International Journal of Pharmaceutical and Healthcare Marketing

Developing a model for an agile supply chain in pharmaceutical industry

Gholamhossein Mehralian Forouzandeh Zarenezhad Ali Rajabzadeh Ghatari
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Gholamhossein Mehralian Forouzandeh Zarenezhad Ali Rajabzadeh Ghatari , (2015),"Developing a
model for an agile supply chain in pharmaceutical industry", International Journal of Pharmaceutical
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IJPHM
9,1
74
Received 12 September 2013
Revised 12 September 2013
Accepted 14 October 2013
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International Journal of
Pharmaceutical and Healthcare
Marketing
Vol. 9 No. 1, 2015
pp. 74-91
© Emerald Group Publishing Limited
1750-6123
DOI 10.1108/IJPHM-09-2013-0050
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1750-6123.htm
Developing a model for an agile
supply chain in pharmaceutical
industry
Gholamhossein Mehralian
Department of Pharmacoeconomics and Pharma Management,
School of Pharmacy, Shahid Beheshti University of Medical Sciences,
Tehran, Iran
Forouzandeh Zarenezhad
Institute of Management and Developing of Technology,
Tarbiat Modares University, Tehran, Iran, and
Ali Rajabzadeh Ghatari
Department of Management, Faculty of Management and Economic,
Tarbiat Modares University, Tehran, Iran
Abstract
Purpose – The purpose of this study is to develop a model for an agile supply chain in the pharmaceutical
industry. In a continuous changing global competitive environment, an organization’s supply chain agility
directly impacts its ability to produce and deliver novel products to its customers in a timely and
cost-effective manner. While the beneficial effect of supply chain agility is generally appreciated, the
literature addressing how a pharmaceutical company can achieve supply chain agility is limited.
Design/methodology/approach – This paper analyzes the three parts of pharmaceutical supply
chain including supply of active pharmaceutical ingredient, manufacturing and distribution based on
the supply chain operations reference model to assess agile supply chains by using three diverse
questionnaires. In addition, to prioritize critical factors, TOPSIS (technique for order preference by
similarity to ideal solution) algorithm as a common technique of multiple attribute decision-making
(MADM) model has been used.
Findings – Achieving supply chain agility is dependent on other capabilities; including flexibility,
responsibility, competency and quickness. Findings reveal several factors identified as critical factors
to being agile in each part of pharmaceutical supply chain.
Research limitations/implications – This research was challenged with some limitations such as
novelty of the subject in this environment, and the lake of data in this area is also another constraint.
Originality/value – This is an initial and pioneering study to highlight the importance of agility
concept in the pharmaceutical industry. The present study also provides a new aspect of supply chain
management for such industry, and would be a good topic for further research. Finally, this study
contributes to highlight and prioritize factors involved in this area.
Keywords Agility, Supply chain management, Pharmaceutical supply chain
Paper type Research paper
The authors would like to thank Daroupkhsh Holding Company, Alborz Investment Company,
Shafa Investment Company and Pars Darou holding company for providing their support in
conducting this study.
 1. Introduction Model for an
In today’s extremely competition-oriented universal market, productive supply chain agile supply
management (SCM) plays a crucial role and is accepted as a key factor for organizational chain
competitive advantage (Schneller and Smeltzer, 2006; White and Mohdzain, 2009). Over
the last two decades, globalization has resulted in a highly competitive business
environment. The turbulent market condition in the twenty-first century has increased
the need for more competitive enterprise strategies (Mehralian et al., 2013). Speed, 75
quality, flexibility and responsiveness, which are the key elements of agile capabilities,
are necessary for meeting the unique needs of customers and markets. Companies enjoy
such agile characteristics by forecasting uncertainties and allowing quick changes to
respond to the requirements greatly in their business (Jackson and Johansson, 2003;
Baramichai et al., 2007).
Today’s business situation is characterized by an upward level of unpredictability. In
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this unstable market, firms face an aggressive competitive environment due to

globalization, technological changes, shorter lifecycles of goods, diminished margins,
economic downsized markets and more informed and well-informed customers with
unique and quickly changing needs (Shabaninejad et al., 2014a; Mehralian et al., 2012b).
The focus of supply chain has changed from production efficiency to customer-driven
and collaboration synchronization approaches, which need a high degree of cooperation
among all supply chain partners (Lou et al., 2005). These changing market situations
force organizations to alter their supply chain structure and handle it to be more
responsive to these changes. To respond to the challenges and demands of today’s
business environment, firms have undergone a revolution for implementing novel
operations strategies and technologies (Gunasekaran et al., 2008). Recent literature of
supply chain has addressed this flow and proposes that the key factor for surviving in
these changing situations is agility by forming responsive supply chain (Christopher,
2000). In a continuously changing global competitive environment, agility of an
organization’s supply chain directly affects its ability to produce and give inventive
products to its customers in a timely and cost-effective manner (Swafford et al., 2006).
The pharmaceutical section plays a significant role in the medical and health
continuum (Shabaninejad et al., 2014b). The pharmaceutical market is heavily regulated
in many countries because of the unique nature of supply and demand in this section (Yu
et al., 2010; Mehralian et al., 2014). According to the characteristics of the competition in
the drug market, governments must balance both clinical and economic interests
(Hakonsen et al., 2009; Rasekh et al., 2012). One of the targets of this supply chain is to
assure a continuous flow of drugs to patients at optimal price with minimal delays, low
shortages and little room for error (HDMA, 2009). A scientific and technological
transformation occurs in the pharmaceutical industry that will allow drug producers to
produce new profitable medicines in situations that they cannot be treated very well
today and in conditions which they have formerly persisted against all treatments.
Several elements press pharmaceutical firms to change their old manners of conducting
business. One of these elements is the supply chain, which changes to a source of
competitive advantage (Ahmad et al., 2009). Finally, the objective of this paper is to
address this question:
• To develop a model for an agile pharmaceutical supply chain (PSC), what critical
factors should be considered by pharmaceutical companies?
 IJPHM To answer this question, there are some sub-questions which should be answered
9,1 leading us to respond to the research question:
• To be agile in supply of active pharmaceutical ingredient, what critical factors
should be considered by pharmaceutical companies?
• To be agile in production of pharmaceutical products, what critical factors should
76 be considered by pharmaceutical companies?
• To be agile in distribution of pharmaceutical products, what critical factors
should be considers by pharmaceutical companies?

To answer the question, this article utilizes the fuzzy TOPSIS (technique for order
preference by similarity to ideal solution) to quantify critical factors. The remainder of
the paper is organized as follows: Section 2 presents the literature on SCM and a review
of pharmaceutical industry. In Sections 3 and 4, research methodology and data
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collections are developed. Section 5 presents the data analysis and results and,
ultimately, Sections 6 and 7 provide conclusion and implementations.

2. Literature review
2.1 The agile supply chain
Supply chain agility has been considered a lot recently as a way for organizations to
rapidly reply to changing business environment and improve their customer service
levels. To perceive this concept, it is important to first give the definition of the agile
companies. Agility has been proposed as a reply to the high levels of intricacy and
uncertainty in advanced markets (Christopher and Juttner, 2000). According to Naylor
et al. (1999), “agility means applying market knowledge and a vital corporation to
exploit profitable opportunities in a rapidly changing market place”. The relationship
between agility and flexibility is extensively discussed in the literature (Christopher,
2000; Swafford et al., 2006). It has been proposed that the origins of agility lie in flexible
manufacturing systems (Gosling et al., 2010).
The goal of an agile enterprise is to enrich or satisfy customers and employees. A firm
basically has a set of capabilities for giving appropriate replies to changes occurring in
its business environment. The business status in which a lot of companies understand
themselves is characterized by volatile and unpredictable demand. Hence, agility might
be defined as the ability of a firm to reply rapidly to changes in the market and
customers’ demands. To be really agile, a firm should control a number of differentiating
agility providers. Tseng and Lin (2011) have developed an agile enterprise conceptual
model, as shown in Figure 1.
Therefore, firms need a number of distinguishing attributes to promptly deal with
the changes inside their environment. Such attributes include four main elements (Sharp
et al., 1999): responsiveness, competency, flexibility/adaptability and quickness/speed.
The base for agility formation is to incorporate information technologies, staff, business
process organization, innovation and facilities into main competitive attributes. The
inclusion of agile strategies has some benefits for firms, including quick and efficient
reaction to changing market requests; the ability to customize products and services
delivered to customers, the capability to manufacture and deliver new products in a
cost-effective manner (Swafford et al., 2006), reduce production costs, enhance customer’s
satisfaction, remove non-value-added activities and increase competitiveness. Therefore,
agility has been advocated as the commercial paradigm of the twenty-first century. In
 Model for an
agile supply
chain

77
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Figure 1.
Components of an
agile supply chain

addition, agility is considered as the winning strategy for becoming a universal leader in an
increasingly competitive market of quickly changing customers’ requirements (Agarwal
et al., 2006; Ismail et al., 2007).

2.2 The pharmaceutical industry environment

The pharmaceutical industry is defined as a system of procedures, operations and
organizations involved in the discovery, development and production of drugs and
medications. The PSC represents the path through which essential pharmaceutical
products are distributed to the end-users with the right quality, at the right place and at
the right time (Mehralian et al., 2012a). The PSC is very complicated and greatly
responsible for ensuring that the appropriate drug is delivered to the right people at the
right time and in the right situation to fight against sickness and sufferings. This is a
highly sensitive supply chain in which everything less than 100 per cent customer
service level is unacceptable, as it directly influences health and safety. The solution
which many pharmaceutical industries adopt is to bear a vast inventory in the supply
chain to ensure about 100 per cent of fill rate. However, it is a great challenge to ensure
100 per cent of product availability at an optimum cost unless supply chain processes
are streamlined toward customer requirements and demands (Chandrasekaran and
Kumar, 2003).
 IJPHM More specifically, attributes such as marketing time, R&D productivity, drugs
9,1 lifecycle reduction, government regulations, decreasing exclusive patent life, production
flexibility and increase of cost are the main problems that pharmaceutical industries
face today. A manufacturer who can adjust improvement time by 19 per cent can save
up to $100 million. At the time of getting delivery of a drug to access the market, a firm
may get rid of around $1 million a day; therefore, marketing time is too important for
78 pharmaceutical companies to gain market share (Chandrasekaran and Kumar, 2003).
The pharmaceutical market is heavily regulated in many countries because of the
singular nature of supply and demand for drugs (Garattini et al., 2007). In accordance
with the feature of the competition in the drug market, governments must balance both
clinical and economic interests (Hakonsen et al., 2009). The pharmaceutical section plays
a crucial role in the medical and health system. Characterized with its size of total and
aging population, quickly increasing economy and increasing prevalence of chronic
diseases (like cardiovascular disease, cancer and chronic respiratory disease),
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pharmaceutical industry growth has increased very fast (Mehralian et al., 2012a).

2.3 PSC components

The PSC, like other industries, begins with sourcing of active and inactive ingredients
for approved products. Dosages are planned and packed into different configurations.
Products are delivered to company’s warehouses, wholesale distributors, retail
pharmacies, medicinal organizations (hospital pharmacy) and finally to end-users. The
data flow and funds flow start from end customer to producer through different
channels (Chandrasekaran and Kumar, 2003). A supply chain is the arrangement of
organizations, their facilities, acts and activities which are involved in manufacturing
and giving a product or service. A typical PSC consists of the following members: initial
manufacturing, secondary manufacturing, market warehouse/distribution centers,
wholesalers, retails/hospitals and patients (Shah, 2004). Previously, under a centrally
organized economy, whole pharmaceutical products were distributed by an owned
monopoly firm (first-tier wholesaler) to some regional wholesalers (second-tier
wholesalers) who would then deliver the products to local wholesalers (third-tier
wholesalers) (Shao and Ji, 2006). Among PSC components, it has been argued that
delivery of medicines has crucial effect on customers’ satisfaction (Rossetti et al., 2011).
Due to changing economic system, PSC has been reformed, and Figure 2 exhibits the
new PSC.

2.4 Supply chain operations reference model

In this study, we use the supply chain operations reference (SCOR) model according to
Supply Chain Council in 2001 (Braunscheidel, 2005). The SCOR makes a cross industry
structure for estimating and improving SCM and execution (Stewart, 1997). Five main
supply chain processes are captured by the structure of the SCOR model. The processes
are plan, source, making, deliver and return. In conceptualization of supply chain agility,
it is better to apprise each process separately to frame the theoretical parts of supply
chain agility into a generally accepted business structure (Braunscheidel, 2005).

2.5 Fuzzy TOPSIS

TOPSIS solves the multi-criteria decision-making tasks that implies full and
complete information on criteria expressed numerically. The method is very useful
for solving real problems; it provides us with the optimal solution or the alternative
 ranking. In addition, it is not as complicated for the managers as some other Model for an
methods that require additional knowledge. The TOPSIS technique would search agile supply
for the given alternatives and find the one that would be closest to the ideal solution, chain
but the farthest from the anti-ideal solution at the same time. Modification of the
method aims to set a different manner of determining the ideal and anti-ideal point
by standardizing quantification of linguistic attributes and introducing fuzzy
numbers for description of the attributes for the criteria expressed by linguistic 79
variables (Karimi et al., 2011).

3. Research method
In this section, we presented a methodology for operationalizing the variables and
factors, acquiring the data and determining the reliability of factor grouping. The
data used in this study were collected from a questionnaire distributed to managers
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in the Iranian pharmaceutical companies. The pharmaceutical industry is chosen

because it has a heavy and complete supply chain. These types of firms have tried to
improve their supply chain performance due to increasing concerns and importance
of supply issues and also manufacturers seek to find methods for improving their
performance.
This research is based on the SCOR model, and the scope of this paper emphasized on
the whole parts of PSC. To develop questionnaires, an extensive literature review has
provided several important factors for each part of supply chain area at the first phase
(for example: Tseng and Lin, 2011; Swafford et al., 2008; Qureshi et al., 2008;
Gunasekaran et al., 2008; Baramichai et al., 2007; Agarwal et al., 2007; Antonio et al.,
2007; Sharifi and Zhang, 1999). At the second phase, the initial questionnaires were
designed based on extracted factors. At the third phase, the initial questionnaires were
further revised by experts to customize them more specifically based on the
characteristics of PSC. Finally, nine critical factors for each part of the supply chain
consisting of supply, manufacturing and distribution were prepared, according to
Tables I-III. To measure the attitude, the chosen response is scored on a scale ranging
from 1 (strongly disagree) to 5 (strongly agree).
In addition to the above questions, information related to the basic profile of the
respondents was requested at the end of the questionnaire. The main sampling targets
were senior managers, department managers and personnel who were involved in the
decision-making.

Figure 2.
Pharmaceutical
supply chain
 IJPHM Dimensions
9,1
Planning and reorder
segmentation
80
Assessment and prioritizing
of suppliers for purchasing
Utilizing of IT tools
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Factors
Market research and monitoring
Forecast of alternatives suppliers
Quality/cost standards for supplier
selection
Maintaining list of prequalified
suppliers
E-commerce
Electronic biding
RFID (radio frequency
Citations
Baramichai et al. (2007),
Agarwal et al. (2007),
Tseng and Lin (2011),
Lin et al. (2006), Swafford
et al. (2008)
Baramichai et al. (2007)
Baramichai et al. (2007),
Gunasekaran et al.
(2008), Agarwal et al.

identification) (2007), Swafford (2003)

Material quantity adjustment
Process integration and
performance management
Cost reduction
Delivery speed
Trust development
Environmental pressure
Table I.
Agile supply factors
Order consolidation Baramichai et al. (2007)
Variety of suppliers
Co-managed inventory Agarwal et al. (2007),
Collaborative product design and Christopher (2000)
development
Synchronous supply
Sourcing cost Qureshi et al. (2008),
Inventory cost Agarwal et al. (2007),
Lin et al. (2006), Swafford
(2003)
Responsiveness rate Agarwal et al. (2007),
Reliability delivery Tseng and Lin (2011),
Sharifi and Zhang (1999)
Trust-based relations with Agarwal et al. (2007),
suppliers Tseng and Lin (2011),
Minimizing uncertainty Handfield and Bechtel
(2002)
Political factor Sharifi and Zhang (1999),
Economic factors Tseng and Lin (2011)
Social factors

3.1 Research model

Our research model is presented in Figure III. The key dependent variable of interest is
agility in the aforementioned sections which is expected to be influenced by some
independent variables. These variables have some related sub-factors and they are
shown in Tables I-III, and as a result, agility can improve responsiveness, quickness,
flexibility and competency of distributers.

3.2 Capabilities of agility

Agile companies require a number of distinguishing capabilities or “fitness” to deal with
the change, uncertainty and unpredictability within their business environment. These
capabilities consist of four principal elements (Ren et al., 2001; Giachetti et al., 2003):
(1) Responsiveness: Which is the ability to identify changes and respond quickly to
them, reactively or proactively and recover from them.
 Citations Factors Dimensions
Model for an
agile supply
Breu et al. (2001), Education and learning Employee empowerment chain
Gunasekaran et al. (2008) Innovation and creation
People flexibility
Agarwal et al. (2007), Skills in IT (information technology) Information technology
Gunasekaran et al. (2008), RFID and systems
Swafford et al. (2008), Tseng Exchange of information
81
and Lin (2011) Collaboration on strategic and
operational planning
E-commerce
Christopher (2000), Customer orientation Market sensitive
Agarwal et al. (2007), Lin et al. Monthly feedback
(2006), Tseng and Lin (2011) Retain and grow customer
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relationships
Market behaviors
Swafford (2003), Fast introduction of new products New innovative
Braunscheidel, (2005), Technological innovation products
Baramichai (2007), Agarwal et Approved quality
al. (2007) Performance quality
Antonioa et al. (2007), Product quality
Agarwal et al. (2007)
Sharifi and Zhang (1999), Timeliness of delivery Delivery speed
Antonioa et al. (2007), Delivery reliability
Agarwal et al. (2007), Yeung
(2008)
Patil (2006), Agarwal et al. Penalty cost Reduction costs
(2007), Antonioa et al. (2007), Inventory cost
Tseng and Lin (2011) Reduce setup time
Swafford (2003), Supply flexibility Flexibility
Braunscheidel (2005), Lin et al. Manufacture flexibility
(2006), Antonioa et al., (2007),
Tseng and Lin (2011)
Sharifi and Zhang (1999), Political factor Environmental pressure Table II.
Braunscheidel (2005), Tseng Economic factors Agile manufacturing
and Lin (2011) Social factors factors

(2) Competency: Which is the ability to efficiently and effectively reach the firms’
aims and goals.
(3) Flexibility/adaptability: Which is the ability to process different processes and
achieve different goals with the same facilities.
(4) Quickness/speed: Which is the ability to carry out activity in the shortest possible
time.

Furthermore, a methodology of integrating them into a coordinated, interdependent

system and translating them into strategic competitive capabilities underpin these fours
principles (Sharp et al., 1999). These must be considered if an organization carries out an
agile enterprise (Tseng and Lin, 2011).
 IJPHM Dimensions Factors Citations
9,1
Information technology Utilizing of IT for information sharing Tseng and Lin (2011),
capability RFID Swafford et al. (2008),
Utilizing of IT for distribution Qureshi et al. (2008)
Flexibility Flexibility in warehouses space Tseng et al. (2011), Swafford
82 Utilizing of flexible equipments et al. (2008), Qureshi et al.
Skilled employee (2008), Baker (2008), Agarwal
Flexibility in operation and delivery et al. (2007)
Quality Quality of service Qureshi et al. (2008), Lin et al.
Management quality (2006), Antonio et al. (2007)
Market research and Sale feedback Agarwal et al. (2007), Tseng
monitoring Customer orientation and Lin (2011), Qureshi et al.
Forecasting crisis capacity (2008)
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Optimum cost Inventory cost Agarwal et al. (2007), Tseng

Transportation and delivery cost et al. (2011), Qureshi et al.
Penalty cost (2008), Patil (2006
Customer satisfaction Product reliability Yeung (2008), Agarwal et al.
Customer complaints (2007)
Delivery speed Delivery speed Antonio et al. (2007),
Reliability delivery Agarwal et al. (2007), Tseng
Reduced production lead time and Lin (2011), Swafford et
al. (2008), Qureshi et al. (2008)
Relationship Geographical distribution range Qureshi et al. (2008)
Reputation
Long-term relationship
Table III. Environmental Political factor Sharifi and Zhang (1999),
Agile distribution pressure Economic factors Tseng and Lin (2011)
factors Social factors

Figure 3.
Research model
 3.3 Reliability and validity of the questionnaire Model for an
The internal consistency of a set of measurement items refers to the degree to which agile supply
items in the set are homogeneous. Internal consistency can be estimated using reliability
coefficient such as Cronbach’s alpha (Saraph et al., 1989). In this research, Cronbach’s
chain
alpha was calculated to be 0.86.
The validity of a measure refers to the extent to which it measures what should be
measured. Content validity is not evaluated numerically, it is subjectively judged by the 83
researchers (Kaplan, 1987). The measurement items were based on an extensive review
of the literature on various SCM approaches. To measure the acceptance of the
questionnaire, ten people who were qualified for SCM participated in a pilot test. The
participants suggested adding and omitting some parts of the questionnaire. Finally, all
the pretest participants strongly agreed on the suitability of the questionnaire. The
questionnaire was considered to be finalized after modifying some questions and then
was ready for delivery.
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In addition to the face validity, factors of eigenvalues greater than 1 were kept using
method of principal components extraction. The factor analysis (i.e. Pearson’s principal
component analysis) was tested with and without rotation (i.e. varimax rotation with
Kaiser normalization). The conservative factor loadings of greater than 0.5 were
considered at the 95 per cent level of confidence (Hair et al., 1998).

4. Data collection
Data of this study were collected using a questionnaire distributed to 21 pharmaceutical
firms affiliated to three large holding companies. To understand the viewpoints of agile
supply chain from key sectors of the pharmaceutical industry, questionnaires were sent
to the marketing, sales, information technology (IT), finance, R&D and quality
assurance and control departments. Accordingly, respondents were chosen among
managers who had comprehensive knowledge about company’s process, products and
general pharmaceutical-related issues. The number of questionnaires was different,
depending on the target section in PSC. Finally, 93 questionnaires for supply sector, 156
questionnaires for manufacturing sector and 118 questionnaires relating to distribution
sector were returned.

5. Results and analysis

Data have been analyzed through statistical analysis and the multiple attribute
decision-making (MADM) algorithm. In statistical analysis, Pearson correlation and
fuzzy TOPSIS have been used. In this section, fuzzy TOPSIS technique as an algorithm
of MADM has been used to prioritize SCM agility factors. There are many applications
of fuzzy TOPSIS in the literature. Chen et al. (2006) presented a fuzzy TOPSIS approach
to deal with the supplier selection problem in a supply chain system. Yang and Hung
(2007) used TOPSIS and fuzzy TOPSIS methods for a plant layout design problem
(Karimi et al., 2011).
The TOPSIS method was first proposed by Hwang and Yoon (1981). The basic
concept of this method is that the chosen alternative should have the shortest distance
from the positive ideal solution and the farthest distance from a negative ideal solution.
A positive ideal solution is a solution that maximizes the benefit criteria and minimizes
cost criteria (Karimi et al., 2011), whereas a negative ideal solution maximizes the cost
criteria and minimizes the benefit criteria. In the classical TOPSIS method, the weights
 IJPHM of the criteria and the ratings of alternatives are known precisely and crisp values are
9,1 used in the evaluation process. However, crisp data are inadequate to model real-life
decision problems under many conditions. Therefore, the fuzzy TOPSIS method is
proposed, in which the weights of criteria and ratings of alternatives are evaluated with
linguistic variables represented by fuzzy numbers to deal with the deficiency of the
traditional TOPSIS (Ertugrul and KarakaşoGlu, 2008).
84 This paper extends the TOPSIS method proposed by Chen et al. (2006). The related
algorithm can be described as follows (Chen et al., 2006).
Step 1: A committee of the decision-makers is established. Fuzzy rating of each
decision-maker Dk ⫽ (k ⫽ 1, 2, … k) can be represented as triangular fuzzy number
R̃k ⫽ (k ⫽ 1, 2, …;) with membership function ␮R̃k(x).
Step 2: Criteria evaluation is determined.
Step 3: After that, appropriate linguistic variables are chosen for evaluating criteria
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and alternatives.
Step 4: Then the weight of criteria is aggregated. The aggregated fuzzy rating can be
determined by:

R̃ ⫽ (a,b,c), k ⫽ 1, 2, … k.
k
where, a ⫽ min兵ak其, b ⫽
1
兺b , c ⫽ max兵ck其
k k⫽1 k
(1)

k
aij ⫽ min 兵aijk其, bij ⫽
k
1
兺 b , c ⫽ max 兵cijk其
k k⫽1 ijk ij k
(2)

Then, the aggregated fuzzy weight (w̃ij) of each criterion is calculated by:

(w̃ij ) ⫽ (wj1, wj2, wj3 ) (3)

k
Where wj1 ⫽ min 兵wik1其, wj2 ⫽
k
1
兺w , w ⫽ max 兵wjk3其
k k⫽1 jk2 j3 k
(4)

Step 5: Then, the fuzzy decision matrix is constructed.

Step 6: The above matrix is normalized.
Step 7: Considering different weights of each criterion, the weighted normalized
decision matrix is computed by multiplying the importance weights of evaluation
criteria by the values in the normalized fuzzy decision matrix.
Step 8: The fuzzy-positive ideal solution (FPIS,A*) and fuzzy-negative ideal solution
(FNIS,A*) are determine by:
⬃ ⬃ ⬃
A* ⫽ (V1*, V2*, …, Vn* ), (5)
⬃ ⬃ ⬃
A⫺ ⫽ (V1⫺, V2⫺, …, Vn⫺ ), (6)
⬃ ⬃
Where, V*j ⫽ max 兵Vij3其 and V⫺
j ⫽ min 兵Vij1其.
i i
 i ⫽ 1, 2, …, m; j ⫽ 1, 2, …, n Model for an
Step 9: Then, the distance of each alternative from FPIS and FNIS is calculated by:
agile supply
chain
n

兺 d (V , V )
⬃ ⬃
d ⫽
*
i v ij
*
j i ⫽ 1, 2, …, m (7)
j⫽1
85
n

兺 d (V , V
⬃ ⬃
i ⫽
d⫺ ) i ⫽ 1, 2, …, m
⫺
v ij j (8)
j⫽1

Where dv(…) is the distance measurement between two fuzzy numbers.

Step 10: A closeness coefficient is defined to rank all possible alternatives. The
closeness coefficient represents the distance between the FPIS (A*) and FNIS (A⫺)
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simultaneously. The closeness coefficient of each alternative is calculated by:

d⫺
i i
CCi ⫽ , i ⫽ 1, 2, …, m (9)
d*i ⫹ d⫺
i

Step 11: According to the closeness coefficient, the ranking of the alternative can be
determined.

5.1 Correlation analysis

To test the relationships among risk factors, Pearson correlation has been used in this
study. It means that if there is any inter-correlation among critical factors. The results
indicated that these factors had been generally correlated with each other in each sector.

5.2 Result of fuzzy TOPSIS

To apply fuzzy TOPSIS, the language terms have been converted into fuzzy numbers
according to Table IV.
To prioritize the factors, the fuzzy TOPSIS method has been used, and its results are
shown from Tables V-VII.
Based on agile supply factors, delivery speed, planning and reordering and trust
development are placed in the top ranking priorities, as shown in Table V. To associate
agile manufacturing factors, as shown in Table VI, delivery speed, products
development and cost reduction should be highly considered by pharmaceutical
managers, until they can perform their operations efficiently. According to the agile
distribution section, as illustrated in Table VII, factors such as market research, quality,
delivery speed and customer satisfaction show high concerns regarding to respondents’
attitude.

Very low 1 (0, 0.1, 0.2)

Low 2 (0.1, 0.25, 0.4)
Medium 3 (0.3, 0.5, 0.7) Table IV.
High 4 (0.6, 0.75, 0.9) Language term for
Very high 5 (0.8, 0.9, 1) TOPSIS method
 IJPHM 6. Conclusion
9,1 Today, organizations encounter dynamic and changing environments, where product
lifecycles are short and environmental pressures make a lot of uncertainties, which force
companies to manage risks proactively. Companies need agility to deal with these
situations not only in the organization but also in their entire supply chain (Ismail and
Sharifi, 2006; Charles et al., 2010). In this study, all attempts aimed to provide an efficient
86 and optimized model for agility of supply chain in the pharmaceutical industry. At first,
attempt is made to identify factors affecting supply chain agility and these factors were
prioritized in the second phase. Generally, seven main indicators were identified as the
most important factors affecting process of agility in the PSC including; delivery speed,

Agile supply factors Ci (rank of TOPSIS)

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Delivery speed 0.339

Planning and reordering 0.416
Trust development 0.457
Quantity adjustment 0.576
Cost reduction 0.70
Assessment and prioritizing 0.81
Table V. Environmental pressure 1.26
TOPSIS rank of agile Process integration 1.39
supplying factors Utilizing of IT tools 1.78

Agile manufacturing factors Ci (rank of TOPSIS)

Delivery speed 0.418

Products development 0.525
Cost reduction 0.780
Market research 0.970
Product quality 1.05
Table VI. Environmental pressure 1.12
TOPSIS rank of agile Employee empowerment 1.19
manufacturing Flexibility 1.34
factors Information technology 2.65

Agile distributing factors Ci (rank of TOPSIS)

Market research 0.652

Quality 0.657
Delivery speed 0.719
Customer satisfaction 0.773
relationship 0.804
Information technology 1.04
Table VII. Environmental pressure 1.14
TOPSIS rank of agile Optimum cost 1.57
distribution factors Flexibility 2.31
 cost reduction, quality, market research, flexibility, use of IT tools and environmental Model for an
pressure. agile supply
According to Sharifi and Zhang (1999), delivery speed will directly increase the speed
of supply chain. Certainly, each business wants to reduce costs because it has many
chain
positive effects. In the agile supply chain, decrease of the costs both inside the
organization and even outside the organization, which directly or indirectly affects cost
of the finished product is the strategic goal (Cooper and Slagmulder, 1998). According to 87
Agarwal et al. (2007), cost reduction can promote accountability of supply chain as well.
According to most definitions of agility, it can be seen that they have directly or
indirectly concentrated on flexibility (Christopher, 2000). Studies (Sharifi and Zhang,
1999; Swafford et al., 2006, 2008) have shown that flexibility can remarkably promote
the responsiveness of supply chain.
Quality considered as a vital factor of pharmaceutical manufacturer was recognized
as another fundamental factor in this study and closely relates to good manufacturing
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practice, which has been reinforced by regulatory body to assure the quality of drugs
until they reach end users. Furthermore, quality is generally accepted as an essential
factor, besides efficacy and safety, almost in any country in the world, according to the
National Drug Policy, such that pharmaceutical manufacturers must consider this issue
seriously along with drug supply chain (Friedli et al., 2010). Agarwal et al. (2007) believe
that agile supply chain can effectively increase quality of pharmaceutical products, and,
as a result, patient satisfaction could be achieved. In the present study, market research
and monitoring along with sub-indices (sale feedback, customers’ requirement and
forecasting) were identified as the most and influential factors of shaping agile supply
chain in pharmaceutical sector, and they are in line with several works which have
shown the ability of this case to increase responsiveness, flexibility and agility of supply
chain (Sharifi and Zhang, 1999; Christopher, 2000; Gunasekaran et al., 2008). Finally, in
the obtained supply agility model, the last identified effective factor generally uses IT
tools (UIT), while Breu et al. (2001) stated that information systems are integral parts of
agile supply chain and they will increase its speed and flexibility.

7. Managerial implications
During the recent decades, SCM has become a popular agenda for both pharmaceutical
industry and non-pharmaceutical industry. Factors such as globalization, outsourcing,
single sourcing, just-in-time SCM and lean and agile supply chain have made PSC more
sensitive to the environment. As such, to survive and make progress in the twenty-first
century economy, pharmaceutical companies should learn how to manage the ongoing
challenges in their environment. More specifically, pharmaceutical firms must deeply
manage their supply chain to become resilient to unexpected disruptions in their
environment. Finally, it should be said that firms must extensively pay attention to their
supply chain operations due to unbelievable relationships between response to
consumer’s requirements and firm’s success (like profitability and corporate social
responsibility).

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About the authors
Gholamhossein Mehralian is Assistant Professor in the Pharma Management and
Pharmacoeconomics Department, School of Pharmacy, Shahid Beheshti University of Medical
Sciences, Iran. He is Pham-D and received his PhD in Pharma Management and
Pharmacoeconomics from School of Pharmacy, Shahid Beheshti University of Medical Sciences,
Iran. He has more than 25 papers in organizational behavior, management, drug supply chain as
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well as pharmaceutical policy and practice, which published in peer-reviewed journals.

Gholamhossein Mehralian is the corresponding author and can be contacted at:
gmehralian@gmail.com
Forouzandeh Zarenezhad is a Researcher in Tarbiat modaress Unviersity, Tehran, Iran. She is
student of DBA degree in Entrepreneurship in Tehran University, Tehran, Iran. She received
MBA degree in Strategy in Science and Culture university, Tehran, Iran. Her research interests are
in entrepreneurship, strategic planning, leadership and supply chain management. She has
published five papers in ISI journals.
Ali Rajabzadeh Ghatari is associated as a Professor in Operation Management at Tarbiat
Modares University. He has graduated in Industrial Management from Petroleum University of
Technology for bachelor degree. His Master degree is in Business Administration and he received
his PhD in Operation Management from Tarbiat Modares University. He has done more than 20
different research projects related to different fields in management such as operation
management, IT management, productivity and strategies. He has more than ten books and more
than 70 research papers in different managerial and IT fields.

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