in the pharmaceutical industry:

• The generalization of technological devices (smartphones, computers, tablets...) and access to a growing number of applications that allow customers to easily search for information and buy directly online. To remain competitive and innovative, pharmaceutical companies must make their digital transformation.
• The unstable economic and health context: the health crisis linked to covid and the consequences it has left are a perfect illustration of this.
• The emergence of new technological tools called disruptive: blockchain, artificial intelligence and the Internet through the object. These are all technological innovations that break with old technologies and are at the origin of digital transformation, including the digitization of purchasing processes, the digitization of sales or the digitization of businesses.
• Other factors that trigger transformation Digital technology in the pharmaceutical industry are also listed, including the stock market value. The digitalization of processes allows companies to gain in productivity and increase their margins. This is not only beneficial to businesses, but also to shareholders or associates. There is then a growing interest in biotech and e-health startups.

In addition to these triggering factors, there are also factors that hinder or hinder the digital transformation of companies in the pharmaceutical industry. One of these is pharmaceutical culture, which is still considered to be traditional. Some companies may have difficulty in digitizing their sales or digitizing their purchasing processes because of this obstacle.

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Strategy for the digitalization of pharmaceutical procurement: Keys to success and collaboration with experts for an effective transformation

To implement the digitalization of pharmaceutical procurement, companies must have a clear vision of their digital strategy and define the objectives to be achieved. They must also invest in the training and professionalization of their purchasing teams in order to develop the skills necessary to use the new digital tools. Finally, they must collaborate with specialized partners such as consultants in the digitization of purchases or providers of technological solutions to support their digital transformation.

The other obstacle to the digitalization of pharmaceutical companies is the rigor of regulations, since this sector directly concerns the health of individuals. For example, the manufacture of drugs is subject to the obligation to have flawless traceability. However, many are unaware that digitization solutions make it possible to ensure this traceability.

Digitalization, including the digitization of purchases, brings numerous advantages to companies in the pharmaceutical sector. First, it allows them to become more efficient. Digital technology is a vector of performance and productivity. Thanks to digitalization tools, including Procure-to-Pay, teams can work more effectively by leaving behind time-consuming and low-value tasks in favor of more strategic missions with greater added value.

The dematerialization or digitalization of purchasing processes, among others, also allows companies in the pharmaceutical industry to secure their data. Information concerning the company, customers and R&D activities are all sensitive data that must be protected. They should not be shared via email or stored on the server. Digitization tools make it possible to promote collaboration while limiting the risks of hacking, losing or leaking information.

Finally, digital transformation allows company managers to make the best decisions. Like any business, pharmacies, laboratories, or biotech companies must adopt the best strategic choices to stay in the race. Big data, artificial intelligence and connected objects can help them better understand market challenges, find the best opportunities, monitor the best innovations and make the best decisions.

Digitizing Purchasing: A Process Revolution

Long considered a support and administrative function, the purchasing function occupies an increasingly strategic place within the company. Purchasing objectives no longer consist only in controlling costs and optimizing the quality/price ratio. Today, they go further: to be in line with the global objectives or the global strategy of the company. For this, the digitization of purchases has become a must for all businesses. Pharmaceutical companies are no exception.

The transformation or digitization of procurement processes results in a fundamental change in the exercise of the purchasing function and in interactions with all internal functions and suppliers. It is said that a procurement transformation is effective or successful when it contributes to bringing lasting benefits to the company and is in line with the company's goals. This requires better control of costs in order to generate profitability gains over time, and by improving the customer-supplier relationship.

E-procurement or Procure-to-Pay solutions, such as Sourcing Force, make it possible to automate purchasing processes, from purchasing strategy to payment. Being integrated into the process through access to the platform, suppliers will feel privileged and involved in achieving the organization's goals. The implementation of e-invoicing solutions also makes it possible to better control the billing process and to reduce the risk of errors and late payments.

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6 Real Benefits Of Digitizing Purchasing Processes:

The digitization of purchases via a platform specialized in health, such as Sourcing Force, offers 6 real advantages for optimize pharmaceutical expenses :

Expenditure Analysis

To take control of indirect purchasing categories such as marketing, maintenance, travel or even R&D,

E-Sourcing Suppliers

To take full advantage of globalized supplier competition by launching online tenders or comparing catalogs on a single platform,

Contract Management

The digitalization of contracts makes it possible to meet the security and traceability requirements inherent in commercial and confidentiality agreements. The sending of automatic alerts and the centralization of regulatory documents are two significant levers,

Supplier Performance Audit

To actively manage the continuous improvement of strategic suppliers through a highly flexible and configurable solution,

Budget Control

To align projects with the company's financial performance goals by documenting all order lines,

Online Procurement

Because the integration of eCatalogues Suppliers in hosted mode or PunchOut opens up new opportunities for internal customers. Unique access to all supplier agreements and a validation circuit for all critical orders are undeniable “pluses”.

The Digitalization of Pharmaceutical Purchases: Lever of Agility and Competitiveness for the Pharmaceutical Industry

The digitalization of pharmaceutical purchases is a major challenge for pharmaceutical laboratories. It makes it possible to optimize procurement processes, improve customer relationships, reduce costs and strengthen competitiveness. Thanks to the use of new technologies, pharmaceutical companies can manage their supply chain more effectively, guarantee the quality and traceability of pharmaceutical products, and create added value for their customers.

The digitalization of pharmaceutical purchases is therefore an essential lever to support the transformation of the pharmaceutical industry towards more agile, collaborative and digital management.

The digitalization of purchasing processes, through the adoption of an eProcurement solution, makes it possible to support the change taking place in the pharmaceutical sector and to gain in efficiency.

The acceleration of “Time-to-Market” in the healthcare industry is synonymous with decisive competitive advantage. To achieve this, the necessary redesign of procurement procedures involves the Digitalization of Purchasing.

The automation of administrative management processes leads in particular to better decision-making.

Suppliers contribute fully to this support for change and innovation through accelerated and collaborative exchanges.