Skip to main content

OR Applications in Pharmaceutical Supply Chain Management

  • Chapter
  • First Online:
Operations Research Applications in Health Care Management

Part of the book series: International Series in Operations Research & Management Science ((ISOR,volume 262))

Abstract

Sustainable development of a nation greatly depends on the health of individuals. The emergence of the diseases caused by unhealthy lifestyle as well as the growth and aging of the population have faced the pharmaceutical industry with an increasing demand for drugs and the related products over time. This increase in demand has made the pharmaceutical industry as an important and large industry which constitutes a considerable portion of the healthcare expenditures. This sector is grappling with many challenges and inefficiencies in research and development activities, introducing new products, procurement, manufacturing, storage, and distribution affairs. Such issues have resulted in the inability of pharmaceutical companies to satisfy market demand in an efficient while effective manner. These problems alongside the dynamic and complex nature of a pharmaceutical supply chain (PSC) necessitate the employment of efficient optimization techniques to provide these companies with informed decision making by relying on available data. Hence, this chapter aims to identify the prevalent challenges of PSCs at three different decision levels, i.e., long-term (strategic), mid-term (tactical), and short-term (operational) decisions; as well as presenting various ways to deal with such problems. Accordingly, first, the characteristics of a PSC are presented and discussed. In order to provide a tangible perspective for application of Operations Research in PSC, an exhaustive mathematical programming model is presented. Then, a real practical case study is described and investigated and a number of avenues for further research are finally suggested.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Institutional subscriptions

References

  • Amaro A, Barbosa-Póvoa APF (2008) Planning and scheduling of industrial supply chains with reverse flows: a real pharmaceutical case study. Comput Chem Eng 32(11):2606–2625

    Article  Google Scholar 

  • Antonijevic Z (2014) Optimization of pharmaceutical R&D programs and portfolios. Springer International Publishing, Cham

    Google Scholar 

  • Bassett MH, Pekny JF, Reklaitis GV (1996) Decomposition techniques for the solution of large-scale scheduling problems. AICHE J 42(12):3373–3387

    Article  Google Scholar 

  • Birewar DB, Grossmann IE (1989) Incorporating scheduling in the optimal design of multiproduct batch plants. Comput Chem Eng 13(1):141–161

    Article  Google Scholar 

  • Blau GE, Pekny JF, Varma VA, Bunch PR (2004) Managing a portfolio of interdependent new product candidates in the pharmaceutical industry. J Prod Innov Manag 21(4):227–245

    Article  Google Scholar 

  • Blomer F, Gunther H-O (2000) LP-based heuristics for scheduling chemical batch processes. Int J Prod Res 38(5):1029–1051

    Article  Google Scholar 

  • Blömer F, Günther H-O (1998) Scheduling of a multi-product batch process in the chemical industry. Comput Ind 36(3):245–259

    Article  Google Scholar 

  • Bok J-K, Grossmann IE, Park S (2000) Supply chain optimization in continuous flexible process networks. Ind Eng Chem Res 39(5):1279–1290

    Article  Google Scholar 

  • Bowman EH (1959) The schedule-sequencing problem. Oper Res 7(5):621–624

    Article  Google Scholar 

  • Burns L (2002a) The health care value chain: producers, purchasers, and providers. Jossey-Bass, Wharton School Colleagues, San Francisco

    Google Scholar 

  • Burns L (2002b) The health care value chain: producers, purchasers, and providers. Jossey-Bass, San Francisco

    Google Scholar 

  • Caillet T (2015) SCM in a pharmaceutical company. In: Supply chain management and advanced planning. Springer, Heidelberg, pp 459–474

    Google Scholar 

  • Chiou C-C (2008) Transshipment problems in supply chainsystems: review and extensions. INTECH Open Access Publisher, Shanghai

    Google Scholar 

  • Colvin M, Maravelias CT (2008) A stochastic programming approach for clinical trial planning in new drug development. Comput Chem Eng 32(11):2626–2642

    Article  Google Scholar 

  • Colvin M, Maravelias CT (2010) Modeling methods and a branch and cut algorithm for pharmaceutical clinical trial planning using stochastic programming. Eur J Oper Res 203(1):205–215

    Article  Google Scholar 

  • Dimitriadis A, Shah N, Pantelides C (1997) RTN-based rolling horizon algorithms for medium term scheduling of multipurpose plants. Comput Chem Eng 21:S1061–S1066

    Article  Google Scholar 

  • Dubois D, Fargier H, Fortemps P (2003) Fuzzy scheduling: modelling flexible constraints vs. coping with incomplete knowledge. Eur J Oper Res 147(2):231–252

    Article  Google Scholar 

  • Eilon S (1957) Scheduling for batch production. Prod Eng J Inst 36(9):549–570

    Article  Google Scholar 

  • Gatica G, Papageorgiou L, Shah N (2003) Capacity planning under uncertainty for the pharmaceutical industry. Chem Eng Res Des 81(6):665–678

    Article  Google Scholar 

  • Gatica G, Shah N, Papageorgiou LG (2001) Capacity planning under clinical trials uncertainty for the pharmaceutical industry. Comput Aided Chem Eng 9:865–870

    Article  Google Scholar 

  • Geletu A, Li P (2014) Recent developments in computational approaches to optimization under uncertainty and application in process systems engineering. Chem Bio Eng Rev 1(4):170–190

    Google Scholar 

  • Grossmann IE, Quesada I, Raman R, Voudouris VT (1996) Mixed-integer optimization techniques for the design and scheduling of batch processes. Batch processing systems engineering. Springer, pp 451–494

    Google Scholar 

  • Grunow M, Günther H-O, Yang G (2003) Plant co-ordination in pharmaceutics supply networks. OR Spectr 25(1):109–141

    Article  Google Scholar 

  • Gupta A, Maranas CD (1999) A hierarchical Lagrangean relaxation procedure for solving midterm planning problems. Ind Eng Chem Res 38(5):1937–1947

    Article  Google Scholar 

  • Hansen KRN, Grunow M (2015) Planning operations before market launch for balancing time-to-market and risks in pharmaceutical supply chains. Int J Prod Econ 161:129–139

    Article  Google Scholar 

  • Iyer RR, Grossmann IE (1998) A bilevel decomposition algorithm for long-range planning of process networks. Ind Eng Chem Res 37(2):474–481

    Article  Google Scholar 

  • Jou C (2005) A genetic algorithm with sub-indexed partitioning genes and its application to production scheduling of parallel machines. Comput Ind Eng 48(1):39–54

    Article  Google Scholar 

  • Kannan G, Sasikumar P, Devika K (2010) A genetic algorithm approach for solving a closed loop supply chain model: a case of battery recycling. Appl Math Model 34(3):655–670

    Article  Google Scholar 

  • Karaesmen IZ, Scheller-Wolf A, Deniz B (2011) Managing perishable and aging inventories: review and future research directions. In: Planning production and inventories in the extended enterprise. Springer, New York, pp 393–436

    Chapter  Google Scholar 

  • Kelle P, Woosley J, Schneider H (2012) Pharmaceutical supply chain specifics and inventory solutions for a hospital case. Oper Res Health Care 1(2):54–63

    Article  Google Scholar 

  • Kondili E, Pantelides C, Sargent R (1993) A general algorithm for short-term scheduling of batch operations—I. MILP formulation. Comput Chem Eng 17(2):211–227

    Article  Google Scholar 

  • Krikke H, van Harten A, Schuur P (1999) Business case Oce: reverse logistic network re-design for copiers. OR-Spektrum 21(3):381–409

    Article  Google Scholar 

  • Ku HM, Karimi I (1991) An evaluation of simulated annealing for batch process scheduling. Ind Eng Chem Res 30(1):163–169

    Article  Google Scholar 

  • Laínez JM, Schaefer E, Reklaitis GV (2012) Challenges and opportunities in enterprise-wide optimization in the pharmaceutical industry. Comput Chem Eng 47:19–28

    Article  Google Scholar 

  • Levis AA, Papageorgiou LG (2004) A hierarchical solution approach for multi-site capacity planning under uncertainty in the pharmaceutical industry. Comput Chem Eng 28(5):707–725

    Article  Google Scholar 

  • Maravelias CT, Sung C (2009) Integration of production planning and scheduling: overview, challenges and opportunities. Comput Chem Eng 33(12):1919–1930

    Article  Google Scholar 

  • Masoumi AH, Yu M, Nagurney A (2012) A supply chain generalized network oligopoly model for pharmaceuticals under brand differentiation and perishability. Trans Res E: Logist Transp Rev 48(4):762–780

    Article  Google Scholar 

  • Mauderli A, Rippin D (1979) Production planning and scheduling for multi-purpose batch chemical plants. Comput Chem Eng 3(1):199–206

    Article  Google Scholar 

  • Méndez CA, Cerdá J, Grossmann IE, Harjunkoski I, Fahl M (2006) State-of-the-art review of optimization methods for short-term scheduling of batch processes. Comput Chem Eng 30(6):913–946

    Article  Google Scholar 

  • Mousazadeh M, Torabi S, Zahiri B (2015) A robust possibilistic programming approach for pharmaceutical supply chain network design. Comput Chem Eng 82:115–128

    Article  Google Scholar 

  • Mousazadeh M, Torabi SA, Pishvaee MS (2014) Green and reverse logistics management under fuzziness. In: Supply chain management under fuzziness. Springer, Heidelberg, pp 607–637

    Chapter  Google Scholar 

  • Mula J, Poler R, Garcia J (2006) MRP with flexible constraints: a fuzzy mathematical programming approach. Fuzzy Sets Syst 157(1):74–97

    Article  Google Scholar 

  • Narayana SA, Pati RK, Vrat P (2012) Research on management issues in the pharmaceutical industry: a literature review. Int J Pharm Healthc Mark 6(4):351–375

    Article  Google Scholar 

  • Naresh S (2012) Planning and scheduling in pharmaceutical supply chains. Engineering Department of Chemical and Biomolecular Engineering. National University of Singapore

    Google Scholar 

  • Oh H-C, Karimi I (2004) Regulatory factors and capacity-expansion planning in global chemical supply chains. Ind Eng Chem Res 43(13):3364–3380

    Article  Google Scholar 

  • Oh HC, Karimi I (2006) Global multiproduct production–distribution planning with duty drawbacks. AICHE J 52(2):595–610

    Article  Google Scholar 

  • Orcun S, Altinel I, Hortaçsu Ö (2001) General continuous time models for production planning and scheduling of batch processing plants: mixed integer linear program formulations and computational issues. Comput Chem Eng 25(2):371–389

    Article  Google Scholar 

  • Papageorgiou LG (2009) Supply chain optimisation for the process industries: advances and opportunities. Comput Chem Eng 33(12):1931–1938

    Article  Google Scholar 

  • Papageorgiou LG, Pantelides CC (1996) Optimal campaign planning/scheduling of multipurpose batch/semicontinuous plants. 1. Mathematical formulation. Ind Eng Chem Res 35(2):488–509

    Article  Google Scholar 

  • Papageorgiou LG, Rotstein GE, Shah N (2001) Strategic supply chain optimization for the pharmaceutical industries. Ind Eng Chem Res 40(1):275–286

    Article  Google Scholar 

  • Pinto JM, Grossmann IE (1995) A continuous time mixed integer linear programming model for short term scheduling of multistage batch plants. Ind Eng Chem Res 34(9):3037–3051

    Article  Google Scholar 

  • Pishvaee M, Razmi J, Torabi SA (2012) Robust possibilistic programming for socially responsible supply chain network design: a new approach. Fuzzy Sets Syst 206:1–20

    Article  Google Scholar 

  • Pishvaee MS, Khalaf MF (2016) Novel robust fuzzy mathematical programming methods. Appl Math Model 40(1):407–418

    Article  Google Scholar 

  • Pritsker AAB, Waiters LJ, Wolfe PM (1969) Multiproject scheduling with limited resources: a zero-one programming approach. Manag Sci 16(1):93–108

    Article  Google Scholar 

  • Quariguasi Frota Neto J, Walther G, Bloemhof J, Van Nunen J, Spengler T (2010) From closed-loop to sustainable supply chains: the WEEE case. Int J Prod Res 48(15):4463–4481

    Article  Google Scholar 

  • Rogers MJ, Gupta A, Maranas CD (2002) Real options based analysis of optimal pharmaceutical research and development portfolios. Ind Eng Chem Res 41(25):6607–6620

    Article  Google Scholar 

  • Rotstein G, Papageorgiou L, Shah N, Murphy D, Mustafa R (1999) A product portfolio approach in the pharmaceutical industry. Comput Chem Eng 23:S883–S886

    Article  Google Scholar 

  • Sahinidis NV (2004) Optimization under uncertainty: state-of-the-art and opportunities. Comput Chem Eng 28(6):971–983

    Article  Google Scholar 

  • Saur-Amaral I, Borges Gouveia JJ (2007) Uncertainty in drug development: insights from a Portuguese firm. Int J Technol Intell Plan 3(4):355–375

    Article  Google Scholar 

  • Schaber SD, Gerogiorgis DI, Ramachandran R, Evans JM, Barton PI, Trout BL (2011) Economic analysis of integrated continuous and batch pharmaceutical manufacturing: a case study. Ind Eng Chem Res 50(17):10083–10092

    Article  Google Scholar 

  • Schultmann F, Zumkeller M, Rentz O (2006) Modeling reverse logistic tasks within closed-loop supply chains: an example from the automotive industry. Eur J Oper Res 171(3):1033–1050

    Article  Google Scholar 

  • Shah N (2004) Pharmaceutical supply chains: key issues and strategies for optimisation. Comput Chem Eng 28(6):929–941

    Article  Google Scholar 

  • Shah N, Pantelides C, Sargent R (1993) A general algorithm for short-term scheduling of batch operations—II. Computational issues. Comput Chem Eng 17(2):229–244

    Article  Google Scholar 

  • Shah N, Pantelides CC (1991) Optimal long-term campaign planning and design of batch operations. Ind Eng Chem Res 30(10):2308–2321

    Article  Google Scholar 

  • Shelokar P, Jayaraman VK, Kulkarni BD (2004) An ant colony classifier system: application to some process engineering problems. Comput Chem Eng 28(9):1577–1584

    Article  Google Scholar 

  • Shih L-H (2001) Reverse logistics system planning for recycling electrical appliances and computers in Taiwan. Resour Conserv Recycl 32(1):55–72

    Article  Google Scholar 

  • Sousa RT, Liu S, Papageorgiou LG, Shah N (2011) Global supply chain planning for pharmaceuticals. Chem Eng Res Des 89(11):2396–2409

    Article  Google Scholar 

  • Sousa RT, Shah N, Papageorgiou LG (2005) Global supply chain network optimisation for pharmaceuticals. Comput Aided Chem Eng 20:1189–1194

    Article  Google Scholar 

  • Sundaramoorthy A, Evans JM, Barton PI (2012a) Capacity planning under clinical trials uncertainty in continuous pharmaceutical manufacturing, 1: mathematical framework. Ind Eng Chem Res 51(42):13692–13702

    Article  Google Scholar 

  • Sundaramoorthy A, Karimi I (2004) Planning in pharmaceutical supply chains with outsourcing and new product introductions. Ind Eng Chem Res 43(26):8293–8306

    Article  Google Scholar 

  • Sundaramoorthy A, Li X, Evans JM, Barton PI (2012b) Capacity planning under clinical trials uncertainty in continuous pharmaceutical manufacturing, 2: solution method. Ind Eng Chem Res 51(42):13703–13711

    Article  Google Scholar 

  • Susarla N, Karimi IA (2012) Integrated supply chain planning for multinational pharmaceutical enterprises. Comput Chem Eng 42:168–177

    Article  Google Scholar 

  • Tollman P, Morieux Y, Murphy J, Schulze U (2011) Can R&D be fixed? Lessons from biopharma outliers. The Boston Consulting Group, Boston

    Google Scholar 

  • Torabi SA, Hassini E (2008) An interactive possibilistic programming approach for multiple objective supply chain master planning. Fuzzy Sets Syst 159(2):193–214

    Article  Google Scholar 

  • Traple MAL, Saviano AM, Francisco FL, Lourenço FR (2014) Measurement uncertainty in pharmaceutical analysis and its application. J Pharmaceut Anal 4(1):1–5

    Google Scholar 

  • Tsang K, Samsatli N, Shah N (2007) Capacity investment planning for multiple vaccines under uncertainty: 1: capacity planning. Food Bioprod Process 85(2):120–128

    Article  Google Scholar 

  • Ãœster H, Easwaran G, Akçali E, Cetinkaya S (2007) Benders decomposition with alternative multiple cuts for a multi-product closed-loop supply chain network design model. Naval Res Logist (NRL) 54(8):890–907

    Article  Google Scholar 

  • Uthayakumar R, Priyan S (2013) Pharmaceutical supply chain and inventory management strategies: Optimization for a pharmaceutical company and a hospital. Oper Res Health Care 2(3):52–64

    Article  Google Scholar 

  • Varma VA, Pekny JF, Blau GE, Reklaitis GV (2008) A framework for addressing stochastic and combinatorial aspects of scheduling and resource allocation in pharmaceutical R&D pipelines. Comput Chem Eng 32(4):1000–1015

    Article  Google Scholar 

  • Vila-Parrish AR, Ivy JS, King RE, Abel SR (2012) Patient-based pharmaceutical inventory management: a two-stage inventory and production model for perishable products with Markovian demand. Health Syst 1(1):69–83

    Article  Google Scholar 

  • Wellons MC, Reklaitis GV (1991) Scheduling of multipurpose batch chemical plants. 2. Multiple-product campaign formation and production planning. Ind Eng Chem Res 30(4):688–705

    Article  Google Scholar 

  • Wilkinson S, Shah N, Pantelides C (1995) Aggregate modelling of multipurpose plant operation. Comput Chem Eng 19:583–588

    Article  Google Scholar 

  • Yi G, Reklaitis GV (2007) Optimal design of batch-storage network considering exchange rates and taxes. AICHE J 53(5):1211–1231

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to S. Ali Torabi .

Editor information

Editors and Affiliations

Rights and permissions

Reprints and permissions

Copyright information

© 2018 Springer International Publishing AG

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Ahmadi, A., Mousazadeh, M., Torabi, S.A., Pishvaee, M.S. (2018). OR Applications in Pharmaceutical Supply Chain Management. In: Kahraman, C., Topcu, Y. (eds) Operations Research Applications in Health Care Management. International Series in Operations Research & Management Science, vol 262. Springer, Cham. https://doi.org/10.1007/978-3-319-65455-3_18

Download citation

Publish with us

Policies and ethics