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Business & Regulation Supply Chain

The Intersection of Sustainability

We all understand the role of track and trace in ensuring the quality and safety of pharmaceutical products (and preventing counterfeits from entering supply chains), but have you ever thought about track and trace for environmental purposes? 

Over the last few years, we have seen environmental, social, and governance (ESG) initiatives rise to the top of the strategic agenda for organizations worldwide. Consumers, stakeholders, and regulatory bodies increasingly scrutinize businesses’ environmental impact, making sustainability imperative. According to PwC’s 27th Annual Global CEO Survey, we have now reached a point where 40 percent of business leaders say they are willing to compromise profits in the short term to prioritize climate action. 

A global Deloitte survey of biopharma supply chain executives in 2023 also revealed that companies were aiming to leverage their technological capabilities to improve sustainable reporting while better articulating their sustainability efforts to stakeholders. Twenty-four percent of surveyed executives noted that their organizations expect to be able to provide external stakeholders with a real-time view of how their sustainability initiatives are progressing in the next two years. 

To create accurate and meaningful ESG goals, organizations must first ascertain how sustainable their manufacturing practices, product offerings, and services are. This approach should include measuring the true environmental impact of a product by charting the precise journey of how the product was made, including the suppliers and materials involved. 

Tracking is a fundamental part of this approach. By following the origins of raw materials, organizations can select materials that are recyclable, biodegradable, or with a smaller carbon footprint. They can also choose suppliers with robust sustainability practices and identify ways to minimize waste along the product’s journey. 

Supplier quality checks represent another measure to ensure that ethical business practices are followed. Given that a significant portion of carbon footprint and associated risks lie within the supplier network, relying solely on internal control measures isn’t sufficient – and that’s why thorough supplier checks are imperative.

Good manufacturing processes and smart packaging, in tandem with automation via Industry 4.0 – can minimize waste and inefficiencies. Smart packaging, specifically, avoids additive technologies and uses digital fingerprinting to combat counterfeiting and diversion. Additional practices, such as tracking resources, performing quality checks, aligning finished goods with inventory, and overseeing low-carbon logistics within the supply chain are also key sustainability measures.

Finally, choosing a track-and-trace vendor that exhibits good practices and provides low-carbon footprint solutions is essential. The quality of the solution is vital for sustainability; otherwise, there is high wastage due to production line upgrades. Today, consumers and brands demand transparency, so adopting technology that enables precise tracking and tracing is essential to building trust. Here, validating product authenticity via digital means – rather than additive ones – grants access to information about ingredients, raw material sourcing, and a product’s journey. Whether or not the consumers choose to do so, the access makes them feel more comfortable about their purchase. Fast-growing digital passports record the entire product journey from raw materials to end-of-life disposal. They promote sustainability by providing transparency, enabling circular practices, and fostering conscious consumption.

Manufacturing pharmaceutical products demands vast amounts of energy and carbon. According to Deloitte, more than 70 percent of the emissions produced by life sciences and healthcare companies originate in their supply chains. These statistics reaffirm the importance of selecting the right vendors and solutions with better sustainability compliance to help contribute to waste management. 

Sustainability has become a driving force for change, and pharmaceutical companies must explore new avenues that improve the visibility of their supply chains to make responsible choices, reduce waste, and enhance transparency. Given that the industry is heavily regulated, some sustainable practices that work well in other sectors cannot be applied to health-related products. For example, creating environmentally friendly packaging can be challenging because manufacturers must balance the safety aspects of recyclable or disposable materials. Nevertheless, sustainability best practices, technologies, and tight governance will all play a critical role in accomplishing these important goals, while differentiating companies and their products.

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About the Author
Sreedhar Patnala

General Manager at Systech

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