The pharmaceutical industry has spent the past few years pouring money into supply chain technology, but the sector’s core weakness has not gone away: better visibility is not the same as better resilience.
The pandemic exposed how heavily drug production depends on concentrated active pharmaceutical ingredient manufacturing, and subsequent trade shocks and geopolitical tensions have only sharpened that concern. In the US, Axios recently reported growing unease about dependen...
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ce on Chinese suppliers, while a Washington University study cited by Supply Chain Connect found that more than 80% of APIs for essential medicines in key therapeutic areas lack a US manufacturing source. Fewer than 5% of large-scale API sites are located in the US, underscoring how limited domestic back-up remains.
That reality helps explain why life sciences companies have rushed to adopt AI-based risk monitoring, digital control towers and supply chain twins. Yet, as Martin Rode argues, the problem is rarely a lack of data. It is what companies do with it.
Digital systems can identify concentration risk, dependency clusters and upstream bottlenecks, but they cannot force executives to accept the commercial and regulatory trade-offs involved in changing suppliers, qualifying alternatives or carrying more inventory. In practice, many organisations can now see fragility more clearly than ever before, but still make decisions that preserve efficiency over flexibility.
That tension is increasingly visible in the latest wave of supply chain redesign. Pharmaceutical Commerce reported that enforcement of the Drug Supply Chain Security Act across 2025 and 2026 has made interoperable, package-level traceability a major constraint, while tariffs and trade volatility are pushing companies to reconsider sourcing models. The same report said AI control towers and digital inventory twins are being used to reroute shipments and rebalance stock, but only within guardrails that still depend on human decision-making.
Deloitte has found a similar pattern. Its research suggests biopharma firms have seen gains from digitalisation, particularly in risk-sensing, yields, warehouse efficiency and sourcing, but not to the degree many executives expected. In other words, the tools are improving operations, but they are not automatically rewriting the incentives that shape supply chain design.
One of the most persistent blind spots remains visibility beyond direct suppliers. Companies may know their tier-one partners well, but they often have little clarity about those suppliers’ own dependencies, especially where specialised inputs are concentrated in a small number of countries or facilities. That matters in pharmaceuticals more than in many other industries, because a single missing precursor can ripple quickly through the chain.
The result is a familiar pattern: resilience measures are discussed when conditions are calm, then postponed because they look too expensive or too disruptive. When a shortage or geopolitical shock arrives, the same options suddenly appear urgent, but the room to manoeuvre is already much smaller.
The real lesson is that resilience is not a software upgrade. It is a leadership choice. Technology can surface the risks, but it cannot replace the decisions that determine whether a supply chain is designed to absorb shocks or merely to operate cheaply until it cannot.
Source: Noah Wire Services
