Creating and Enhancing a Risk Assessment Framework in Pharmaceutical and Biotech Supply Chains
A fast-growing drug discovery and development company has partnered with Clarkston to implement a robust Supply Chain Risk Management (SCRM) model. This model, designed from start to finish by Clarkston, aims to ensure supply continuity, regulatory compliance, and product quality, while adapting to dynamic geopolitical and market environments.
Key Steps and Components of the Model
The SCRM model encompasses five key steps: Risk Identification and Assessment, Supplier Qualification and Strategic Sourcing, Risk Mitigation and Contingency Planning, Technological Integration and Proactive Monitoring, and Geopolitical and External Influences.
- Risk Identification and Assessment
- The process begins with systematic identification of potential supply chain risks, such as natural disasters, pandemics, political instability, supplier failures, transportation bottlenecks, and regulatory changes. Regular risk assessments and audits are employed to evaluate supplier performance, compliance, and vulnerabilities.
- Supplier Qualification and Strategic Sourcing
- Thorough supplier selection is conducted, including audits, qualification, and final risk consolidation before approval. This includes confirming compliance with Good Manufacturing Practices (GMP), quality standards, and business continuity plans. Strategic sourcing involves diversifying suppliers geographically and developing collaborative long-term partnerships to build supply chain resilience and innovation.
- Risk Mitigation and Contingency Planning
- Contingency plans are developed to cover alternative sourcing, inventory buffers, backup manufacturing capabilities, and tested disaster recovery procedures. Clients are encouraged to collaborate closely with stakeholders to share information and coordinate risk response efforts.
- Technological Integration and Proactive Monitoring
- Emerging technologies such as data analytics, Artificial Intelligence (AI), and Internet of Things (IoT) are integrated for real-time risk monitoring, predictive analytics, and improved decision-making. Frameworks and tools for continuous risk evaluation and dynamic risk management are employed to anticipate disruptions before they escalate.
- Geopolitical and External Influences
- Geopolitical risks such as trade policies, regional conflicts, political instability, and regulatory divergence are monitored to mitigate their impact on manufacturing and supply routes. Diversification strategies are adopted to expand operations to less volatile regions, hedging against geopolitical shocks and supply chain disruptions.
Summary Table of SCRM Model Elements
| Step | Description | Example Actions | |--------------------------|----------------------------------------------------------------------|-----------------------------------------------------| | Risk Identification | Systematic identification of supply chain vulnerabilities | Risk assessments, audits, criticality check | | Supplier Qualification | Evaluating and approving suppliers based on compliance and risks | GMP audits, risk consolidation, supplier selection | | Strategic Sourcing | Diversification and long-term collaboration with suppliers | "China + 1" strategy, global sourcing | | Risk Mitigation | Developing contingency plans, buffers, and alternative sources | Disaster recovery plans, inventory stockpiling | | Technological Integration| Use of AI, data analytics, IoT for risk detection and response | Predictive analytics, real-time monitoring | | Geopolitical Risk Management| Monitoring and mitigating geopolitical and external risks | Geographic diversification, political risk tracking |
Implementation Phases
Clarkston approached the project in three phases. The first phase involved developing a standard procedure for managing supply chain risk. In the second phase, pilot assessments were conducted, and the supply chain risk process was kicked off for identified business areas. The third and final phase enabled the client to independently manage their supply chain risks, with Clarkston providing all the necessary forms, templates, procedures, education, and assessment tools for ongoing supply chain risk assessment.
With this comprehensive SCRM model in place, the drug discovery and development company is now equipped to lead and manage future supply chain risks across their essential business functions, securing supply continuity, complying with regulatory requirements, safeguarding product quality, and adapting to dynamic geopolitical and market environments while leveraging technology for resilience.
[1]: Source 1 [2]: Source 2 [3]: Source 3 [4]: Source 4 [5]: Source 5
- The drug discovery and development company's collaboration with Clarkston enables the implementation of a Supply Chain Risk Management (SCRM) model designed to ensure supply continuity, regulatory compliance, and product quality.
- This SCRM model encompasses five key steps: Risk Identification and Assessment, Supplier Qualification and Strategic Sourcing, Risk Mitigation and Contingency Planning, Technological Integration and Proactive Monitoring, and Geopolitical and External Influences.
- Risk Identification and Assessment involves systematic identification of potential supply chain risks and regular risk assessments and audits to evaluate supplier performance, compliance, and vulnerabilities.
- Supplier Qualification includes thorough supplier selection, audits, qualification, and final risk consolidation before approval, ensuring compliance with Good Manufacturing Practices (GMP), quality standards, and business continuity plans.
- Risk Mitigation and Contingency Planning develops contingency plans to cover alternative sourcing, inventory buffers, backup manufacturing capabilities, and tested disaster recovery procedures.
- Technological Integration employs emerging technologies such as data analytics, Artificial Intelligence (AI), and Internet of Things (IoT) for real-time risk monitoring, predictive analytics, and improved decision-making.
