Managing logistics risks in pharmaceutical supply chain: a 4PL perspective

Abstract

Supply chain risks and vulnerabilities have been growing recently due to the global, interconnected, and complex networks. The Pharmaceutical Supply Chain (PSC), as a critical national asset, requires increased attention to mitigate the severe consequences of global events. With various risks impacting both the firm’s performance and the lives of patients, effective risk management is paramount for the PSC. This empirical study focuses on the UK-based Fourth-Party Logistics (4PL) provider, which manages pharmaceutical manufacturers’ logistics operations. The 4PL provider’s past experiences with unexpected risky events have influenced its performance. This study aims to explore inherent logistics risks, evaluate them, and recommend mitigation strategies. An integrated approach considering probability, impact and manageability parameters is proposed for risk assessment. In identifying 11 risks from the 4PL perspective, structured interviews are used to gather risk information. The probability of risk occurrence, severity of impact, and manageability are quantified. The delivery delay should be given priority in the follow-up risk management process, while counterfeiting has the least priority. Finally, three resilience strategies named improving flexibility, redundancy, and creating a risk culture are proposed for the 4PL case company. The study offers multiple theoretical and managerial implications based on its findings.