How Modernizing the Supply Chain Lowers Costs and Expands Access to OTC Medicines

Global trade tensions and shifting tariff policies are creating significant challenges for manufacturers as they work to maintain product availability on retail shelves. According to Christy Christian, senior industry principal with Kinaxis, these disruptions are not entirely new, but the pace and unpredictability of change have intensified. Manufacturers now face a rapidly evolving landscape where tariffs can shift overnight—from metals to paper to other key materials—making it difficult to maintain stable, long-term supply chain strategies.

A key issue lies in the extended and globally distributed nature of modern supply chains. Many companies source components or raw materials from regions far from where final products are assembled, which introduces delays and reduces flexibility in responding to sudden tariff changes. The cascading effects of such disruptions extend across tier one, tier two, and tier three suppliers, amplifying bottlenecks and vulnerabilities.

Traditionally, companies have mitigated supply chain risk by building inventory buffers. However, in today’s financial climate, organizations are less willing or able to tie up capital in excess inventory. Maintaining large stockpiles directly impacts free cash flow, which remains a top priority for many manufacturers. This constraint leaves supply chains with limited slack and little room for error when disruptions occur.

As a result, firms must find ways to optimize and adapt their networks within increasingly complex conditions. Agility—both in planning and execution—has become essential. Companies need to rapidly update sourcing strategies, reallocate inventory, and pivot operations in response to tariff shifts or supplier closures. Yet, the challenge is ensuring that adjustments happen quickly enough to prevent excess raw materials from arriving after market conditions have changed. In today’s volatile global environment, the ability to dynamically balance inventory, cash flow, and sourcing flexibility defines supply chain resilience.

Christian also comments on the hurdles that typically come with moving from manual spreadsheets to AI-powered orchestration in the healthcare supply chain, the reliability of AI-driven demand forecasts in the face of unpredictable events; how supply chain modernization directly affects the affordability and accessibility of OTC medicines; and more.

A transcript of her conversation with PC can be found below.

PC: How does supply chain modernization directly affect the affordability and accessibility of OTC medicines?

Christian: The premise behind modernization is, how do we improve efficiencies? That's really fundamentally it. How do we take resources that we have and make it more efficient in the way that we produce product, we run our business, we impact the environment, all of that. So if you think about that, that correlates to cost, and if we can run our businesses more efficiently with less cost, that affordability translates all the way down to that final customer.

When we have inefficiencies, inefficiencies are waste and inefficiencies are dollars spent, and those get passed on, because there's a profitability target that every organization has, and if we can improve the way we operate, all of a sudden, that revenue stream is still as profitable. We can change that end target price and therefore, potentially produce more because we're operating more efficiently with the capacity we have, and then also at a lower cost, making it more affordable to more people, so there's more demand.