Medicine shortages often experienced in the region can be overcome by employing third party logistics providers, according to an expert.

Maher Kheder, business development director of Pharma World Holdings, blamed such shortages on international manufacturers relying too heavily on ill-equipped local distributors.

He said the region's lack of logistic capabilities continue to stifle manufacturer access - ultimately leaving consumers in the lurch.

Kheder said local distributors do not have the tools, training, financial backbone or updated software infrastructure to handle ever-increasing logistics requirements.

"A portion of the forecasting responsibility needs to be given to the manufacturers, who often don't fully look into local distributor capabilities. Supply forecasting should be shared, decided and agreed upon by both parties."

Kheder said that distributors work on a consignment basis that means placing larger orders involves larger financial outlay. Many smaller distributors do not incorporate sufficiently sophisticated financial departments to handle increasing demand, and therefore place small orders or let stocks run dry before placing new orders.

Additionally, small and medium sized distributors do not house dedicated financial specialists to analyse the economics of a region, and thereby more accurately forecast – even if they do have the floating funds to secure larger orders.

"Out-of-date IT infrastructure is another major logistic hindrance. Latest ERP [enterprise resource planning] support systems maintain a combined database including a variety of business functions such as manufacturing, supply chain management, financials and customer relationship management."

This means that all aspects of the logistics process can be constantly monitored by multiple parties, from multiple locations, at-a-glance. Many local distributors do not have the capital to invest in latest technology, and if they do, these systems are often not used to their optimum.

Third party logistics providers like Pharma World Holdings, although prevalent abroad, are new to the Middle East.

Third Party Logistics providers work between manufacturers and distributors allowing for more effective and efficient forward and reverse flow and storage of goods, services, and related information - between point of origin and the point of consumption - to better meet customers’ requirements.

"Our elaborate in-house financial department incorporates analysts who look at and combine local market information to better forecast supply. In the case of medicine shortages, comprehensive networks across the Middle East mean that products are replenished within 24-48 hours – depending on the urgency."

Advanced IT infrastructure allows the ability to identify looming shortages before they happen to ensure continuous supply that satisfies increasing demand.

The best results are achieved when manufacturers focus on their areas of expertise, including production, development, quality assurance and quality control, and distributors focus on their key areas including collection, sales and marketing.

"Third Party Logistics has the ability to further open up the Middle East market to international manufacturers by easing processes and ensuring supply continually fits snugly with demand."

Pharma World Holdings, a joint venture formed by the UAE-based Ithmar Capital, Fund I and Banaja International Group, is currently establishing warehousing facilities at Jafza in the UAE. -TradeArabia News Service