How COVID-19 Has Shed a Spotlight on The API Manufacturing Supply Chain

We all knew too well the challenges of finding paper towel, toilet paper and other consumer goods at the outset of COVID-19. But what about intermediates and raw materials for critical drugs?  While supply chain disruption has begun to tame down, there continues to be delays in receiving critical materials.

The impact of the pandemic has caused some level of disruption in key aspects of the API manufacturing supply chain in terms of availability of those raw materials and supplies, transportation delays, and prices.

Especially for Contract Development & Manufacturing Organizations (CDMOs) or any company working in a chemical plant, there have been problems receiving Personal Protection Equipment (PPE) such as Tyvek suits and other protective gear used in the plant.

The challenges have been widespread. The Institute for Supply Management conducted a survey in February and found that nearly 75% of responding companies reported some kind of supply chain disruption due to COVID-19 and more than 44% didn’t have a plan for addressing supply chain disruption from China.

From trucking routes, to air and sea cargo, transportation challenges have impacted the steady flow of goods across the global supply chain. Raw materials or PPE have been unable to reach ports due to lockdowns and a shortage of manpower at air cargo facilities, terminals, shipping ports, warehouses and customs offices have created significant delays.

Fortunately for Seqens CDMO NA, we mostly deal with highly specialized chemicals and require smaller amounts of raw materials, so we have not been as sharply impacted as other CDMOs or pharma firms. In addition, because of Seqens’ global reach, with subsidiaries across Europe and the U.S., we’re able to draw upon the robust network of suppliers, and share company-wide resources. 

Despite each company’s unique situation, it’s important to have a plan for anticipating and addressing supply chain disruption during the pandemic and beyond. 

Consider the following five measures:

1. Order materials before you need them. While raw materials and intermediates can be costly and it can be difficult to predict what may be needed and how much of it, there are some basic starting materials and other chemicals, such as Ethanol, that are often required. It’s important to order those weeks before they are needed, or keep a steady supply at all times.
2. Ask customers about their forecasts for 2021. It’s important to prompt customers to share their future plans with you now, so that you can adequately prepare. By ordering the appropriate supplies and lining up the right suppliers well in advance, you have the opportunity to more strategically plan for any disruption, while also sourcing the best suppliers for the job. In addition to inquiring with individual sponsors, here at Seqens CDMO NA we try to look at everything we will be producing in the next six months to determine what we will need, in terms of materials and resources, and plan accordingly.
3. Source with multiple suppliers. China and Europe were impacted first with COVID-19, and different regions have had surges at different times. By working with multiple suppliers in different regions, you can ensure that there is back-up and greater chances of minimizing disruption. In addition, as prices for PPE and other supplies increase because of demand, vetting multiple suppliers can help you receive the best rates.  
4. Consider paper-based and virtual alternatives to audits. In light of the safety measures that must be taken because of COVID 19, many companies are reimagining how they conduct CDMO site visits and supplier audits and turning them into virtual ones.  In addition, previous audits that took place in person are also being conducted via manual quality questionnaires.
5. Be prepared to pivot.  The pandemic has touched virtually everyone around the world in some way. In addition to finding ways to minimize supply chain disruption in their own firms, CDMOs should also be part of the solution.  For example, here at Seqens CDMO NA, because of a shortage of hand sanitizer, we manufactured our own and provided it to firms in need, and also donated it to local first responders.

Smooth supply chains are the key to the proper flow of goods and disruption at any stage can have dire consequences on the delivery of critical ingredients for drug development. One major lesson that has come out of the pandemic is that today’s CDMO needs to be proactive to anticipate supply chain disruption and remain flexible in order to quickly pivot to meet a volatile situation. By turning our lessons learned into practice, all firms will be the better for it.

For more insights from Seqens CDMO NA please read: The Top 5 Reasons API Projects Fall Behind; Keeping the Plant Open During the Pandemic; or Setting Unprecedented Records in Vaccine Development During the Pandemic.

About the Author

Ed is President & CEO of SEQENS North America (formerly PCI Synthesis). He serves as a co-chair of the New England CRO/CMO Council and sits on the Industrial Advisory Board for the Department of Chemical Engineering at UMass, Amherst. Ed is also a long standing member of the American Chemical Society and advises the Bulk Pharmaceutical Task Force of the Society of Chemical Manufacturer’s and Affiliates (SOCMA)...

Do you have questions? Talk to Ed.