In our 2025 IMD Global Supply Chain Survey, we highlight the specific challenges leaders face when transforming supply chains today. To complement the 2025 survey, we have interviewed leaders in the field to get their insights on best practice in a complex and changing environment.
From his advisory work in a leading FMCG company, despite the supply chain being critical in this sector, Tariq noted that supply chain was never discussed at board level until COVID-19 forced it onto the agenda. He observed this challenge with a prominent pharmaceutical manufacturer too, that invested $11 billion to acquire three factories, yet persistent underinvestment in basic processes such as S&OP led to stockouts when demand for their products suddenly surged.
Farooq highlights how the role of supply chains has evolved from a service function to a strategic lever for organizations today. “It’s no longer just about logistics or cost. Supply chain is now widely recognized as a competitive advantage – provided you have the right capabilities in place.”
Drawing from his experience across sectors, he points out that industries such as FMCG and high tech embraced this shift earlier. “Companies like P&G realized decades ago that a well-run supply chain creates value. Pharma, by contrast, has historically operated with more margin headroom and less pressure from customers.” He explains that pharmaceutical companies have for some time now been hiring experts from FMCG to drive supply chain innovation in their organization. As an example, pharma typically relies on weekly or monthly cycles, while FMCG firms standardize 30-minute delivery windows. “Patients today expect the same speed and service they get in consumer retail. Supply chains have to keep up. In pharma, that means moving beyond compliance toward patient-centricity – and that requires a different operating model.” Farooq points out underinvestment in “last mile delivery,” noting that a major player in the pharmaceutical sector was slow to recognize that the business had shifted from distributing pallets to warehouses to delivering medication and infusion therapies directly to patients’ homes.
Farooq says that while best practices in supply chain management already exist in most industries, they often haven’t spread consistently across organizations or between leading and lagging players in an industry. Growth through well-selected acquisitions can help transfer some of these practices.
“You can’t digitize dysfunction. If production planning is still done in spreadsheets and entered manually into SAP, you're not ready to scale AI. The priority must be data architecture, master data, and integrated process ownership.”
Farooq is clear-eyed about the allure of digital innovation but warns against premature investment. “There’s a tendency to prioritize advanced tools – AI, digital twins, control towers – before the basics are in place. That approach is flawed.” Drawing on his experience at Fresenius Kabi, he emphasizes the need for robust processes to react to demand surges and explains that giving the green light on new capacity takes multiple years before full capacity is reached.
He emphasizes the need for foundational data governance and end-to-end process visibility. “You can’t digitize dysfunction. If production planning is still done in spreadsheets and entered manually into SAP, you’re not ready to scale AI. The priority must be data architecture, master data, and integrated process ownership.” He notes that in an Amazon-driven world, rising consumer expectations around speed and convenience have pushed companies to quickly modernize, including the urgent shift to the enterprise software S/4HANA, as older SAP systems will no longer be supported beyond 2030.
Farooq also points to best practices from companies like P&G: “They institutionalized process ownership globally. If one plant improves a process, it becomes the standard. That mindset – continuous improvement over flashy tools – delivers sustainable results.”
Talent development and retention can also be adversely affected.
Beyond systems, Farooq sees misaligned incentives as a major barrier to transformation. “You can’t claim to prioritize service or customer experience if your KPIs only reward cost reduction. At many pharmaceutical firms, plant heads are still incentivized on cost first. That leads to favor long production runs and infrequent changeovers, which undermine flexibility and service.”
Talent development and retention can also be adversely affected. “In many cases, our best people leave not because of culture or pay, but because the tools and processes don’t allow them to succeed.” This is illustrated by the example of a pharmaceutical company in Asia that hired experienced supply chain experts from Chinese FMCG firms, only to see them leave within months because they were used to advanced software and tools and suddenly found themselves working with Microsoft Excel.
As a result, he underscores that leadership must take responsibility. “Engagement and capability are reflections of leadership decisions – not individual performance.”
Talk to customers, suppliers, and internal stakeholders to uncover friction points and identify real opportunities for collaboration.
Drawing on his global supply chain transformation experience, Farooq shares three priorities for today’s executives:
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