I was speaking to the India office of one of the largest global logistics company last week to understand their presence in the life sciences/ pharma vertical which got me thinking about two particular opportunity areas:
1. Fully integrated third party logistics company
Many of the pharma companies that I spoke to so far mentioned that the lack of a fully integrated 3PL player was a challenge. The presence of such a company might not only enable in faster product launches but also create an ecosystem where smaller firms without deep competencies in sales & marketing might be encouraged to launch brands.
Agreed that many companies are actually banking on their distributor/ stockist base as a competitive advantage but this is not sustainable. With GST (Goods & Services Tax) going to be rolled out sometime soon leading to these layers consolidating, there will be a (theoretical) surplus of these distributors. None of the current players (distributors & stockists) are thinking that far ahead to align themselves with the market trends.
The company that I spoke to mentioned that unless there is an import/ export component to the distribution it doesn’t take on customers which is probably the reason why their major customers in the life sciences area are MNCs.
I personally think there is a great opportunity for a 3PL player in this industry. Thoughts anyone?
2. PPP for Public Sector Distribution
Since the large companies, including their last mile connectivity partners, have a widely established network of warehouses, transportation facilities in most of the states, there is an opportunity to have a play in the public sector distribution of medicines/ other medical consumables as well.
The PPP could be either be a full operating arrangement or even be structured as a Build-Operate-Transfer probably for 5 years which will not only lead to process streamlining and capacity building. While the obvious criticism to such an idea might be prohibitive costs for the government to engage with the logistics companies but if you throw in process improvement and capacity building into the pool, there is definitely a case for it. Thoughts anyone?
Of This & That 