Risk Perception of Outsourcing of Medicine in Indian Pharmaceutical Industry

Abstract

Pharmaceutical companies are increasingly outsourcing their supply chain activities due to significant pressure to cut R&D expenses. The ability to outsource parts of one's global supply chain can be seen as a strategic competitive weapon rather than a cost-cutting measure, as it can allow for more adaptability in production, greater satisfaction of the ever-changing needs of the ultimate consumers, lower fixed costs, and better leverage of market position. For this reason, outsourcing the global supply chain has become a need for pharmaceutical companies to remain competitive. It helps businesses to make far more use of their primary competencies and resources than is possible via other methods. When implemented properly, global supply chain outsourcing solutions may increase returns on capital, lower risk, increase flexibility, and help businesses be more responsive to the needs of their customers and shareholders. Despite widespread recognition of the appealing advantages of global outsourcing, many of the inherent hazards have been largely ignored. Regulatory risk, operational risk, technological risk, and corporate social responsibility risk are only some of the dangers associated with outsourcing the pharmaceutical supply chain. Avoidance, reduction (mitigation), transfer, and acceptance are all methods of supply chain risk management that may be used to lessen an organization's vulnerability to supply chain outsourcing risks.