0
11.35 – 12.35
Beyond Account Management
Leveraging Pharma supply-base
capabilities to co-create value in the
broader Healt...
Beyond Procurement
the next step towards Productivity Excellence

Detlef Behrens
Giles Breault
Thilo Jaeckel
Sammy Rashed
...
Presentation Overview
1- Back ground
2- Highlights of “Beyond Procurement” global study
3- Moving beyond SRM – Trading Rel...
1- Back ground
2- Highlights of “Beyond Procurement” global study
3- Moving beyond SRM – Trading Relationship Management
§...
Procurement Transformation
Understanding drivers and direction
§  G r o w i n g e x p e c t a t i o n s f r o m m a n a g...
“Beyond Procurement” Roadmap
Our initiative spans professions and geographies
FOCUS GROUP
•  Wo r k s h o p s e r i e s
th...
1- Back ground
2- Highlights of “Beyond Procurement” global study
3- Moving beyond SRM – Trading Relationship Management
§...
Evolution of productivity and its drivers
Procurement's past success can limit future contribution
Path to master the prod...
Identified “Top Ten Options”
For Procurement to drive company-wide productivity, and
beyond
Board
Agenda

SUPPLIER

Who

B...
Evaluating growth options
Sur vey results – Performance scale
Survey

Survey outcome: Importance rating

Four main product...
1

Top-Line contributor

6

Take over operations

Evaluating growth options

2

Sourcing Innovation

7

Collaborative Buyi...
Top-Line contributor

Org.
readiness

Take over operations

Embed function

Total Cost-Based Mgmt

Collaborative Buying

G...
Evaluating growth options

1

Top-Line contributor

6

Take over operations

2

Sourcing Innovation

7

Collaborative Buyi...
Deep-Dive: SRM as Value-Creation
Created «Productivity in Pharma» think tank, combining
i n d u s t r y, a c a d e m i a ,...
1- Back ground
2- Highlights of “Beyond Procurement” global study
3- Moving beyond SRM – Trading Relationship Management
§...
Value-Flow
L o o k i n g u p s t r e a m and e x t e r n a l l y

Patient

Physicians

Supplier

Buyer

D
P
C
G

Prescribe...
Why are value based relationships so
difficult for Big Pharma?
Focus on Cost Savings - “We just can’t seem to escape this ...
The Relationship Map
Current Relationships force Commodisation
2

1

Commercial Transaction

Supplier

Commercial Transact...
The Relationship Map
The Buyer & Supplier sell to the ultimate customer
2

1

Commercial Transaction

Supplier

Buyer

Cus...
TRM Canvas ©
Tra d i n g R e l a ti o n sh i p Ma n a g e me n t: th e Buyer ’s view

Seek & Share

3

Supplier

20

2

1
...
“The new world of old Pharma”
Tra n sfo rma ti o n Th e me s i n o n e p a g e !
Macro	
  Economic	
  Influences	
  
•  Hea...
The value-chain feeding into Healthcare
Tr e n d s f l o w i n g f r o m s y s t e m c r e a t e c h a l l e n g e s a n d...
Production
Key C hallenges & Opportunities from b r e a k o u t session
To p o p t i o n s
1.  N e e d g r e a t e r a g i...
Demand Volatility
How to deal with variability and uncertainty?

Volume

Example 1

Example 2

Forecast

Risk zone

§  Ac...
Ex 1: Gaining visibility
Providing visibility & solid planning horizon
§  How do we achieve reliable and sustainable supp...
Ex 1: Gaining visibility
R e q u i r e s a mindset shift
Drivers
§  Always late, reacting
instead of pro-acting
§  Cost ...
CMO Perspective on the Roche
outsourcing model
§  Very unique and advanced model
§  Allows maximum planning at CMO
§  W...
Case Study A: Delivering supply chain
value proposition (“Agility”)
Formulation
supply to EU

Key starting material
(KSM) ...
Ex 2: Achieving agility
U n p r e d i c t a b l e d e m a n d on short notice
XXX

Panic zone

Volume

Issue
§  Baseload ...
Ex 2: Achieving agility
Stand on many feet
Need
§  Fully loaded SC, keeping intermediate inventory on all stages
§  30+ ...
Ex 2: Achieving agility
C o n t r i b u t i n g factors

Additional complexity
§  Not single or dual sourced, but
sometim...
Ex 2: Achieving agility
Value creation a c h i e v e d by e n s u r i n g h i g h - m a t u r i t y
i n e v e r y dimensio...
Case Study B: Ensuring reliability
of supply
Customer need
•  Maintenance of 99% in-stock position for more than 500 SKUs
...
Pharma 3.0 – a New Paradigm
¡  With this kind of changes we need to rethink about our supply
chain and outsourcing models...
1- Back ground
2- Highlights of “Beyond Procurement” global study
3- Moving beyond SRM – Trading Relationship Management
§...
Transformational program foundation elements
A structured path to accelerating delivery of productivity
Select option(s) -...
1- Back ground
2- Highlights of “Beyond Procurement” global study
3- Moving beyond SRM – Trading Relationship Management
§...
Staying engaged
Four distinct, integrated areas of activities
Knowledge
 
https://www.surveymonkey.com/s/bpsuk
Research
&
...
Huge opportunities to do more
But first need to step up…

“You miss 100%
of the shots you
don’t take”
- Wayne Gretzky

39
Huge opportunities to do more
…and build a solution to tomorrow’s problems

“Skate to where
the puck is going
– not where ...
Q&A
Seek & Share

3

Supplier

42

2

1

Customer

Buyer

4

Assess

Understand

Translate

5

Select & Implement

6

Communic...
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Pharma Integrates 2013 - Beyond Account Management

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Beyond Account Management. Leveraging Pharma supply-base capabilities to co-create value in the broader Healthcare sector
A presentation at Pharma Integrates 2013, an event for senior management in the pharmaceutical industry created and run by Life Sciences Index.

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Transcript of "Pharma Integrates 2013 - Beyond Account Management"

  1. 1. 11.35 – 12.35 Beyond Account Management Leveraging Pharma supply-base capabilities to co-create value in the broader Healthcare sector Sammy Rashed Speakers include: Detlef Thilo Behrens Jaeckel Giles Breault
  2. 2. Beyond Procurement the next step towards Productivity Excellence Detlef Behrens Giles Breault Thilo Jaeckel Sammy Rashed London, November 2013
  3. 3. Presentation Overview 1- Back ground 2- Highlights of “Beyond Procurement” global study 3- Moving beyond SRM – Trading Relationship Management §  §  §  §  Customer’s view: Healthcare challenges and the impact on Pharma Management view: Key challenges & opportunities for Manufacturing Buyer’s view: 2 case studies from Roche Supplier’s view: Raising the play by Piramal 4- Implementation over view 5- Staying engaged / Q&A 3
  4. 4. 1- Back ground 2- Highlights of “Beyond Procurement” global study 3- Moving beyond SRM – Trading Relationship Management §  §  §  §  Healthcare challenges and the impact on Pharma Key challenges & opportunities for Manufacturing The buyer’s view: 2 case studies from Roche Raising the play: Piramal’s offer 4- Implementation over view 5- Staying engaged / Q&A 4
  5. 5. Procurement Transformation Understanding drivers and direction §  G r o w i n g e x p e c t a t i o n s f r o m m a n a g e m e n t , a n d h i g h e r aspirations from Procurement professionals §  K e y c h a n g e s i n r e s p o n s i b i l i t y a n d p o s i t i o n i n g Historical process §  Spend penetration §  Process compliance §  Tactical negotiation with suppliers §  Short-term savings §  Reactive stand-alone role §  Concentrated on back-end Current direction §  Spend optimization §  Process efficiency §  Driving demand mgmt with users §  Multi-year savings plan §  X-functional project leadership §  Early decision involvement §  B r o a d t h e m e : M o v e f r o m C a t e g o r y M a n a g e m e n t t o Va l u e c o creation §  N o t o n l y o n e s o l u t i o n … n e e d t o p r i o r i t i z e o p t i o n s a l o n g t w o dimensions: performance and feasibility 5
  6. 6. “Beyond Procurement” Roadmap Our initiative spans professions and geographies FOCUS GROUP •  Wo r k s h o p s e r i e s throughout 2011 with various contributors from academia and different industries/ companies, a.o. P f i z e r, S a n o f i , B a y e r, Linde, Novartis, UniCredit ACADEMIC RESEARCH •  C l o s e c o l l a b o r a t i o n with EBS University on initial research; e.g. Innovation Sourcing •  D e e p e r r e s e a r c h w i t h Te c h n i c a l U n i v e r s i t y o f Munich to identify top options by industr y and geography SURVEY •  P r i o r i t i z a t i o n o f t o p options for procurement •  > 1 0 0 p a r t i c i p a n t s across the world, now being conducted in 15+ separate markets PRACTITIONER DISCUSSIONS •  P r e s e n t a t i o n s a n d workshop on “Beyond Procurement” at dozens of CPO/CFO conferences throughout 2011/1 2 Giles Breault 6 Michael Henke Daniel Hollos Matthias Kasser Sammy Rashed
  7. 7. 1- Back ground 2- Highlights of “Beyond Procurement” global study 3- Moving beyond SRM – Trading Relationship Management §  §  §  §  Healthcare challenges and the impact on Pharma Key challenges & opportunities for Manufacturing The buyer’s view: 2 case studies from Roche Raising the play: Piramal’s offer 4- Implementation over view 5- Staying engaged / Q&A 7
  8. 8. Evolution of productivity and its drivers Procurement's past success can limit future contribution Path to master the productivity /cost challenge II Strategic procurement I Traditional purchasing Goals ▪  ▪  Key levers ▪  ▪  ▪  ▪  ▪  Secure stable supply at right price Ensure compliance Centralize process Efficient transactions Local buying Little or no category management Process focus ▪  III Spend Optimization ▪  Generate savings ▪  ▪  ▪  ▪  ▪  ▪  Category management Aggregate global/ regional volume Long-term agreements Maximal use of automated tendering External focus ▪  ▪  Generate higher returns per dollar spend Drive demand management (what you buy) Process Management (how you buy) Internal focus IV What's Next? ▪  Optimize costs/value generation across businesses Top options identified 1 •  •  2 •  3 Top Line Contributor Innovation Sourcing Total Cost-Base Management 4 •  Comprehensive Risk management •  5 •  6 Global Business Services Take over operational activities •  7 8 •  Process & Systems 8 Skills Acceptance Next Level ”Collaborative Buying” Internal Consultant/ Project Managers 9 •  •  10 SRM as Value Creation Embed function into business
  9. 9. Identified “Top Ten Options” For Procurement to drive company-wide productivity, and beyond Board Agenda SUPPLIER Who Beyond Procurement Options Productivity Innovation BUYER 2 Innovation Sourcing 3 Total CostBase Management 6 Take over operational activities 9 SRM as value creation 4 Global business services 7 “Next level” collaborative buying 5 Comprehensive risk management Internal consulting / 8 Project management 10 9 Embed function into business Growth CUSTOMER 1 Top-line contributor
  10. 10. Evaluating growth options Sur vey results – Performance scale Survey Survey outcome: Importance rating Four main productivity options to pursue Today The champions To p - L i n e Contributor ▪  ▪  >100 participants from various industries and functions (procurement, finance, and other business stakeholders) Across Europe, North America, and Asia 50 Sourcing innovation Comp. Risk Mgmt Ta k e o v e r operations Next-Level Collab. Buying 40 87 To t a l C o s t - B a s e Mgmt Global Bus. Services Int. consultant/PM 88 57 48 58 8 38 15 0 0 E m b e d Fu n c t i o n into bus 19 34 13 1 Based on implementation priority and return performance 2 Total Cost Base Management Continuing to deliver high returns of ~5%, participants still highly value GBS, but do not expect further implementation efforts 18 44 Both options Sourcing Innovation and TCBM2 rank amongst the highest in terms of implementation priority as well as actual / expected return (ranging from 4 – 5 %); today as well as in the future1 The veteran 0 Extended SRM 10 Future 58 27 The newcomer Extended SRM shows the highest increase in importance. An average return of ~5% ist expected from this option Option with highest return expectation in Pharma Industry
  11. 11. 1 Top-Line contributor 6 Take over operations Evaluating growth options 2 Sourcing Innovation 7 Collaborative Buying 3 Total Cost-Based Mgmt 8 Internal Consulting Sur vey r e sults - Fe asibility scale 4 5 4 Org. readiness Can the capability be developed? GBS Risk Management 9 10 Ext. SRM Embed function Own & drive 5 2 3 4 1 3 10 6 8 9 7 Don’t invest 2 2 11 Can the business need be grown? 3 Capability proficiency 4
  12. 12. Top-Line contributor Org. readiness Take over operations Embed function Total Cost-Based Mgmt Collaborative Buying GBS 5 Ext. SRM Sourcing Innovation 2 x 2 by function Risk Management Internal Consulting Procurement COO/CEO Needs convincing Undecided? 4 3 2 1 5 Business stakeholder Finance Stay focused! 4 3 We need more 2 1 1 12 2 3 4 5 1 2 3 4 5 Capability proficiency
  13. 13. Evaluating growth options 1 Top-Line contributor 6 Take over operations 2 Sourcing Innovation 7 Collaborative Buying Changes in 2013 Pharma results vs. 2012 Global Survey results – Feasibility 3 Total Cost-Based Mgmt 8 Internal Consulting 4 GBS 9 Ext. SRM 5 Risk Management X X 4 Org. readiness 3 4 6 7 9 Embed function Deemed more feasible: •  Sourcing Innovation •  Total Cost-Base Mgmt •  SRM as value-creation •  Take over operations 5 2 10 2 3 1 5 3 6 4 1 10 8 4 10 8 9 7 2 2 13 3 Capability proficiency 4
  14. 14. Deep-Dive: SRM as Value-Creation Created «Productivity in Pharma» think tank, combining i n d u s t r y, a c a d e m i a , a n d e x p e r t s Participants Academia & Partners       ¡  S m a l l g r o u p o f i n v i t e d s e n i o r b u s i n e s s l e a d e r s f r o m P r o c u r e m e n t ¡  P a r t i c i p a n t s f r o m l a r g e / m e d i u m / s m a l l s i z e P h a r m a c o m p a n i e s ¡  S e r i e s o f t h r e e 1 - d a y w o r k s h o p s f o c u s i n g o n l e a d q u e s t i o n : “What are the key challenges & opportunities in the healthcare sector and pharmaceutical industry, and how to address by better leveraging the unique capabilities within our supply base” 14
  15. 15. 1- Back ground 2- Highlights of “Beyond Procurement” global study 3- Moving beyond SRM – Trading Relationship Management §  §  §  §  Healthcare challenges and the impact on Pharma Key challenges & opportunities for Manufacturing The buyer’s view: 2 case studies from Roche Raising the play: Piramal’s offer 4- Implementation over view 5- Staying engaged / Q&A 15
  16. 16. Value-Flow L o o k i n g u p s t r e a m and e x t e r n a l l y Patient Physicians Supplier Buyer D P C G Prescribers Provider Payors 16
  17. 17. Why are value based relationships so difficult for Big Pharma? Focus on Cost Savings - “We just can’t seem to escape this without recognising that what we want to achieve is a route to lower costs, not only a route to lower prices” Metrics management – “Of course we need to measure the performance of our most important suppliers, but this “crowds out” a much more important dialogue” Control vs. Collaboration – “Our systems do not encourage suppliers to evaluate us as customers of choice who actively are seeking innovation and co-created value” No Priority / No time – “Our own buyers often have neither the time nor the knowledge to manage a deeper discussion with our most important suppliers” 17
  18. 18. The Relationship Map Current Relationships force Commodisation 2 1 Commercial Transaction Supplier Commercial Transaction Pharma 3 Customer 4 Buyer and Seller collaboration is reduced to competitive performance on specification (commodity) •  Relationship is Price not Value based •  Little understanding of the ultimate customer need 18
  19. 19. The Relationship Map The Buyer & Supplier sell to the ultimate customer 2 1 Commercial Transaction Supplier Buyer Customer Value-Added Services 4 3 Buyer and Seller are collaborating on how to meet the needs of the ultimate customer? •  Understanding the need •  Creating a Set of Services that increases the buyer’s and ultimate customer’s perception of value •  Mutual Dependency 19
  20. 20. TRM Canvas © Tra d i n g R e l a ti o n sh i p Ma n a g e me n t: th e Buyer ’s view Seek & Share 3 Supplier 20 2 1 Customer Buyer 4 Assess Understand Translate 5 Select & Implement Value generation 6 Communicate
  21. 21. “The new world of old Pharma” Tra n sfo rma ti o n Th e me s i n o n e p a g e ! Macro  Economic  Influences   •  Healthcare  costs  rising  faster  than  GDP  in  many  countries   •  Mature  market  payers  (Governments  and  Payers)  forcing  generic  subsDtuDon  for  long  standing  therapies  and  requiring  evidence  of   outcomes  in  return  for  paying  higher  prices  for  specialized  therapies   •  Emerging  market  demand  rising  sharply    -­‐  need  for  product  at  the  right  cost  for  growing  economies   Shi$ing  global  markets   Changing  Product   Por=olios   Customer  Engagement   RevoluDon   New  Markets:   Replace  Products:   New  Customers:     New  price  points:   Rise  of  generics:   New  Technologies:     •  Generic  growth  in  mature  and   emerging  markets   •  M&A  in  developing  economies   •  Digital/cloud,  Shi]ing  from  sales   reps  available  from   9.00am-­‐4.00pm  to  mul@  channel   engagement  (web,  mobile  apps,   call  centres,  video)   •  BRIC  into  top  10    by  2016   •  UK  &  Spain  drop  out  of  top  10   •  15%-­‐20%  price  reduc@on  in  top   line  product  sales  in  the  markets   growing  at  +20%   •  Slow  down  of  growth  to  1%-­‐3%  in   mature  markets   New  Supply  chain  models:   •  West  to  East  movement  of  supply   chain   •  Need  to  operate  global  supply  to   service  growing  market  needs   •  Increased  use  of  contract   manufacturers  driving  need  for   more  orchestrated  supply  chain   control   21 •  Pressure  to  replace  lost  revenues   •  1.3bn  new  pa@ents   •  1.27m  more  doctors   from  products  off  patents   Rise  of  specialty  products:   •  Switch  from  mass  market   blockbusters  to  more  specialized   drugs  in  mature  markets   •  R&D  driven  at  more  niche   therapies  with  innova@ve   medicines   •  Requirement  for  evidence  of   outcomes/efficacy  for   reimbursement  for  new  drugs   coming  on  the  market   •  Rise  of  Social  Channels:  Physician   Sites  (e.g.  Sermo.com,   haoyisheng.cn)  pa@ent  sites     (e.g.  pa@entslikeme.com)   Source: Accenture Changing  cost  base   EBIT  and  SG&A  changes:   •  Shi]ing  por`olios  to  a  mixture  of   generic  and  patented  products   result  in  a  lower  EBIT  for  many   companies   •  Pressure  to  reduce  SG&A  in  line   with  new  product  por`olios     •  Need  for  investment  in  new   geographies  and  new  product   areas  puts  more  pressure  on  core   back  office  op@miza@on  
  22. 22. The value-chain feeding into Healthcare Tr e n d s f l o w i n g f r o m s y s t e m c r e a t e c h a l l e n g e s a n d o p p o r t u n i t i e s at all levels Volume Healthcare System Mega trends & Factors Pharmaceutical Industry Shifting Global Markets Changing Product Portfolio Quality Costs Customer Engagement Revolution Changing Cost Base Changing Commercial Model Development Production Commercial G&A Key Challenges & Opportunities •  Time to market •  Study efficiency in market •  More output / faster fails •  Greater agility •  Commercial (not capacity) drive invest. •  Manufacturabi lity of complex products •  Shifting markets & channels •  Value-Based outcomes •  Product launch •  Regulations •  Demonstrate increased value •  Reduce cost •  Culture Supplier Base •  xxx •  xxx •  … •  xxx •  xxx •  … •  xxx •  xxx •  … •  xxx •  xxx •  … Unique Capabilities to address unmet need 22
  23. 23. Production Key C hallenges & Opportunities from b r e a k o u t session To p o p t i o n s 1.  N e e d g r e a t e r a g i l i t y i n r e s p o n s e t o g r e a t e r u n c e r t a i n t y §  Switch from efficiency to effectiveness (flexibility) §  Need to maintain quality despite improving productivity §  Opportunity to outsource (not large PH's core competency) 2.  Decisions to build plants follow legislative / investment considerations (e.g. China, Russia) Other brainstormed ¡  M f g h i s t o r i c a l l y d o i n g l a r g e v o l u m e p r o d u c t s ( b i o ’s ) : now will need to produce smaller batches (100k's) §  §  Change mfg setting: increase change over (cleaning, set-up) better planning required ¡  S p l i t t i n g m a n u f a c t u r i n g f o o t p r i n t i s n o t e ff e c t i v e ¡  E n s u r e s p e c i a l i z e d p r o d u c t s c o m i n g f r o m d e v e l o p m e n t are "manufacturable", particularly when complex §  requires more up-front involvement in product development ¡  N e e d t o r e t a i n k n o w l e d g e w i t h i n f u n c t i o n ( e s p e c i a l l y i f becoming less of core competency) ¡  O p p o r t u n i t y t o c o - m a n u f a c t u r e 23
  24. 24. Demand Volatility How to deal with variability and uncertainty? Volume Example 1 Example 2 Forecast Risk zone §  Accuracy (when it will happen) §  Volume prospection (function of time) 12-24 months 24 Time
  25. 25. Ex 1: Gaining visibility Providing visibility & solid planning horizon §  How do we achieve reliable and sustainable supply? §  How can we simplify translation of demand into supply? §  How to reduce lead time between end-customer and supplier? §  How to deal with costs of idle capacity? Roche Volume Traditional Peak outsourcing Peak inhouse Base-load outsource Base-load In house Time 25
  26. 26. Ex 1: Gaining visibility R e q u i r e s a mindset shift Drivers §  Always late, reacting instead of pro-acting §  Cost intensive §  Not value driven, purely tactical ("just get it done") §  Using all contingency and got hit by 'Murphy’ §  Cold back-up (plant/ people not trained) Objective §  Strategically aligned with external manufacturing §  Holistic view of capacity §  Higher flexibility, better supplying to the needs of end-customer Historical §  Traditional KPIs §  % utilisation §  Unit cost §  Profit center mentality §  Incentives financially driven §  Full costs §  Preserve the kingdom 26 Process §  Measuring cost of quality §  Applying different principle of cost allocation §  Providing transparency of costs for non-supply §  Changing incentive-system Need §  New KPIs §  Reliability of supply (CDI’s) §  Cost of quality §  # of incidents §  Incentified by uninterupted supply of quality product
  27. 27. CMO Perspective on the Roche outsourcing model §  Very unique and advanced model §  Allows maximum planning at CMO §  Will required open discussions upfront as Roche also need to have a minimum quantity to keep knowhow in house §  Can´t be seen as tactical outsourcing and is one of the best examples of a strategic partnership 27
  28. 28. Case Study A: Delivering supply chain value proposition (“Agility”) Formulation supply to EU Key starting material (KSM) supply from EU Manufacturing of API and formulation (UK) Securing supply chain: Process development to manufacture KSM in-house (UK) Cost reduction initiative as initial target: Sourcing of KSM from China Supply of KSM from India Final supply chain Manufacturing of KSM in India Supply Chain stability initiative 2: KSM manufacturing – Process transfer to Indian facility Customer requirement •  Agility at supply chain on a product with high sales variability combined with requirement of cost reduction due to upcoming competition 28 Benefits to customer Agile supply chain established + significant cost saving via back integration of Key Starting Material
  29. 29. Ex 2: Achieving agility U n p r e d i c t a b l e d e m a n d on short notice XXX Panic zone Volume Issue §  Baseload for seasonal demand is Y §  Commitment to WHO for 40-50x of Y within first 9 months §  With immediate decline thereafter Risk zone Forecast 12-24 months 29 Time
  30. 30. Ex 2: Achieving agility Stand on many feet Need §  Fully loaded SC, keeping intermediate inventory on all stages §  30+ sites engaged in SC §  80% externally& 20% internally supplied Tr a d i t i o n a l 1 Flu treatment 30 2 3 4 5 Understand full capability
  31. 31. Ex 2: Achieving agility C o n t r i b u t i n g factors Additional complexity §  Not single or dual sourced, but sometimes up to 5 vendors §  How do you keep them busy (profitable) and trained (ready) §  offering a base load that is steady (same product or same technology) §  prioritize for 9 months one or the other product §  leveraging inventory run down 31
  32. 32. Ex 2: Achieving agility Value creation a c h i e v e d by e n s u r i n g h i g h - m a t u r i t y i n e v e r y dimension of TRM model Seek & Share Understand Translate 3 Strategic Alignment 3 Value Engineering 3 Identify unmet needs 2 Future Growth 2 Optimize cost & budget 2 Know expressed needs 1 Large Volume 1 Compliant Process 1 Transaction focused 3 Value Creation 3 System in place 3 Deliver “Delighters” 2 Performance Mgmt 2 Plan established 2 Expectations set 1 Risk Management 1 KPIs reported 1 Basic needs met Assess 32 Select & Implement Communicate
  33. 33. Case Study B: Ensuring reliability of supply Customer need •  Maintenance of 99% in-stock position for more than 500 SKUs •  Assurance of zero quality and regulatory issues What we did? •  Ensured alignment of all stakeholders to the expectations and needs of customer through daily meetings – clear shortening of communications paths •  Oriented internal supply chain towards customer’s needs and give customer full insight views •  Established collective responsibility and ownership for actions •  Provided monthly monitoring of performance and transparent result sharing with the client Value to the customer •  Consistent achievement in-stock performance above target for more than 2 years and consequently supply assurance to customer •  Trusted supplier for the customer – among the top 2 suppliers for Europe 33
  34. 34. Pharma 3.0 – a New Paradigm ¡  With this kind of changes we need to rethink about our supply chain and outsourcing models: §  Should a CMO offer “just the manufacturing” or should a CMO get an integrated part of the new more complex supply chain by adding additional value to the supply chain? §  Can Pharma Companies and CMOs achieve the new targets with tactical models or will be strategic partnerships the required model? §  Should Pharma Companies not define in depth the reasons for outsourcing within their RFQs? There should be a move away from lowest price to best value but this can be only achieved if the CMOs will be allowed to understand the intention for outsourcing §  More dedicated projects/products will require more flexibility (smaller batches, more SKUs, global supply). Are CMOs prepared for it or is there still a focus on larger products? What are the future expectations on CMOs? 34
  35. 35. 1- Back ground 2- Highlights of “Beyond Procurement” global study 3- Moving beyond SRM – Trading Relationship Management §  §  §  §  Healthcare challenges and the impact on Pharma Key challenges & opportunities for Manufacturing The buyer’s view: 2 case studies from Roche Raising the play: Piramal’s offer 4- Implementation over view 5- Staying engaged / Q&A 35
  36. 36. Transformational program foundation elements A structured path to accelerating delivery of productivity Select option(s) - illustrative 1 Set Productivity Strategy 3 Total Cost-Base Management 2 SRM as value-creation ¡ A s s e s s c u r r e n t condition and match with key business drivers ¡ A l i g n a n d ¡ D e v e l o p Operating Model and required capabilities ¡ C o v e r e n d - t o - ¡ A s s e m b l e r o a d map and timelines for organizational transformation 36 integrate productivity processes end cost base (in case of TCBM) ¡ D e f i n e s y s t e m s and data requirements 4 Raise Organization Readiness ¡ C r e a t e n e w ¡ I d e n t i f y r i g h t ¡ D e v e l o p n e w, ¡ I n t e g r a t e w i t h organization structure sequenced delivery process ¡ B u i l d Management process to ensure consistent value delivery positioning in organization 5 Grow Capability Offering ¡ D e v e l o p n e w role profiles, assessment tools, and career map company p l a n n i n g p r o c e s s ¡ S e t - u p p r a g m a t i c talent ¡ O v e r c o m e development implementation program obstacles using robust change management plan T h e o u t c o m e i s a r o b u s t p r o d u c t i v i t y s t r a t e g y, aligning organizations with structure & planning, and a process that delivers breakthrough levels of value ¡ C r e a t e a t a l e n t spotting and management plan to identify and attract leaders
  37. 37. 1- Back ground 2- Highlights of “Beyond Procurement” global study 3- Moving beyond SRM – Trading Relationship Management §  §  §  §  Healthcare challenges and the impact on Pharma Key challenges & opportunities for Manufacturing The buyer’s view: 2 case studies from Roche Raising the play: Piramal’s offer 4- Implementation over view 5- Staying engaged / Q&A 37
  38. 38. Staying engaged Four distinct, integrated areas of activities Knowledge   https://www.surveymonkey.com/s/bpsuk Research & Publications https://www.surveymonkey.com/s/bpsspain https://www.surveymonkey.com/s/bpsgerman https://www.surveymonkey.com/s/bpsnetherlands Complete Series: http://www.procurementleaders.com/blog/my-blog--sammy-rashed Beyond SRM: http://blog.oldstlabs.com/beyond-srm-co-creating-value-through-strategic-alignment/ Advisory Tr a n s f o r m a t i o n   Half-day applicability workshops, followed by 2-day strategic retreat with Procurement Leadership Team Think Tanks   http://www.lfo.tu-dortmund.de/index.php?option=com_content&view=article&id=279&Itemid=200 http://www.lfo.tu-dortmund.de/index.php?option=com_content&view=article&id=297&Itemid=211 Learning Conferences   http://www.bettersellingtopharma.com/Home.aspx 38
  39. 39. Huge opportunities to do more But first need to step up… “You miss 100% of the shots you don’t take” - Wayne Gretzky 39
  40. 40. Huge opportunities to do more …and build a solution to tomorrow’s problems “Skate to where the puck is going – not where it is” - Wayne Gretzky 40
  41. 41. Q&A
  42. 42. Seek & Share 3 Supplier 42 2 1 Customer Buyer 4 Assess Understand Translate 5 Select & Implement 6 Communicate
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