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Supply chain configuration conundrum: how does the pharmaceutical industry mitigate disturbance factors?

Huq, Fahian Anisul/FAH; Pawar, Kulwant S.; Rogers, Helen

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Fahian Anisul/FAH Huq

Kulwant S. Pawar

Helen Rogers


How a supply chain (SC) is configured can have a significant impact on the performance of global firms. More specifically, disturbance factors (i.e. those factors associated with uncertainty and risk) are increasingly important considerations. This paper focuses on endogenous, exogenous and environment-related SC disturbance factors and their relative importance when configuring global SCs. Three alternative scenarios of SC configurations for European-based pharmaceutical firms are identified - insource nearshore, outsource nearshore and outsource offshore. Through a multi-phase, mixed-method approach we find that the top five disturbance factors managers should be aware of while configuring their SCs are quality defects, unforeseen and random interruptions in manufacturing processes, order processing difficulties, untimely delivery of products, and a mismatch between market demand and supplier responsiveness. This study is able to provide insights into the impact of disturbance factors on the SC configuration strategy for Big Pharmas. We show that SC disturbances influenced the decision to bring production back home (reshoring) or to a closer location (near-shoring). To mitigate the effects of disturbances many Big Pharmas recalibrated their SC configurations by insourcing core products, outsourcing non-core products offshore and developing offshore insourcing capabilities through ‘captives’.

Journal Article Type Article
Acceptance Date May 22, 2016
Online Publication Date Jun 20, 2016
Deposit Date Mar 23, 2017
Publicly Available Date Mar 23, 2017
Journal Production Planning & Control
Print ISSN 0953-7287
Electronic ISSN 1366-5871
Publisher Taylor & Francis Open
Peer Reviewed Peer Reviewed
Volume 27
Issue 14
Keywords Supply chains, Pharmaceuticals, Disturbance, Risk, Outsourcing, Reshoring
Public URL
Publisher URL
Additional Information This is an Accepted Manuscript of an article published by Taylor & Francis in Production Planning & Control on 20 June 2016, available online:


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