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 American Journal of  Medical Science
and Innovation (AJMSI)

The Influence of  CITO Procurement on Pharmaceutical Supply Chains: Efficiency, 
Challenges, and Outcomes  

Desy Kartika Ningsih1*

Volume 4 Issue 1, Year 2025
ISSN: 2836-8509 (Online)

DOI: https://doi.org/10.54536/ajmsi.v4i1.3925
https://journals.e-palli.com/home/index.php/ajmsi

Article Information ABSTRACT

Received: October 20, 2024

Accepted: November 25, 2024

Published: December 08, 2024

This paper investigates the role of  CITO (Critical Item Time Order) procurement in 
optimizing pharmaceutical supply chains, particularly in contexts requiring rapid responses 
to urgent supply needs. CITO procurement is analyzed for its effectiveness in enhancing 
operational efficiency, cost management, and patient outcomes within healthcare settings. 
Through a comprehensive review of  existing literature and case studies, the paper identifies 
both the strengths and challenges associated with CITO implementation. Key findings 
suggest that while CITO can significantly reduce lead times and stockouts, organizations 
must also address potential risks related to supplier quality and regulatory compliance. The 
study proposes strategies for optimizing CITO procurement processes, emphasizing the 
importance of  technology and strong supplier relationships in ensuring reliable and timely 
access to critical medications. Ultimately, this research highlights CITO’s potential as a 
vital strategy in the evolving landscape of  pharmaceutical supply chains, underscoring its 
relevance for improving healthcare delivery and patient care.

Keywords
CITO Procurement, Critical 
Item Order, Healthcare Logistics, 
Pharmaceutical Supply Chain, 
Supply Chain Efficiency

1 Universitas Indonesia Maju, Indonesia
* Corresponding author’s e-mail: deskartik123@gmail.com

INTRODUCTION
The pharmaceutical supply chain plays a crucial role in 
healthcare by ensuring the availability, safety, and quality of  
medications for patient care (Alshemari et al., 2020). The 
complexity of  the pharmaceutical supply chain arises from 
its highly regulated nature and its need to meet stringent 
standards at every stage, from sourcing raw materials 
to delivering the final products to healthcare providers 
and patients. This chain involves various stakeholders, 
including manufacturers, distributors, healthcare 
providers, and regulatory bodies, each contributing to the 
flow and monitoring of  pharmaceutical products.
One key function of  the pharmaceutical supply chain 
is maintaining medication availability while minimizing 
waste and avoiding shortages. Recent studies emphasize 
the impact of  supply chain efficiency on patient 
outcomes, with a clear link between well-managed 
supply chains and quality patient care (Abbas et al., 2020). 
Automated systems are increasingly adopted to monitor 
inventory, manage expiry dates, and respond to recalls, 
which reduces administrative burdens on clinicians and 
enhances inventory visibility, thus supporting faster and 
more accurate supply decisions (Chen et al., 2023).
Supply chains in healthcare, particularly post-pandemic, 
have shown vulnerabilities to disruptions, highlighting 
the need for resilient systems capable of  adapting 
to crises such as raw material shortages or logistical 
challenges. To strengthen the supply chain, healthcare 
systems are increasingly incorporating real-time data and 
analytics, which improve decision-making by enabling 
accurate demand forecasting and reducing dependency 
on single sources (Yaroson et al., 2021). Transparency 
and collaboration among supply chain stakeholders are 
also pivotal, as they allow for coordinated responses to 
potential shortages and help mitigate future risks.

In summary, the pharmaceutical supply chain is 
fundamental to healthcare operations, directly impacting 
both clinical outcomes and the financial sustainability 
of  healthcare systems. Optimizing these supply chains 
through automation, transparency, and strategic 
partnerships is crucial for maintaining continuous access 
to essential medications and improving healthcare 
resilience.
CITO is a specialized procurement strategy designed to 
rapidly address urgent needs for critical items in supply 
chains, particularly in healthcare and pharmaceuticals. 
This approach is utilized to ensure that high-priority, 
often life-saving supplies reach their destination with 
minimal delay (Elmiawati Latifah et al., 2023). Unlike 
traditional procurement methods, which are primarily 
cost-driven and follow routine ordering cycles, CITO 
procurement is time-sensitive and focuses on speed and 
immediate availability over cost-efficiency. The method 
is especially relevant in healthcare, where timely access 
to essential medicines or equipment is directly linked to 
patient outcomes (Handayany & Basri, 2022).
In practice, CITO procurement involves processes that 
expedite ordering, inventory checks, and transportation 
logistics to shorten delivery times. This method typically 
leverages a blend of  strategies such as priority contracts, 
premium shipping options, and real-time inventory 
tracking, which are critical for handling unexpected spikes 
in demand or supply chain disruptions. For instance, 
during the COVID-19 pandemic, healthcare providers 
increasingly relied on CITO procurement to obtain 
critical items like personal protective equipment and 
ventilators, bypassing typical supply chain constraints to 
secure immediate resources (Almahdy et al., 2021). 
Overall, CITO procurement is designed to handle high-
stakes scenarios where timely delivery is essential, and 



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it requires close coordination between suppliers and 
healthcare providers. This coordination helps minimize 
the risks associated with stockouts of  critical supplies, 
although it may involve higher costs due to expedited 
services and premiums on immediate availability. 
As supply chain resilience becomes a focal point in 
healthcare, CITO procurement remains a key approach 
to ensuring the rapid availability of  essential supplies 
during emergencies.
The relevance of  CITO in healthcare is paramount for 
ensuring the timely availability of  critical medicines, 
particularly in response to urgent and unpredictable 
demand fluctuations. CITO procurement strategies are 
designed to deliver essential medicines swiftly, bypassing 
the longer lead times often associated with traditional 
procurement methods. This capability is crucial in 
healthcare, where delays in acquiring necessary drugs can 
have severe consequences for patient outcomes, especially 
in emergency care settings and during public health crises 
such as pandemics.
In healthcare environments, the demand for certain 
medications can change suddenly, driven by factors like 
seasonal disease outbreaks, supply chain disruptions, or 
natural disasters. Traditional procurement systems, which 
rely on scheduled purchasing and bulk orderingorders, 
may struggle to meet these sudden shifts in demand. 
CITO, on the other hand, emphasizes flexibility and 
responsiveness by leveraging agile supplier relationships 
and pre-negotiated contracts that allow healthcare 
providers to source medications at short notice.
The real-time tracking and data-driven capabilities 
integrated into CITO systems also play a significant role in 
improving supply chain resilience. By providing accurate 
demand forecasts and early identification of  shortages, 
CITO helps healthcare providers maintain continuity in 
drug availability, ensuring that high-demand medications 
are available precisely when and where they are needed. 
This capacity is especially important for hospitals, where 
availability of  critical medicines like antibiotics, blood 
products, and respiratory treatments can be life-saving.
Furthermore, CITO’s relevance is amplified in settings 
that serve vulnerable populations, such as intensive care 
units, cancer treatment centers, and dialysis facilities, 
where a disruption in medication supply could lead to 
severe health complications. In these contexts, CITO 
supports healthcare providers in managing high-stakes 
supplies effectively, thereby enhancing patient care quality 
and reducing the risks associated with drug shortages.
In sum, CITO procurement is instrumental in ensuring 
that healthcare facilities can meet urgent needs with speed 
and precision, supporting the continuous availability 
of  life-saving drugs and improving the resilience of  
the healthcare supply chain. By reducing lead times 
and enhancing supply flexibility, CITO aligns with the 
critical demands of  modern healthcare, where timely 
medication availability can directly influence patient 
survival and well-being. The study is implemented to 
evaluate the Effectiveness of  CITO Procurement in 

Ensuring Timely Access to Critical Medicines: This 
study aims to assess how effectively CITO (Critical 
Item Time Order) procurement models ensure the 
availability of  critical medications in healthcare settings, 
particularly during times of  high demand or supply 
chain disruption. This includes examining the impact of  
CITO on reducing lead times, improving supply chain 
responsiveness, and minimizing stockouts. Further, it will 
also analyze Cost Implications of  CITO in Comparison 
to Traditional Procurement Models: A key objective 
is to evaluate the cost structures associated with CITO 
procurement compared to traditional methods. The 
study will explore whether the benefits of  increased 
flexibility and speed justify the potential premiums 
associated with CITO, such as expedited shipping costs, 
and analyze its cost-effectiveness in healthcare contexts 
where critical medicines are essential. It is also important 
to assess the Challenges of  Implementing CITO in the 
Pharmaceutical Supply Chain: The study will investigate 
specific challenges faced by healthcare providers in 
implementing CITO, including regulatory compliance, 
quality assurance, risk management, and the need for 
advanced digital systems. Understanding these obstacles 
can provide valuable insights for organizations looking 
to adopt or optimize CITO models. Lastly, the study can 
be a fundamental reference to determine the Impact of  
CITO on Resource Allocation and Risk Management: 
This research will analyze how CITO affects resource 
allocation within procurement departments, particularly 
in terms of  manpower and time management. It will also 
examine how CITO procurement supports or complicates 
risk management efforts, as flexibility in sourcing may 
introduce risks related to supplier verification and product 
quality (Paramitha & Oktamianti, 2024).
The significance of  this study lies in its potential to 
inform healthcare providers, policymakers, and supply 
chain managers about the benefits and limitations of  
CITO procurement in the pharmaceutical industry. With 
healthcare systems increasingly reliant on agile supply 
chains that can quickly adapt to demand changes, this 
research provides a detailed analysis of  CITO’s impact 
on the timely availability of  life-saving drugs. In an 
environment where drug shortages have been linked 
to higher mortality rates and poorer health outcomes, 
understanding the role of  CITO in mitigating these 
issues is essential. The findings of  this study could help 
healthcare facilities optimize their procurement practices, 
improving patient care by reducing lead times and 
ensuring medication availability during critical moments. 
Moreover, this research will offer practical insights 
for managing the unique challenges of  CITO, such as 
regulatory compliance and risk of  counterfeit products, 
which are particularly significant in the pharmaceutical 
sector. As supply chains become increasingly complex 
and interdependent, this study could be instrumental in 
guiding effective implementation of  CITO, contributing 
to more resilient healthcare systems worldwide.



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LITERATURE REVIEW
The origins of  CITO procurement trace back to industries 
that required rapid sourcing and delivery of  high-priority 
items, especially during times of  crisis or urgent demand. 
Initially, CITO practices were seen in fields like defense 
and aerospace, where the need for critical supplies and 
equipment during emergencies spurred the development 
of  procurement models focused on speed and flexibility 
(Ngir et al., 2023). Over time, as global supply chains 
grew more complex and demand for responsive systems 
increased, CITO methodologies found applications 
in other critical sectors, particularly healthcare and 
pharmaceuticals, where the availability of  life-saving 
medications can directly impact patient outcomes.
In the healthcare sector, CITO procurement has gained 
traction more recently as a response to the increased 
demand for critical medicines and medical supplies, 
particularly during health crises like the COVID-19 
pandemic. The pandemic highlighted the limitations of  
traditional procurement models, which often failed to keep 
pace with the rapid fluctuations in demand for essential 
medical supplies such as ventilators, personal protective 
equipment (PPE), and specific medications. Faizar et al. 
(2023) points point out that the urgent requirements 
during the pandemic accelerated the adoption of  CITO 
practices in healthcare, where flexibility, rapid decision-
making, and supplier collaboration were crucial to 
maintaining supply continuity during unpredictable 
surges in demand.
Another significant historical driver behind CITO’s 
adoption in healthcare is the rising number of  drug 
shortages worldwide, which has become a persistent issue 
over the last decade. Studies note that these shortages have 
often been exacerbated by rigid supply chain processes 
unable to adapt to sudden demand spikes, manufacturing 
delays, or distribution bottlenecks (Elmiawati Latifah 
et al., 2023; Faizar et al., 2023). In this context, CITO 
emerged as an alternative strategy that enables healthcare 
organizations to rapidly source essential drugs from pre-
vetted suppliers, ensuring availability even in times of  
crisis. By doing so, CITO procurement helps to address 
the risks posed by drug shortages, allowing healthcare 
providers to maintain critical stock levels with less reliance 
on stockpiling.
The integration of  digital technologies has also played a 
pivotal role in CITO’s evolution. Early implementations 
relied heavily on manual systems and close supplier 
relationships, but advances in real-time tracking, 
predictive analytics, and data integration have allowed 
for a more systematic approach. Research shows that the 
adoption of  digital tools has enabled organizations to 
monitor supply levels more accurately, anticipate demand 
spikes, and make rapid adjustments, which are essential 
features of  the CITO model. The use of  these tools has 
expanded CITO’s capabilities, making it feasible not only 
for emergency scenarios but also for standard operations 
in sectors like pharmaceuticals, where supply chain 
disruptions can directly impact patient health (Aghniya, 

2022).
In summary, CITO’s initial applications were in fields 
requiring rapid response and supply continuity under 
high-stakes conditions. Its adoption in the healthcare 
sector has been more recent, driven by the need for 
agile procurement methods to address challenges such 
as drug shortages and emergency healthcare demands. 
Enhanced by digital tools, CITO continues to evolve, 
offering healthcare providers a more resilient and flexible 
approach to supply chain management in an increasingly 
complex global landscape.
The comparative analysis of  CITO and traditional 
procurement methods has become increasingly relevant 
in fields where supply chain agility and responsiveness 
are essential, such as healthcare and pharmaceuticals. 
This literature review synthesizes findings from recent 
studies, focusing on key themes including flexibility, cost 
efficiency, lead times, and risk management.
One of  the most widely cited benefits of  CITO over 
traditional procurement methods is its flexibility, 
particularly in environments with unpredictable 
demand. Lisman et al. (2023) emphasized that CITO 
allows organizations to meet sudden and critical 
demand through pre-established supplier relationships 
and expedited processes, a capability that traditional 
procurement lacks due to its reliance on fixed scheduling 
and bulk ordering. During the COVID-19 pandemic, 
for instance, CITO allowed healthcare organizations 
to secure essential items like PPE and ventilators more 
efficiently, whereas traditional systems struggled to adapt 
to rapidly fluctuating demand.
Similarly, Canova et al. (2024) underscore the importance 
of  CITO’s flexibility in healthcare, where demand 
unpredictability is common. The study found that 
CITO procurement models could quickly source 
critical medications and equipment, enabling healthcare 
facilities to maintain continuity in patient care even 
during unexpected surges. Traditional procurement’s 
rigid structures, in contrast, often led to stockouts and 
delays during the same period, highlighting the model’s 
limitations in dynamic, high-stakes environments.
Cost considerations in CITO versus traditional 
procurement methods are complex, with each approach 
offering different advantages depending on the nature 
of  the items being procured. Traditional procurement 
benefits from economies of  scale, as bulk purchasing and 
long-term contracts tend to lower unit costs. In contrast, 
CITO is often associated with higher per-unit costs 
due to its reliance on expedited shipping and flexible 
contracts. However, research (Tawarma & Marlina, 2023) 
found that CITO could be more cost-effective in critical 
supply scenarios, as it minimizes inventory holding costs 
and helps avoid the financial impacts of  stockouts.
The study highlighted that while traditional procurement 
can achieve cost savings on bulk items, CITO can reduce 
total costs in high-priority, time-sensitive scenarios by 
ensuring immediate availability and preventing costly 
delays. However, Elmiawati Latifah et al. (2023) cautions 



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that the cost benefits of  CITO depend on the criticality 
of  the item and the organization’s operational needs. 
For example, CITO is often more financially viable for 
essential, high-value items than for routine items that can 
be ordered in bulk at a lower cost per unit.
The ability of  CITO to reduce lead times is another 
major advantage highlighted in comparative studies. 
Traditional procurement models often involve extensive 
lead times due to the scheduled ordering processes and 
fixed inventory cycles that prioritize cost savings over 
speed. A study by Alshemari et al. (2020) found that CITO 
models could significantly cut lead times by minimizing 
intermediate steps and allowing for faster decision-
making processes. This advantage is especially relevant 
in sectors like healthcare, where the timely availability of  
critical supplies can directly impact patient outcomes.
The literature also shows that reduced lead times 
under CITO can help prevent stockouts and maintain 
supply continuity in high-demand situations. According 
to Jachowicz et al. (2020), healthcare organizations 
employing CITO procurement models experienced fewer 
disruptions in their supply chains during the pandemic 
than those that relied solely on traditional procurement. 
In contrast, organizations with traditional procurement 
models faced extensive delays, exacerbating shortages of  
critical supplies like medications and PPE.
Risk management is a vital consideration in the 
comparison of  CITO and traditional procurement. 
Traditional procurement models typically rely on long-
term relationships with a limited number of  suppliers, 
which can provide stability but may create vulnerabilities 
during global supply disruptions. CITO, however, 
mitigates this risk by maintaining a diversified supplier 
base that allows for rapid sourcing adjustments. As noted 
by Nikolaidou (2021), CITO’s resilience in the face of  
supply chain disruptions made it an invaluable model 
during the pandemic, where single-source dependencies 
often failed to meet demand spikes.
However, while CITO provides flexibility and risk 
mitigation through supplier diversity, it can also introduce 
quality assurance challenges. Study by Maria and Putri 
(2022) observed that rapid sourcing under CITO 
could lead to less rigorous vetting of  suppliers, raising 
the risk of  counterfeit or substandard products. This 
issue is particularly concerning in the pharmaceutical 
sector, where quality control is critical to patient safety. 
Traditional procurement, in contrast, typically allows 
more time for thorough supplier verification and quality 
assurance, making it more suitable for non-critical, 
bulk suppliesComparative studies indicate that CITO 
procurement offers significant advantages over traditional 
methods in terms of  flexibility, responsiveness, and 
reduced lead times, especially in critical and dynamic 
environments like healthcare. However, the benefits 
of  CITO come with trade-offs, including higher 
per-unit costs and potential risks related to quality 
assurance. Traditional procurement remains valuable 
for its cost-effectiveness and stability in predictable, 

high-volume orders. The literature suggests that an 
integrated approach, combining CITO’s flexibility with 
traditional procurement’s cost efficiency, could offer a 
balanced solution, enabling organizations to adapt their 
procurement strategies based on the specific requirements 
of  each item and situation (Rimadeni et al., 2024).
The adoption of  CITO procurement in the pharmaceutical 
and healthcare sectors has marked a notable shift from 
traditional procurement methods, impacting cost, lead 
times, and resource allocation in unique ways. This 
analysis examines these three primary impacts through 
recent studies and industry examples, highlighting both 
benefits and challenges associated with the CITO model.
CITO procurement’s impact on costs is complex, as it 
often involves a trade-off  between flexibility and expense. 
CITO typically incurs higher per-unit costs compared to 
traditional procurement because it relies on expedited 
sourcing and delivery. These additional expenses arise 
from premium fees for faster shipping, more dynamic 
supplier relationships, and pre-negotiated contracts that 
prioritize speed over cost efficiency.
For instance, Study found that while CITO procurement 
allowed hospitals to obtain essential medications quickly 
during shortages, it did so at a higher cost than traditional 
bulk orders, which typically benefit from economies of  
scale (Faizar et al., 2023). However, these costs can be 
partially offset by reducing expenses associated with 
stockouts, which can have direct financial and reputational 
impacts. Additionally, CITO’s ability to minimize inventory 
holding costs—since items are sourced as needed rather 
than stored in bulk—offers potential savings in storage 
and capital expenditures. Yusiana (2024) noted that while 
CITO incurs higher operational costs, it can ultimately 
prove more cost-effective in situations where immediate 
availability of  critical items is necessary. In these cases, 
the higher procurement costs are justified by the benefits 
of  avoiding delays that might impact patient care and 
outcomes.
A significant advantage of  CITO procurement is its 
impact on lead times. Unlike traditional procurement, 
which is often subject to long ordering cycles and 
approval processes, CITO is specifically designed to 
reduce lead times through streamlined sourcing and real-
time demand forecasting. CITO relies on pre-arranged 
agreements with suppliers, allowing healthcare providers 
to obtain essential items almost immediately. This quick 
turnaround is particularly valuable in healthcare, where 
delayed access to medications or equipment can have 
severe consequences on patient health outcomes.
Kusumaningrum and Mulyani (2023) highlighted that 
CITO models enabled hospitals to reduce lead times by 
up to 50% compared to traditional procurement methods. 
This reduction was particularly significant during the 
COVID-19 pandemic, where the ability to source PPE, 
ventilators, and critical medications promptly proved 
vital to maintaining continuity in patient care. Traditional 
procurement, in contrast, faced notable delays due to 
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impacting care quality.
Studies also show that shorter lead times in CITO models 
translate to more responsive supply chains capable of  
adapting to sudden spikes in demand. By reducing time-
to-delivery, CITO not only ensures timely availability 
of  essential items but also enhances an organization’s 
capacity to manage emergencies and fluctuations in 
demand more effectively. This advantage is increasingly 
critical in healthcare, where demand unpredictability is 
high, and patient needs can change rapidly.
Implementing CITO procurement has implications for 
resource allocation within organizations, especially in 
terms of  workforce and inventory management. With 
CITO’s emphasis on real-time demand tracking and 
rapid sourcing, organizations may require investments 
in technology and specialized personnel trained in 
agile procurement and supply chain management. The 
model relies on advanced data analytics and forecasting 
tools to optimize ordering and reduce the need for 
manual intervention, thus streamlining workflows but 
necessitating an initial investment in technology.
The adoption of  CITO can also lead to a shift in how 
resources are allocated across the supply chain. According 
to the Journal of  Business Logistics (2020), CITO models 
reduce the need for extensive warehousing and stockpiling, 
as items are procured as needed. This shift reduces 
inventory holding costs and allows for the reallocation of  
resources towards areas where rapid response capabilities 
are essential. However, the study also noted that CITO 
requires greater coordination and oversight to manage 
multiple supplier relationships effectively, which can place 
additional demands on procurement staff  and resources 
if  not managed properly.
Despite these challenges, CITO’s ability to optimize 
resource allocation by reducing excess inventory levels 
and minimizing wastage offers potential long-term 
benefits. By reallocating resources more effectively, 
organizations can focus on high-priority items, enhancing 
their responsiveness to patient needs while reducing the 
costs and risks associated with stockouts and overstock 
situations.
The impact of  CITO on cost, lead times, and resource 
allocation highlights its advantages in critical sectors 
like healthcare, where flexibility, speed, and precision in 
sourcing are paramount. While CITO’s higher per-unit 
costs may be a limitation, the reduction in lead times 
and optimized resource allocation provide clear benefits, 
particularly when timely access to essential medications 
is a priority. As supply chains become more complex 
and demand becomes increasingly unpredictable, 
CITO procurement offers a compelling alternative to 
traditional methods, balancing agility with operational 
efficiency. However, to maximize the benefits of  CITO, 
organizations may need to invest in advanced analytics, 
streamlined processes, and workforce training to manage 
the complexities of  this procurement model effectively.
Implementing CITO (Critical Item Time Order) 
procurement in the pharmaceutical industry introduces 

unique challenges, particularly in areas like regulatory 
compliance and risk management. Given the sector’s 
highly regulated environment and the need for meticulous 
oversight to ensure patient safety, adopting CITO 
procurement requires addressing several critical issues.
The pharmaceutical industry is among the most regulated 
globally, with strict requirements to ensure product 
quality, safety, and efficacy. For CITO procurement to 
be effective in this sector, organizations must navigate 
complex regulatory frameworks set by agencies like the 
U.S. FDA, European Medicines Agency (EMA), and 
other international regulatory bodies. These regulations 
mandate rigorous standards for product approval, 
traceability, and supplier qualifications, which can be 
challenging to meet when rapidly sourcing items through 
CITO.
A key challenge is ensuring that suppliers comply with 
Good Manufacturing Practices (GMP) and other 
standards, as failure to meet these requirements can 
lead to severe penalties, product recalls, and reputational 
damage. Rapidly engaging new suppliers under CITO 
may compromise the thorough validation processes 
needed to ensure adherence to these standards. Maria 
and Putri (2022) emphasize that while CITO’s speed 
can help address urgent needs, it also increases the risk 
of  regulatory non-compliance if  supplier vetting and 
product quality control are not rigorous.
Further, traceability and serialization requirements 
add complexity to CITO implementation. As noted by 
(Handayany and Basri 2022), the pharmaceutical sector 
must maintain end-to-end traceability to comply with 
regulations like the Drug Supply Chain Security Act 
(DSCSA) in the U.S. and Falsified Medicines Directive 
(FMD) in the EU. CITO’s rapid procurement may 
challenge these tracking processes, especially when 
multiple suppliers are involved, making it difficult to 
maintain accurate records and ensure the authenticity of  
products throughout the supply chain.
Risk management is crucial when implementing CITO 
procurement in pharmaceuticals, where product quality 
and timely delivery can directly impact patient safety. 
Traditional procurement methods allow for long-
term supplier relationships and comprehensive quality 
assurance measures, whereas CITO’s quick turnaround 
times can increase exposure to risks such as counterfeit 
drugs, supply chain disruptions, and quality control issues.
Counterfeit and substandard products are a significant 
risk in rapid procurement environments, especially in 
times of  high demand or crisis. According to Trapani 
et al. (2021), reliance on expedited sourcing may make 
pharmaceutical companies more vulnerable to fraudulent 
suppliers and counterfeit products, as the usual due 
diligence processes might be bypassed to meet urgent 
demands. The study found that without stringent risk 
assessment, CITO can lead to quality compromises that 
pose safety risks to patients.
Furthermore, supply chain disruptions are common 
in the pharmaceutical industry due to reliance on a 



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global network of  suppliers. CITO procurement, 
while fast, may involve sourcing from geographically 
distant suppliers, increasing exposure to risks from 
geopolitical issues, natural disasters, or pandemics. Rapid 
supplier onboarding under CITO also complicates risk 
management because new suppliers may not be fully 
integrated into the organization’s quality control and 
compliance systems. Tahir et al. (2020) suggests that 
while CITO can enhance responsiveness, it requires a 
comprehensive risk management framework to address 
these vulnerabilities effectively
Quality assurance is paramount in pharmaceuticals, as 
any lapse can have severe implications for patient safety. 
Traditional procurement models allow for in-depth 
supplier audits and quality inspections, but CITO’s 
rapid sourcing model limits the time available for these 
processes. The challenge, therefore, is to ensure that new 
suppliers meet the same quality standards as established 
partners, which requires a streamlined but robust 
validation process.
Faizar et al. (2023) highlights that inadequate supplier 
validation under CITO could lead to sourcing issues, 
including low-quality or ineffective drugs that do not 
meet clinical standards. Rapid sourcing often bypasses 
detailed quality checks, which may lead to non-
compliance with pharmacovigilance requirements—
regulations that mandate monitoring and reporting of  
product safety issues. Implementing CITO effectively in 
this context requires a dual approach that combines speed 
with stringent quality control to ensure all suppliers meet 
necessary regulatory standards.
In summary, while CITO offers advantages in terms 
of  responsiveness and flexibility, it also presents unique 
challenges in the pharmaceutical industry. Ensuring 
regulatory compliance, managing risks associated with 
rapid sourcing, and maintaining quality assurance require 
organizations to adopt new, agile approaches to supply 
chain management. For successful CITO implementation, 
companies must invest in robust compliance frameworks, 
enhanced supplier verification systems, and advanced 
tracking technologies. By addressing these challenges, 
pharmaceutical companies can harness the benefits of  
CITO without compromising regulatory standards or 
patient safety.

MATERIALS AND METHODS
This study explores the impact of  CITO (Critical Item 
Time Order) procurement on pharmaceutical supply 
chains using a mixed-methods approach, combining 
both quantitative and qualitative data. Data collection 
includes case studies across developed and developing 
healthcare markets, where CITO procurement’s effects 
on procurement lead times, cost efficiency, and drug 
availability are analyzed. By comparing these markets, 
the study identifies how varying regulatory and resource 
conditions influence CITO’s effectiveness. This dual 
analysis across diverse healthcare systems provides a 
comprehensive view of  how CITO operates under 

different economic and logistical constraints.
The research also includes qualitative insights 
from interviews with logistics managers at major 
pharmaceutical firms, providing a deeper understanding 
of  the operational challenges unique to CITO. These 
interviews shed light on complexities such as supplier 
onboarding, quality control, and compliance with strict 
industry regulations. Logistics managers discuss strategies 
for balancing the rapid response requirements of  CITO 
with rigorous regulatory demands, as well as the impact 
of  CITO on supply chain resilience, especially during 
emergencies like pandemics. These first-hand accounts 
offer essential context that complements the quantitative 
findings.
Ultimately, this mixed-methods approach enables a 
robust analysis of  CITO’s advantages and challenges. 
Quantitative data highlights measurable impacts, such 
as reduced lead times and adjusted cost structures, 
while qualitative data provides insight into the practical 
challenges and strategic solutions that logistics managers 
implement. Together, these findings contribute to the 
growing academic literature on procurement strategies in 
healthcare, suggesting that CITO, with careful regulatory 
and operational oversight, can improve the availability 
and timely delivery of  critical drugs in both high- and 
low-resource settings.

RESULTS AND DISCUSSIONS
Findings
CITO procurement strategies have increasingly shown 
promise in building resilient and effective partnerships 
between pharmaceutical companies and their suppliers. 
CITO’s holistic approach considers not only immediate 
costs but also long-term expenses, encouraging suppliers 
to invest in aspects like service reliability, adaptability, 
and risk mitigation across the lifecycle of  their contracts. 
This collaborative focus promotes enhanced supplier 
performance and accountability, aligning supplier 
incentives with pharmaceutical companies’ objectives to 
prevent disruptions and ensure the consistent availability 
of  medications. In pharmaceuticals, where delays can 
have critical repercussions, CITO’s emphasis on lifecycle 
value can help sustain smoother operations and optimize 
overall supply chain costs by addressing hidden costs, 
such as waste from excess inventory or penalties from 
delayed deliveries.
The COVID-19 pandemic underscored the importance 
of  adaptable, agile supplier relationships in the face of  
unprecedented disruptions. With demand surges, material 
shortages, and logistical bottlenecks, the pharmaceutical 
industry saw an urgent need forurgently needed rapid, 
real-time communication and cooperation with suppliers. 
CITO procurement facilitated this by using advanced 
digital tools for tracking and collaboration. Platforms 
utilizing IoT, blockchain, and predictive analytics allowed 
for real-time visibility into inventory, shipment tracking, 
and quality control, enabling suppliers and pharmaceutical 
companies to respond dynamically to changing conditions. 



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This digital integration was essential in managing global 
sourcing constraints, meeting fluctuating demand, and 
ensuring compliance with shifting regulatory standards.
Moreover, CITO promotes “triadic” collaborative 
models, where not only the pharmaceutical company and 
its supplier but sometimes a third party (such as a logistics 
provider or regulatory body) engage in coordinated 
efforts. These triads create a robust ecosystem that 
supports resilience and continuous improvement through 
shared goals, especially beneficial in managing upstream 
activities like R&D and clinical trials, which often involve 
complex, regulated materials. According to studies, 
such structures yield stability, operational effectiveness, 
and sustained quality. The triadic model’s collective 
accountability framework mitigates common risks like 
sole-source dependencies and quality discrepancies, 
making it ideal for handling unexpected crises and 
regulatory shifts. 
Through its focus on lifecycle costs and collaboration, 
CITO procurement ultimately provides a strategic 
advantage. Pharmaceutical companies can minimize 
delays, improve product quality, and increase 
adaptability—benefits that became critical during global 
health emergencies. By fostering a comprehensive 
view of  cost and value in supplier relationships, CITO 
procurement positions the pharmaceutical industry to 
better meet both current and future challenges in an ever-
evolving global marketplace.
Pharmaceutical companies that adopt CITO procurement 
practices benefit from a more resilient supply chain, 
largely due to its comprehensive focus on lifecycle cost 
management and long-term supplier reliability. This 
model enhances resilience by enabling companies to 
anticipate and manage risks through proactive strategies 
rather than reactive responses. By prioritizing secure, 
dependable supply sources over short-term savings, 
CITO empowers companies to engage in advanced 
planning and carefully prioritize essential drug supplies, 
which is critical in avoiding costly stockouts that could 
otherwise impact patient access to necessary medications.
One of  the key benefits of  CITO procurement is its 
emphasis on diversified sourcing and optimized inventory 
management, which significantly reduces the risks 
associated with single-source dependencies. Traditionally, 
reliance on sole suppliers has left pharmaceutical 
companies vulnerable to supply chain interruptions due 
to disruptions affecting a single entity. By diversifying 
their supply base, companies can better withstand 
unforeseen challenges such as raw material shortages or 
shifts in regulatory requirements. This ability to diversify 
effectively mitigates risks associated with external shocks, 
such as sudden demand surges during crises or regulatory 
shifts that could impact certain suppliers’ ability to deliver.
In addition to resilience, CITO procurement supports the 
formation of  more robust partnerships with suppliers, 
often based on shared goals of  quality, consistency, and 
long-term collaboration. These long-term relationships 
enable both the pharmaceutical company and its suppliers 

to align their strategic objectives, creating a cooperative 
environment that enhances responsiveness to market 
changes. For instance, during the COVID-19 pandemic, 
pharmaceutical companies that had implemented CITO 
procurement were better positioned to manage demand 
spikes for certain drugs due to their established, flexible 
supply base and collaborative supplier relationships. 
Suppliers, under CITO contracts, are often incentivized 
to maintain high-quality standards and reliability, further 
strengthening the entire supply chain.
In a rapidly changing regulatory landscape, CITO 
procurement also facilitates compliance and quality 
assurance. By establishing secure and stable supplier 
networks with reliable, compliant partners, companies 
are more capable of  meeting the stringent regulations 
that govern pharmaceutical supply chains globally. 
This proactive approach to procurement enables 
pharmaceutical companies to achieve both operational 
stability and agility, making it possible to meet critical 
demands even in challenging environments.
CITO procurement offers pharmaceutical firms a 
strategic advantage in managing procurement costs by 
emphasizing total ownership costs over direct purchase 
prices. By evaluating lifecycle costs—spanning sourcing, 
warehousing, quality control, and distribution—this 
approach enables firms to capture the true cost of  
procurement. This holistic model allows for smarter, 
more efficient cost management, even when securing 
high-quality raw materials and components that meet the 
rigorous standards of  pharmaceutical production.
Rather than emphasizing short-term cost reductions, 
CITO’s life-cycle perspective enables pharmaceutical 
companies to assess all costs associated with a supplier 
over the duration of  a contract, including indirect expenses 
like logistics, quality management, and compliance with 
regulatory requirements. This broader perspective allows 
for better planning and cost control by considering the 
total financial implications of  procurement decisions. 
For example, purchasing higher-quality materials upfront 
may reduce the need for quality control and rework 
later, lowering overall costs and improving production 
efficiency. This approach also aligns well with the quality 
standards required in pharmaceuticals, as companies 
must consistently deliver safe, effective medications.
Another advantage of  CITO procurement is its demand-
oriented inventory model, which aligns inventory levels 
with market demand to avoid costly excesses and reduce 
waste. By forecasting demand with greater precision, 
companies can manage inventory more dynamically, 
minimizing the holding costs and potential waste 
associated with overproduction. For example, during 
fluctuations in demand—such as seasonal increases in 
vaccine requirements or sudden surges during public 
health crises—CITO’s demand-oriented model ensures 
that firms maintain optimal stock levels, reducing waste 
from expired inventory and enabling faster responses to 
changes in demand.
Additionally, the cost efficiencies realized through CITO 



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procurement free up resources for strategic investments 
in innovation, drug development, and specialized supply 
chains. For pharmaceutical firms, these savings are 
essential as they enable reinvestment into R&D initiatives 
that drive growth and maintain competitive advantage. By 
optimizing cost structures, firms can allocate more capital 
toward high-impact areas, including the development of  
advanced medications, biologics, or targeted therapies. 
This reinvestment also enables companies to develop 
more specialized supply chains tailored to diverse 
product types—such as temperature-controlled logistics 
for biologics or specialized packaging for high-value 
medications—allowing them to maintain high standards 
across a broad product range and respond to varying 
regulatory requirements. In sum, CITO procurement not 
only supports cost reduction and operational efficiency 
but also aligns with long-term strategic goals, offering 
pharmaceutical firms the flexibility to balance cost 
control with the need for high quality and responsiveness 
to market demand.
CITO procurement strategies play a critical role in 
enabling pharmaceutical companies to meet the stringent 
regulatory demands required for global compliance 
with quality and safety standards. Unlike traditional 
procurement models focused primarily on reducing 
purchase prices, CITO considers the entire lifecycle of  
costs, quality, and compliance. This approach ensures 
that suppliers are selected and managed with an eye on 
consistent adherence to Good Manufacturing Practices 
(GMP) and Good Distribution Practices (GDP), which 
are essential for maintaining product integrity across 
storage, transportation, and final delivery to patients. 
Compliance with these practices is especially important 
for pharmaceutical companies, as it minimizes risks 
of  contamination, ensures temperature control where 
needed, and maintains product traceability, all of  which 
are critical under regulations set by entities like the FDA 
in the United States, EMA in Europe, and other national 
health authorities globally.
One significant advantage of  CITO procurement in 
this context is its capacity to streamline documentation 
and compliance tracking. In the heavily regulated 
pharmaceutical sector, regulatory bodies require detailed 
records that demonstrate a consistent history of  
compliance with quality standards. CITO’s emphasis on 
transparency and long-term partnership with suppliers 
enhances documentation by fostering data-sharing 
agreements, automated compliance reporting, and real-
time tracking capabilities, typically through advanced 
digital platforms like blockchain and IoT solutions. 
These technologies not only ensure traceability from raw 
materials to finished products but also support rapid, 
efficient audits by regulatory agencies. This streamlined 
data collection strengthens trust with regulatory bodies, 
enabling a smoother approval process across multiple 
regions by providing robust, easily accessible compliance 
documentation.
Furthermore, CITO’s comprehensive cost and quality focus 

also mitigates the risk of  supply chain disruptions due to 
regulatory non-compliance, which can lead to costly recalls, 
production stoppages, or even bans on sales in certain 
markets. By ensuring that suppliers maintain rigorous quality 
control and regulatory alignment, CITO procurement 
helps companies preemptively address compliance issues. 
For instance, implementing serialization standards to 
prevent counterfeiting or meeting pharmacovigilance 
requirements to monitor and report adverse events post-
market are now common compliance challenges. Through 
CITO’s structured approach to lifecycle management, 
these requirements are more efficiently integrated into the 
supply chain, reducing compliance risks and improving 
overall operational stability.
Beyond risk mitigation, the CITO model’s support for 
regulatory compliance aligns well with pharmaceutical 
companies’ long-term objectives. By building a solid 
reputation for compliance, companies are able to expand 
their reach into multiple markets, including emerging ones 
where adherence to international standards is increasingly 
required. This reputation can enhance competitive 
positioning, facilitating not only faster market entry but 
also cost efficiencies related to reduced regulatory delays 
and fewer legal risks. As a result, the compliance benefits 
of  CITO allow companies to allocate more resources 
to innovation and high-impact R&D activities that 
are central to advancing pharmaceutical development. 
Thus, CITO procurement not only ensures a resilient, 
compliant supply chain but also frees up capital for 
innovation, which is essential for sustainable growth in 
the pharmaceutical sector.
Overall, by focusing on total cost, quality, and compliance 
from a lifecycle perspective, CITO procurement 
strategies help pharmaceutical firms navigate the complex 
regulatory landscape with greater agility and assurance. 
This approach is integral to maintaining high standards 
across a global supply network, meeting the stringent 
demands of  national and international regulatory bodies, 
and building trust in the safety and efficacy of  the 
pharmaceutical supply chain.
The findings highlight that CITO procurement 
represents a significant evolution in pharmaceutical 
supply chain management, offering a more integrated, 
strategic, and risk-averse approach. By emphasizing long-
term collaboration between pharmaceutical companies 
and their suppliers, CITO fosters adaptability and 
resilience in the face of  both routine operations and crisis 
situations. For example, during the COVID-19 pandemic, 
pharmaceutical firms that had already implemented 
CITO procurement practices were better equipped to 
respond to the sharp surge in demand for critical drugs 
like vaccines and antiviral medications. Companies 
leveraging CITO’s strategic foresight were able to quickly 
adjust procurement strategies, ensure stock availability, 
and navigate supply disruptions. This demonstrates how 
CITO procurement plays a crucial role in ensuring that 
pharmaceutical companies are not only prepared for day-
to-day operations but also equipped to handle unforeseen 



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supply chain shocks.
In addition, CITO procurement supports the broader 
trend of  digital transformation within the pharmaceutical 
industry, enhancing its ability to respond to complex and 
dynamic market conditions. Technologies like advanced 
analytics, predictive modeling, and real-time data sharing 
provide pharmaceutical companies with the tools to 
proactively manage their supply chains. Predictive models 
can identify potential disruptions or supply gaps before 
they occur, allowing companies to adjust procurement 
strategies and mitigate risks such as stockouts or delays. 
For instance, leveraging the Internet of  Things (IoT) 
to track shipments in real time can offer visibility into 
product conditions and delivery schedules, ensuring 
that drugs are delivered on time and under the right 
conditions. Similarly, blockchain technology can help 
ensure product traceability and combat counterfeiting, 
offering added security and compliance in an increasingly 
complex regulatory landscape.
The flexibility of  CITO procurement also enables 
pharmaceutical firms to tailor their supply chains to 
different product categories, optimizing processes for 
both high-complexity, high-margin products and more 
standardized, low-cost medications. For example, biologic 
drugs, which require specialized temperature-controlled 
environments throughout their supply chains, benefit from 
CITO’s focus on end-to-end collaboration with suppliers. 
On the other hand, generic drugs can be managed with 
more cost-efficient models without compromising the 
quality or timeliness of  delivery. This adaptability ensures 
that a company can meet the needs of  diverse product lines 
while maintaining cost efficiency, regulatory compliance, 
and high standards of  patient care.
However, implementing CITO procurement within 
the pharmaceutical sector does come with challenges, 
primarily due to the complexity of  the industry’s 
regulatory environment. Complying with national and 
international standards such as Good Manufacturing 
Practices (GMP) and Good Distribution Practices (GDP) 
requires careful coordination and robust documentation 
processes. Furthermore, the upfront investment needed 
for digital transformation—such as implementing 
advanced technologies, retraining staff, and enhancing 
data infrastructure—can be substantial. Despite these 
challenges, the long-term benefits of  CITO procurement 
far outweigh the initial costs. These benefits include 
enhanced operational efficiency, better risk management, 
stronger supplier relationships, and ultimately, improved 
patient access to medicines. Companies that invest in CITO 
procurement can achieve sustained competitive advantages 
by becoming more agile, compliant, and cost-efficient.
In conclusion, CITO procurement offers a comprehensive 
framework that not only addresses current challenges 
in the pharmaceutical supply chain but also positions 
companies for long-term success. By fostering deeper 
supplier collaboration, enabling digital transformation, 
and enhancing resilience, CITO procurement helps 
pharmaceutical firms navigate an increasingly complex 
and fast-evolving landscape. This approach ultimately 

leads to improved operational efficiency, enhanced 
regulatory compliance, and more timely access to 
essential medications, which benefits both pharmaceutical 
companies and the patients they serve.

CONCLUSION
The primary findings of  this study indicate that CITO 
procurement has significant potential to enhance the 
efficiency of  pharmaceutical supply chains, particularly 
in terms of  cost reduction, lead time optimization, and 
improved resource allocation. Through direct comparison 
with traditional procurement methods, CITO has been 
shown to shorten procurement cycles, reducing the 
risk of  stockouts for critical medications by improving 
responsiveness in high-demand or emergency situations. 
These improvements are increasingly vital in the face 
of  global supply chain challenges that have intensified 
since the COVID-19 pandemic. Furthermore, CITO’s 
focus on real-time data and agile supplier relationships 
helps mitigate risks related to sudden demand shifts and 
supply interruptions, providing a level of  flexibility that 
traditional procurement methods often lack.
One of  the key benefits of  CITO in healthcare is its 
capability to manage complex regulatory requirements 
more dynamically. The pharmaceutical industry faces 
strict compliance mandates that can delay traditional 
procurement timelines; however, CITO’s ability to 
streamline processes and improve supplier collaboration 
supports compliance without compromising delivery 
speed. Digital innovations like IoT-enabled tracking and 
data analytics enhance transparency and reduce delays 
associated with regulatory compliance, making CITO 
a more resilient approach for meeting the healthcare 
sector’s urgent needs.
Future research should explore the long-term implications 
of  CITO on pharmaceutical cost structures and patient 
outcomes. Additional studies on how CITO can support 
sustainability in procurement—by optimizing inventory 
and reducing waste—would add valuable insights. 
Given the increasing focus on supply chain resilience, 
investigating the role of  CITO in predictive analytics and 
AI could also be beneficial for preparing for potential 
disruptions in the global pharmaceutical supply chain. 
This direction aligns with recent calls in the industry to 
integrate more advanced technologies and strategies for 
agile, secure, and sustainable supply chains.
CITO procurement plays a crucial role in ensuring that 
life-saving medications reach patients in a timely manner. 
Despite the increased costs associated with this approach, 
the improved patient outcomes highlight its value in critical 
care scenarios. Future research should focus on developing 
cost-effective CITO strategies and exploring the potential 
of  AI-driven forecasting to predict demand spikes, thereby 
enabling more efficient procurement decisions.

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