Segmental differences in pharmaceutical industry and its impact on supply chain performance

Abstract

PurposePharmaceutical industry involves highly specialized business processes where strong research and development focus along with market differentiation and localization are the deciders of success. This has led to evolution of segments and complexities in supply chain. This paper aims to focus on segmental differences in supply chain performance of Indian Pharmaceutical firms.Design/methodology/approachThis paper measures supply chain performance of select segmental players of the pharmaceutical industry using financial metrics and supply chain operations reference (SCOR) key performance indicators through a five-year timeline. The best performance results are compared across the segments to identify unique performance features, if any. The sample results are validated through hypothesis testing methodology.FindingsThis paper has evidenced that the innovators segment is performing better in cash-to-cash cycle time and supply chain working capital productivity, whereas generics segment is doing better in distribution cost efficiency and total cost to serve aspects.Research limitations/implicationsThe paper is based on historical financial data of firms and measures the firm focused supply chain performance. The results may not be generalized in a global context but serve as a motivator for other researchers to take similar studies. The paper may further be analyzed with primary data of the firms to understand the segmental difference in customer focus supply chain performance measures.Practical implicationsThis paper has brought out important segmental supply chain performance features of the Indian pharmaceutical firms and identified segment-specific problems by integrating SCOR KPIs and financial metrics.Originality/valueThis paper has integrated both SCOR KPIs and financial metrics to provide unique insights on segmental differences in the performance behavior of pharmaceutical supply chain.