Intoduction

The supply chain structure of the pharmaceutical industry in terms of in-bound material supply, production footprint in active processing and drug product manufacture, and downstream supply chain operations has not changed for decades. Despite healthy product margins and progressive improvements in production process control and consequent productivity, the pharmaceutical industry when compared with other process industries, operational performance levels are well below process-industry norms on right-first-time quality, inventory, and service levels. Structural changes to pricing models may, in the future, also challenge this strong margin position, as healthcare providers move to a manufacturing-cost-based pricing model rather than the "value"-driven pricing arrangements of today.

In terms of quality and the repeatability of manufacturing processes, most pharmaceutical firms operate at levels of between 3 and 4 F in terms manufacturing right-first-time, costing the global industry some $20 bn annually.

The current predominantly batch and centralized manufacturing model has resulted in product supply chains, which typically are between 1 and 2 years in length, with a huge associated cost of inventory. The manufacturing assets that most "big pharma" companies have for product manufacture are suited to blockbuster supply, relying on large-scale centralized batch manufacturing plants, located predominantly in developed countries. Current trends in the industry suggest that smaller, more niche volume products will become the norm with fewer blockbusters, within a market demand context where globalization will require the ability to supply multiple geographically dispersed locations, collectively representing a more fragmented product portfolio. It is against this background that we seek, in this paper, to look at the impact of continuous manufacturing on the supply chain. In this context, we go beyond the simple "batch" or "continuous" production process technology choice, but consider how we might migrate supply chains from a "batch" campaign mind-set, to a continuous material flow model, utilizing continuous production processing technologies where appropriate.

The paper considers how a change to continuous processing might transform the industry to a more efficient and adaptive manufacturing supply chain that is being increasingly demanded by institutional payers leading to benefits to end-user patients. This is becoming all the more necessary for the industry as new technologies and affordability challenges require multiple supply chain models that can deliver the drug products of the future. The paper is structured as follows; identifying the scale of the opportunity, setting a vision for future pharmaceutical supply chains and the business models that this future context may involve, how these future networks may be designed, and the transformation challenges that need to be overcome to realize the potential of continuous manufacture. In this transformation context, the dynamic capabilities required to transform the industry will be discussed and how both risk and resilience will feature in the design of future supply chain models.