COVID-19 and What’s Next for API Sourcing?

Sponsored by Dr. Reddy's Laboratories

September 2, 2020

The pandemic challenged the global supply chain instantly. Geopolitical tensions and the call for localizations and self-reliance are further adding to the complexity of today’s API sourcing. In this article we look at supply chain security in a global environment and how digitalization can increase operational efficiency in API sourcing.

Author: Rajesh Sadanandan, Head of API Sales for the US and Europe


The COVID-19 pandemic challenged the global supply chain instantly. Drug supply chains throughout all regions of the world were turned on their heels due to wholesale shutdowns of manufacturing assets, transportation hubs, and ports of entry. Geopolitical tensions and the call for localizations and self-reliance continue to add complexity to today’s API sourcing. The drug manufacturing industry is currently working in a market environment that tests the commitment of manufacturers towards customers and ultimately towards patients.

The pandemic called for quick decision-making and focus on key priorities. At Dr. Reddy’s, our efforts have been focused on two key aspects during these times. First and foremost, we have been focused on the safety of all employees and their families. This has resulted in having many employees working from home. We have also taken a host of measures to provide the optimal conditions for a safe workplace at our manufacturing sites. We responded quickly and with great agility, with significantly enhancing capacity of our buses for social distancing, temperature checks at all entries and exits, disinfecting machines to spray outer garments and shoe soles, providing personal protective equipment (PPE) to employees and contractors as well as additional social distancing measures. In addition, some plants geared up to make disinfectants and hand sanitizer. The second, but equally important aspect has been to ensure an unbroken supply chain to produce and supply high-quality active pharmaceutical ingredients and medicines.

Comprehensive approaches to supply chain security

The industry is facing a unique situation which stretches the supply chain to the limit. Fortunately for us, the efforts we have taken during the past few years have greatly helped normalize supply to meet customer demand. Dr. Reddy’s has been working on several initiatives to mitigate risk in the supply chain by the backward integration of key starting materials, establishing strategic sourcing partnerships and logistics partnerships, and improving capacity management of our manufacturing units. We continue to mitigate geographical risks by leveraging our manufacturing assets throughout India, Mexico and the UK for our APIs and in India and the US for our formulations. Governance, Risk Management, Compliance as well as high Safety, Health and Environment (SHE) standards are other aspects, which help us to increase the effectiveness of our supply chain. We are also committed to engaging suppliers that make sustainability part of their business model, apply high SHE standards and share the same vision with us to ensure access to affordable and high-quality medicines worldwide. We are also a full member of the Pharmaceutical Supply Chain Initiative (PSCI), which aims to establish and promote responsible practices that will continuously improve social, health, safety and environmentally sustainable outcomes for our supply chains. These principles address five areas of responsible business practice: ethics, human rights and labor, health and safety, environment, and management systems.

Making our supply chain more robust is an initiative that has been going on for some years now. We have made great progress in minimizing the risks of external factors, especially for critical molecules. However, API suppliers like Dr. Reddy’s must constantly keep improving to ensure a robust supply for customers. Personally, I believe that the global supply chains are here to stay, and frankly, it doesn’t matter where the API is made. We can have weak links domestically just as easily as having weak links internationally. Redundancy, reliability and responsibility are key to de-risking the supply chain for global pharma companies. At Dr. Reddy’s, we are actively working with leading global companies to ensure we do what is right for both customers and patients. These close relationships enable us to positively impact supplies. Many of our customers share their long-term demands with us. This is of great help to ensure that we stockpile critical key materials.

Building successful digital engagement is a journey

Besides the supply chain challenges, we’ve all seen how quickly the pharma industry adapted digital tools during the pandemic. As recently as a decade ago, this would not have been as seamless as it was due to the lack of technology infrastructure. In addition to having many of our teams work remotely, we have instituted a unique tool for our customers which helped significantly improve our performance metrics.  Our digital service platform — Dr. Reddy’s XCEED — has helped our customers manage their business interactions with us in real time —from ordering samples to submit and track their orders, as well as closely interacting with Dr. Reddy’s interdisciplinary support team and much more. We started on this journey approximately 2.5 years ago, and we were one of the first companies in the industry to establish an interactive service portal. During the pandemic, customers have ramped up their engagement with the platform like never before. While it is an easy-to-use platform, every new tool requires some effort to drive adoption. However, the human element is not lost with this technological advancement. Help is at the touch of a button if customers wish to speak to a customer service representative.

Following the progress of the order is one of the key features of the platform, making it possible to directly interface with our manufacturing sites. This dynamic platform comes with a versatile user interface and offers an array of product-related information to choose from such as CoAs, DMFs, etc. International data and privacy laws are diligently followed, giving our customers additional confidence as they navigate the interface. Today out of more than 1000 users, 430 active customers across more than 60 countries are connected with us through XCEED.

The platform not only increases the operational efficiency of our customers but also gives them a higher confidence level in our services and our ability to deliver on-time and in-full, whether it is a sample, a document, or the commercial supply. For the first time, our internal processes are completely digitalized. We can track our performance at every step in the process while, at the same time we are significantly cutting the number of layers within the process that could increase lead times. We want to delight our customers with the best service experience possible. What does this mean? In the past, a customer who wanted to order a sample usually reached out to the account manager or the customer service representative. They, in turn, had to reach out to the different colleagues within Dr. Reddy’s. In XCEED, all customer requests are going directly to the right person while keeping everyone involved in the loop.

Building digital engagement is a continuous journey. In addition to the user benefit, the platform also provides us with insights on how to further improve our services and we will continue to invest into it.

The way forward

The future will bring more change and the pharma industry needs to be ready to help shape it.  We all saw how the COVID-19 pandemic accelerated how companies embrace digitalization, and it will be critical for companies like Dr. Reddy’s to keep improving efficiency, agility and speed in the way we work. Digitalization is going to be a vital part of our core strategy and it is something we are taking up in a big way to further accelerate patient centric product innovation, while increasing operational excellence. It is our aspiration to become a leading digital pharma company by introducing an integrated and robust way of digitalization from concept to market.

The pharma industry will also need to respond to the challenges of today and tomorrow with a sharpened business-continuity plan. Constantly monitoring the situation, potential issues and anticipating and addressing their short-term and long-term impacts will help us continuously accelerate the access to affordable medicines – wherever they are produced.