Challenges for Third Party Manufacturer

Challenges for Third Party Manufacturer

Let's understand Third Party Pharma Manufacturing first, it’s a process wherein a Pharma Marketing company who does not have manufacturing the unit takes the services of a manufacturing unit who utilizes his manpower and Machinery to manufacture the required approved product for that marketing company. On the box and foil it's printed manufactured by the name of the manufacturer and Marketed by the Marketing company both including the address. The Quality related Matter is the responsibility of the Third-party Pharma Manufacturer and Liquidated the stocks before expiry is the responsibility of the marketing company, both are interdependent and work as a team to further their respective cause to produce and sell quality medicines to the ailing millions.

Consolidation of Orders:

The biggest challenge for any Third Party Manufacturing Pharma is to consolidate the orders of similar products so as they are able to manufacture at least one batch size which varies between 100000 to 1000000 tablets or capsules. After the production of one batch, the entire machine is sterilized and is prepared for the next production if one is not able to manage the batch size it escalates the cost.

Fluctuating Price of RAW material:

The regular fluctuation in the prices of RAW material results into less capacity to maintain the stock as one is never sure what would be the next price; this disturbs the planning, resulting in delay supplies and unsatisfied customers. If the price of RAW material increases it affects the final price and the customer always feels cheated and thus he keeps looking out for alternatives.

Frequent demand for maintenance:

Since the manufacturer is dependent on the machine so is never sure of consistency, if there is a breakdown then despite all your good intentions the production gets delayed resulting in poor customer satisfaction. Unless and until a mechanic will not come and rectify, the problem persists and the mechanic being outsourced, it has its own issues of management.

Extra Packing Material:

In Third-party since you need to cater to all types of parties, placing orders in a small and large batch, when someone orders small batch the print Material like Boxes and Foil has to be printed in minimum quantity so out of printed quantity some are used and rest is stored for further use and if there are no repeat orders the packing material is a waste and not only it is waste but for a particular time frame it's stored also as you are not sure when someone is going to place the order, this takes a huge toll on the space utilization of the manufacturer and he has to earmark a large space to store the PM. In case there are changes in the regulation than all the stored packing material is wasted and needs to be changed and there is a huge loss to the manufacturers.

Parties not Picking the Stocks:

At times parties place the order and fail to pick the stocks, resulting in space getting blocked and the funds getting blocked and moreover the marketing team is wasting its time in following up the parties to lift the stocks rather than creating more business opportunity. Parties not paying in time is another major issue with the manufacturer as few marketing companies when they give good orders demand credit and if obliged the payments get delayed that disturbs the cycle of the manufacturer as his money which was to used to purchase the RAW material gets blocked.

These are few challenges of the Pharma Manufacturers and anyone who is able to handle these challenges effectively can do really great in this line of Business i.e. pharma contract manufacturing.