Private Sector

TermiKnowledge - Supply Chain, Procurement and Inventory Terminologies
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The warehouses that service the production, processing, packing, shipping, and transportation of goods are called Private Sector Warehouses. These warehousing facilities may be located inside or outside of the United States. The largest Private Sector warehouses are located in California, Texas, New York, and Illinois. While the public sector is considered to be a reliable source of low-priced, low-regulated goods and services, public services are often much more costly than those provided by the private sector. This is due in large part to the fact that the public sector must rely on delivery drivers who must be insured, licensed, and bonded, which all require a financial investment beyond what most warehouse owners and processors can realistically afford.

Private Sector Warehouses, on the other hand, are generally leaner, more efficient, and less dependent upon government programs, support services, and health care providers. Lean manufacturing principles, which stress the avoidance of waste through a systematic and data-driven approach, are a fundamental principle of the pharmaceutical supply chain. Another important advantage is the ability to serve the customer quickly. The main goal of these warehouses is to process shipments as quickly as possible, while providing the best product and service possible. Processes may also be completed within a set time period and at a specific price.

Both the supply chain management and pharmaceutical procurement practices of the private sector have evolved out of their common need to meet the increasing demands of consumers, which are continuously increasing due to globalization, economic growth, and population growth. As globalization continues to deepen economic divides, the ability of companies to perform efficiently and in response becomes increasingly important. In order to help address the complex challenges of globalization, pharmaceutical companies have made drastic changes to their procurement practices. In fact, some companies have gone so far as to outsource entire segments of their operations to enhance efficiency and avoid waste.

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