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Webinar Hosted by Pharmaceutical Manufacturing
Wednesday, November 7 2012
Presented by Hedley Rees, Biotech PharmaFlow
Agenda
 What is behind the ‘supply chain heat’
 Where do contractors fit in?
 Management strategies based on segmentation
 The procurement cycle
 Building a foundation for the future
Where is the heat coming from?
 Shortages……
 Economically motivated adulteration……
 Recalls…..
 Cost of Goods issues…
 Counterfeiting…..
 Theft…..
 Diversion…..
The fall-out….
 Crippling impacts in the areas of patient safety,
brand image and reputation, costs of remediation,
customer service and investor confidence.
A UNIVERSAL CRY FOR CHANGE!
 From regulators, governments, other competent
authorities and patient advocacy groups.
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Stakeholders pile in….
 …EU implements Falsified Medicines Directive.
 …EMA consults on dramatic tightening of GDP/GMP
 …FDA pens “Pathway to Global Safety and Quality”.
 …President Obama wades in on drug shortages.
 …US HELP Congressional Committee consults.
 …US Pharmacopeia consults on new Chapter < 1083 >.
 …PEW Charitable Trust writes report “After Heparin”.
 …GS1 Global Traceability Standard for Healthcare (GTSH).
 …FDA Safety and Innovation Act (FDASIA), Title VII
Roles in the Pharma Supply Chain
Responsible for
supply chain
The Scope of Contractual Relationships
•Qualification/validation work for premises
• Maintenance /calibration of equipment
• Storage and distribution
• Artwork generation and print ready
material
• Assessment and sourcing of starting and
packaging materials
•QP and other professional services
such as GMP audits of suppliers
Washing/depyrogenation/sterilisati
on of packaging materials used in
manufacture.
• Hosting of IT functions
• Document archiving and storage
Ref: GMP/GDP INSPECTORS WORKING GROUP
GMP/GDP IWG
Document Ref: EMEA/INS/GMP/648678/2009
Dis-integration of the supply chain
Outsourcing begins in earnest…..
Patients
Contractor Management in Context
 Immensely complex interactions.
 Relationships are 3rd party.
 Contractually driven.
 Power and dependence.
 Management by Segment.
Procurement Portfolio
High
Leverage
Financial
Relevance
Strategic
Portfolio
Routine
Bottleneck
Low
Complexity of Supply Market
Many Suppliers
Single Supplier
Based on Kraljic Matrix, HBR 1983
Procurement Portfolio Management
Leverage
Strategic
Exploit
Build relationships
Negotiate hard
Seek innovation
Regular tendering
Joint investments
High
Financial
Relevance
Low
PORTFOLIO
Routine
Bottleneck
Automate
Mitigate risk
Standardise
Change design
Empower users
Alternate source
Complexity of Supply Market
Many Suppliers
Single Supplier
Figure 1 A segmentation approach based on Kraljic Matrix
The Procurement Cycle – Strategic Segment
• User Driven
• Team based
Specify • Request for Proposal
Select
• Involvement of stakeholders
• Decision making process
• Business benefits
• Agreements – Supply, Quality & Technical, Service level
• Processes for working together
Commit • Information sharing
• Regular reviews
• Metrics
Perform • Continuous improvement
It starts in early stage development…
Analytical Methods
Building successful contractor partnerships
Robust Supply
Base
• cGXP compliant
• Capable
processes
• Commercially
viable
• Organisationally
mature
• Culturally
congruent
Inclusive planning
process
• Defined envelope
of uncertainty
• Adequate
capacity
• Appropriate scale
• Thorough risk
assessments
• Sourcing and
Inventory policy
Sound
Agreements
• Procurement
cycle
• Supply
• QTA
• Service level
Process Driven
• End-to-end
• Allocation of
responsibilities
• Change control
• Metrics
Thank You