Drivers and Patterns of Supply Chain Collaboration in the Pharmaceutical Industry: A Case Study on SMEs in China


The objectives of this paper are to identify the supply chain collaboration models/patterns and its correspondent advantages on pharmaceutical supply chain. This paper aims to investigate how collaborative activities can impact on the development of supply chain and industry. A case study methodology was adopted in this research, which involved pharmaceutical SMEs. The results indicate that collaborations are common in all phases of pharmaceutical supply chain; the different strength of barging power among collaborative partners will impact the advantages achieved at strategic, operational and political levels.

Share and Cite:

Huang, L. , Lin, Y. , Ieromonachou, P. , Zhou, L. and Luo, J. (2015) Drivers and Patterns of Supply Chain Collaboration in the Pharmaceutical Industry: A Case Study on SMEs in China. Open Journal of Social Sciences, 3, 23-29. doi: 10.4236/jss.2015.37004.

Conflicts of Interest

The authors declare no conflicts of interest.


[1] Cao, M. and Zhang, Q. (2011) Supply Chain Collaboration: Impact on Collaborative Advantage and Firm Performance. Journal of Operation Management, 29, 163-180.
[2] Liao, S.-H. and Kuo, F.-K. (2014) The Study of Relationships between the Collaboration for Supply Chain, Supply Chain Capabilities and Firm Performance: A Case of the Taiwan’s TFT-LCD Industry. International Journal of Production Economics, 156, 295-304.
[3] Kafouros, M., Wang, C., Piperopoulos, P. and Zhang, M. (2015) Academic Collaborations and Firm Innovation Performance in China: The Role of Region-Specific Institutions. Research Policy, 44, 803-817.
[4] Montoya-Torres, J.R. and Ortiz-Vargas, D.A. (2014) Collaboration and Information Sharing in Dyadic Supply Chain: A Literature Review over the Period 2000-2012. Estudios Gerenciales, 30, 343-354.
[5] Ramanathan, U. (2014) Performance of Supply Chain Collaboration—A Simulation Study. Expert Systems with Applications, 41, 210-220.
[6] Shah, N. (2004) Pharmaceutical Supply Chains: Key Issues and Strategies for Optimization. Computers and Chemical Engineering, 28, 929-941.
[7] Forster, S.P., Stegmaier, J., Spyher, R. and Seeger, S. (2014) Virtual Pharmaceutical Companies: Collaborating Flexibly in Pharmaceutical Development. Drug Discovery Today, 19, 348-355.
[8] Laínez, J.M., Schaefer, E. and Reklaitis, G.V. (2012) Challenges and Opportunities in Enterprise-Wide Optimization in the Pharmaceutical Industry. Computers and Chemical Engineering, 47, 19-28.
[9] Rees, H. (2011) Supply Chain Management in the Drug Industry. John Wiley & Sons, Inc.
[10] Koh, R., Schuster, E.W., Chackrabarti, I. and Bellman, A. (2003) White Paper: Securing the Pharmaceutical Supply Chain. Auto-ID Centre, Mit-AutoID-WH-21.
[11] Yu, X., Li, C., Shi, Y. and Yu, M. (2010) Pharmaceutical Supply Chain in China: Current Issues and Implications for Health System Reform. Health Policy, 97, 8-15.
[12] The State Council of the People’s Republic of China (2012) The Twelfth 5-Year Healthcare Development Plan of China.
[13] Yu, Y., Ma, Z., Hu, H. and Wang, Y. (2013) Local Government Policies and Pharmaceutical clusters in China. Journal of Science and Technology Policy Management, 5, 41-58.
[14] Huang, S. (2012) How Can Innovation Create the Future in a Catching-Up Economy? Focusing on China’s Pharmaceutical Industry. Journal of Knowledge-Based Innovation in China, 4, 118-131.
[15] PricewaterhouseCoopers (2007) Pharma 2020: The Vision Which Path Will You Take? Pharmaceutical and Life Sciences.
[16] Meng, Q., Cheng, G., Silver, L., Sun, X., Rehnberg, C. and Tomason, G. (2005) The Impact of China’s Retail Drug Price Control Policy on Hospital Expenditures: A Case Study in Two Shandong Hospitals. Health Policy and Planning, 20, 185-196.
[17] Zhang, M., Pawar, K.S., Shah, J. and Mehta, P. (2012) Evaluating Outsourcing Partners’ Capability: A Case Study from the Pharmaceutical Supply Chain. Journal of Manufacturing Technology Management, 24, 1080-1101.
[18] Abudul-Halim, H., Ahmad, N.H. and Ramayah, T. (2015) Unveiling the Motivation to Outsource among SMEs. Business Strategy Series, 13, 181-186.
[19] Bales, R.R., Maull, R.S. and Radnor, Z. (2004) The Development of Supply Chain Management within the Aerospace Manufacture. Supply Chain Management: An International Journal, 9, 250-255.
[20] Pedroso, M.C. and Nakano, D. (2009) Knowledge and Information Flows in Supply Chains: A Study on Pharmaceutical Companies. International Journal of Production Economics, 122, 376-384.
[21] Narayana, S.A., Pati, R.K. and Vrat, P. (2014) Managerial Research on the Pharmaceutical Supply Chain—A Critical Review and Some Insights for Future Directions. Journal of Purchasing and Supply Management, 20, 18-40.
[22] Scherre-Rathje, M., Deflorin, P. and Anand, G. (2014) Manufacturing Flexibility through Outsourcing: Effects of Contingencies. International Journal of Operations and Production Management, 34, 1210-1242.
[23] Boulaksil, Y. and Fransoo, J.C. (2010) Implications of Outsourcing on Operations Planning: findings from the pharmaceutical industry. International Journal of Operations and Production Management, 30, 1059-1079.
[24] Sousa, R.T., Shah, N. and Papageorgiou, L.G. (2005) Global Supply Chain Network Optimisation for Pharmaceuticals. Computer Aided Chemical Engineering, 20, 1189-1194. doi:10.1016/S1570-7946(05)80040-9
[25] Scarlett, J.A. (1996) Outsourcing Process-Development and Manufacturing of rDNA-Derived Products. Trends in Biotechnology, 14, 239-244.
[26] Agarwal (2012) Chemistry and Integrated Services in Emerging Countries: How Is the Pharmaceutical Value Chain Changing with Companies Demanding Chemistry and a Provider in Emerging Countries and What Are Suppliers Doing to Upgrade the Offerings and Mitigate the Business Risk? Drug Discovery Today, 17, 1251-1253.
[27] Zhou, E.Y. (2007) China Today—Pharmaceutical Distribution in China: The Country Strive to Modernize Its Distribution Logistics as Thousands of Small Companies Compete for Profits. Biopharm International, 20, 8-24.
[28] Azzi, A., Persona, A., Sgarbossa, F. and Bonin, M. (2013) Drug Inventory Management and Distribution: Outsourcing Logistics to Third-Party Providers. Strategic Outsourcing: An International Journal, 6, 48-64.
[29] Lim, K. (2004) The Relationship between Research and Innovation in the Semiconductor and Pharmaceutical Industries (1981-1997). Research Policy, 33, 287-321.
[30] Takayama, M., Watanabe, C. and Griffy-Brown, C. (2002) Alliance Strategy as a Competitive Strategy for Successively Creative New Product Development: The Proof of the Co-Evolution of Creativity and Efficiency in the Japanese Pharmaceutical Industry. Technovation, 22, 607-614.
[31] PricewaterhouseCoopers (2012) Ensuring Pharmaceutical Supply Chain Effectiveness. Pharmaceutical and Life Sciences.
[32] Spithoven, A. and Teirlinck, P. (2015) Internal Capabilities, Network Resources and Appropriation Mechanisms as Determinants of R & D Outsourcing. Research Policy, 44, 711-725.
[33] Baloh, P., Jha, S. and Awazu, Y. (2008) Building Strategic Partnerships for Managing Innovation Outsourcing. Strategic Outsourcing: An International Journal, 1, 100-121.
[34] Sahay, B.S. (2003) Supply Chain Collaboration: The Key Value Creation. Work Study, 52, 76-83.
[35] Hira, A. (2009) The Political Economy of the Global Pharma-ceutical Industry: Why the Poor Lack Access to Medicine and What Might Be Done about It. International Journal of Development Issues, 8, 84-101.
[36] Conle, M. and Taube, M. (2010) Regional Specialization in China’s Biopharmaceutical Industry. Chinese Management Studies, 4, 339-359.
[37] Lau, K.H. and Zhang, J. (2006) Drivers and Obstacles of Out-sourcing Practices in China. International Journal of Physical Distribution and Logistics Management, 36, 776-792.
[38] Gr??ler, A., Laugen, B.T., Arkader, R. and Fleury, A. (2013) Differences in Outsourcing Strategies between Firms in Emerging and Developed Markets. International Journal of Operation and Production Management, 33, 296-321.
[39] Elango, B. (2008) Using Outsourcing for Strategic Competitiveness in Small and Medium-sized Firms. Competitiveness Review: An International Business Journal, 18, 322-332.
[40] Rapp, A. (2009) Outsourcing the Sales Process: Hiring a Merce-nary Sales Force. Industrial Marketing Management, 38, 411-418.
[41] Whitworth, M. (2005) Outsourced Security—The Benefits and Risks. Network Security, 2005, 16-19.
[42] Yin, R.K. (2012) Applications of Case Study Research. 3rd Edition, SAGA Publication, Inc.
[43] Yin, R.K. (2014) Case Study Research: Design and Methods. 5th Edition, SAGA Publications, Inc.
[44] Herriott, R.E. and Firestone, W.A. (1983) Multisite Qualitative Research: Optimizing Description and Generalizability. Education Researcher, 12, 14-19.
[45] Chung, H.F.L., Yang, Z. and Huang, P. (2015) How Does Organizational Learning Matter in Strategic Business Performance? The Contingency Role of Guangxi Networking. Journal of Business Research, 68, 1216-1224.

Copyright © 2023 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.