The Strategic Imperative of Supplier Risk Management for Biopharmaceuticals

By Jeremy Friedler Ashutosh Pandit Gordon Pugh John Bratz

Biopharma’s Changing Supply Chain Risk Environment

In recent years, the biopharmaceutical industry has faced an increasingly complex and volatile supply chain risk landscape. The lasting effects of the COVID-19 pandemic, escalating geopolitical tensions, macroeconomic instability, and rapidly evolving regulatory requirements have reshaped risk management approaches. The pandemic exposed vulnerabilities in global supply networks that disrupted supply continuity, delayed product development, and raised concerns over drug shortages. These, in turn, prompted regulatory interventions such as the CARES Act to bolster industry preparedness.

Additionally, legislative measures, including the BIOSECURE Act and newly imposed tariffs on trading partner regions, underscore the urgency for a comprehensive and proactive approach to supply chain risk management that extends beyond conventional metrics.

To navigate this evolving supply chain risk environment, companies must transition from reactive supplier risk management (SRM) to a data-driven, predictive risk management framework that enables real-time visibility into supplier vulnerabilities. This advanced approach is characterized by several key elements:

• Dynamic supplier risk assessments – Moving beyond static, retrospective evaluations to continuously track and analyze supplier risks in real-time.
• Expanded supplier risk considerations – Incorporating factors such as geopolitical instability, macroeconomic trends, financial health, business continuity, and evolving regulatory requirements to provide a comprehensive risk profile.
• Proactive disruption mitigation – Anticipating and addressing potential supply and supplier disruptions before they materialize, rather than reacting afterward.
• Continuous supplier risk monitoring – Replacing periodic, manual risk reviews with automated, real-time surveillance and monitoring to identify and mitigate emerging risks.
• Resilient supply chain strategies – Strengthening supplier partnerships and diversifying sourcing strategies to enhance operational stability and ensure uninterrupted product availability.

From Reactive to Predictive Supplier Risk Management: A Tectonic Shift

Companies can proactively identify vulnerabilities before they escalate into supply disruptions by expanding supplier risk assessments to encompass geopolitical exposure, macroeconomic trends, financial stability, and real-time supplier performance data. This forward-thinking approach enables organizations to secure alternative sourcing strategies, ensure regulatory compliance, and maintain uninterrupted supply continuity even amid market volatility.

Furthermore, organizations that integrate dynamic SRM into their supply chain strategy can unlock significant long-term competitive advantage. By embedding advanced analytics and real-time risk intelligence into SRM business processes, companies reduce costly production delays, foster stronger supplier collaboration, and reinforce trust with both regulators and patients. In today’s volatile environment, supply chain resilience is not just a competitive differentiator—it is a critical operational imperative.

How Top Biopharma Companies Rethink Supplier Risk

In several recent engagements, we collaborated with leading biopharma companies to transform their SRM assessments and business processes from a compliance-driven function into a strategic, value-creating capability.

In the short term, this transformation broadened supplier risk assessments beyond Tier 1 to include Tier 2 and Tier 3 partners. All levels of assessment incorporated critical risk factors such as financial stability, geopolitical exposure, sourcing dependencies, capacity, and regulatory compliance.

For long-term success, companies have also invested in scalable, integrated SRM business processes capable of adapting dynamically to emerging threats. We have found that embedding cross-functional risk training and fostering transparency with suppliers significantly strengthens resilience. Organizations that take these steps are better equipped to proactively manage disruptions as they arise.

5 Key Actions to Strengthen Supplier Risk Management

Amid ongoing geopolitical tensions, macroeconomic shifts, and regulatory pressures, traditional SRM practices are no longer sufficient. To stay ahead of disruptions and protect their operations, companies must prioritize the following:

• Conduct Immediate Supplier Risk Assessments. Perform comprehensive evaluations of critical Tier 1, Tier 2, and Tier 3 suppliers. Identify vulnerabilities linked to current geopolitical, macroeconomic, financial, and regulatory disruptions.
• Expand Supplier Risk Assessment Metrics. Move beyond traditional supplier quality and delivery metrics to include financial viability, geopolitical exposure, macroeconomic trends, sourcing dependencies, and business continuity planning.
• Leverage Advanced Supplier Risk Intelligence Tools. Deploy risk monitoring platforms or third-party analytics solutions to enable real-time tracking, predictive modeling, and automated alerts for emerging risks.
• Develop Scalable, Adaptive Supplier Risk Business Processes. Develop an enterprise-wide, cross-functional SRM process framework that continuously adapts to and monitors regulatory changes, geopolitical shifts, and market dynamics to ensure resilience and agility.
• Enhance Supplier Collaboration & Contingency Planning. Foster transparency and alignment with suppliers, develop structured business continuity and contingency plans, and diversify sourcing strategies to proactively mitigate disruptions.

By integrating a predictive, data-driven SRM approach into their supply chain strategy, companies can strengthen their operations against future disruptions, maintain regulatory and manufacturing continuity, and safeguard patient access.

Start strengthening your supplier risk management approach today by contacting us at info@convergeconsulting.com.