Log i Pharma Benchmark 7

8/13/2019 Log i Pharma Benchmark 7

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The 2012/2013Benchmarking Report


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The team behind Worldwide Business Researchs LogiPharma conference with helpfrom an advisory board of senior-level executives from international pharmaceuticalcompanies created a benchmarking questionnaire for LogiPharmas 2012 audienceof end-to-end supply chain executives. The survey was distributed at the Philadelphiaconference, where more than 180 executives from large pharma companiesanswered questions about supply chain integrity, increasing FDA regulations,sourcing with global partners, and more.

The goal of the survey was to understand where bio-pharmaceutical executives standon some of the biopharma logistics industrys biggest issues. For instance, in recentyears the U.S. has experienced a rapidly increasing frequency of drug shortages,which has caused numerous difficulties for clinicians, health care facilities, patientsand federal regulators alike. The Drug Information Service at University of Utah HealthCare (UUHC), which partners with the ASHP to manage its drug shortage program,tracked a total of 211 drug shortages in 2010the highest number recorded to date ina single year. An analysis by the Premier Healthcare Alliance in March 2011, also foundthat more than 240 different drugs were in short supply or completely unavailable in2010, and more than 400 generic medications had been back-ordered for five daysor more. For 2011, the study found that there had been 210 drug shortages reportedas of September 15 of that year.

Drug shortages are just one of the many issues facing the pharma logistics industry,

examined in this report. The report also delivers analysis of the revealed trends fromexecutives at Bristol Myers Squibb and GSK. Results to this study determine trendsand pinpoint challenges to maintaining integrity in the supply chain, as well as areasin need of further development and investigation.

The roles of those answering this questionnaire ranged from Director of Global Assetand Operations, to Executive Officer, to SVP of Global Supply Chain, to name a few.Respondents represented companies like Novartis, Johnson & Johnson, Shire,Bristol-Myers Squibb, Merck and more.

See how your firm compares to your peers and competitors by viewing the resultsand analysis throughout this report. Results begin on page three.

BENCHMARKINGREPORT

The 2013 LogiPharma

Introduction ....................2

Research Findings ..........3

About LogiPharma ........14

Table of Contents

*

The 2013 LogiPharma Benchmarking Study2

The benchmarking data clearly shows that increasing costs and risks to supply are the biggest challenges we currently face in the pharmaceutical supply chain and these are being driven by new regulations, more compliance oversight and the need to mitigate counterfeiting through product serialization and ePedigree.

William McLaury, Global Head, Pharma Supply Chain Strategy, NovartisPharmaceuticals Corporation


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Which of the following best

describes how your supplychain is structured?

of pharmaceutical executivesdescribe their ideal supply chain astraditionally structured

42% of pharmaceutical executivesdescribe their ideal supply chain asa hybrid organization or one tailoredto address specialized needs suchas business segments oroutsourcing

58%

42% Traditionally structured planning, sourcing, logistics38% Hybrid organization

14% Tailored to address specific business segments

6% Tailored to address insourcing vs. outsourcing

42%

1

38%

14%

6% I fundamentally believe

a supply chain should

be structured and run end to end. This eliminates the middle man and gets closer to what the customer needs. Some business have been doing this since the early 90s,so we should all keep that in mind! Paul Clayton, VP Logistics &Supply Chain, GSK



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are trying to manage the impact ofwidespread drug shortages bybuilding safety stock where feasible.86%of supply chain executives

2

Building safety stock can work, but goes against the goal of most companies to reduce safety stock (or improve working capital). Having at least two locations to manufacture the

products can significantly reduce the inherent risk. Paul Clayton, VP Logistics &Supply Chain, GSK


How are you trying to manage

the impact on your companyof widespread drug shortages?

86% Building safety stock where feasible

6% Buying generic drugs from competitors to fill pipeline

4% Developing generic substitutes for branded products

4% Other

86%

4%

6%

4%


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surveyed say while they do not have fullend-to-end visibility or the capability tomanage the exceptions as they occur,yet, it is part of their strategic approachmoving forward to understand andmitigate their customers expectations.

50%of supply chainexecutives

3

We are at a real

inflection point for Control Tower software in the pharma industry,

with every company talking or embarking on this journey, and clearly understanding the benefit it can bring. The key is recognizing it is more than just a software solution and needs people and processes to realize the most significant benefit. Andy Amor, Executive DirectorGlobal Logistics, Bristol MyersSquibb


How are you improving visibility in

your end-to-end supply chain , andwhat are you doing to understandthe impact/mitigate the exceptionsthat could impact customers ?

50% We dont yet have full end-to-end visibility or the capability to managethe exceptions as they occur, but this is part of our strategic approachand is being actively discussed.

28% We have full end-to-end visibility but dont have the capability to easilycreate an impact analysis to the exceptions to understand the tradeoffs involved.

14% We already have full end-to-end visibility and impact analysis triggeredby automatic notification to enable corrective actions to pro-activelyoccur.

8% We dont yet have full end-to-end visibility or the capability to managethe exceptions as they occur.

50%

28%

8%

I m pr ov

e m e n

t I nE n

d -T o-E n

d S u p pl y

C h

a i nP l a n

Number Of Supply Chain Executives Surveyed0 5 10 15 20 25 30 35 40 45 50 55

14%


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4

I fully support and

agree with building a global product team. This ensures one group and not multiple groups are looking at end to end for the

customers. Paul Clayton, VP Logistics &Supply Chain, GSK


What strategies are you taking to

ensure success in implementinga global end-to-end serializationsolution?

Strategies In Implementing A Global End-To-End Serialization Solution

10

0

20

30

40

60

70

50

52%58%

31%

42% 42%33%

52% Involve contract manufacturing

58% Create global product team

31% Contract packaging- outsource

42% Involve suppliers

33% Pilot with distributors

42% Awareness and involvement with the end customer

are looking into creating global product teams andcontract manufacturing to implement a successful globalend-to-end serialization solution, but less than half areinvolving either their suppliers or customers in theimplementation

THE MAJORITY OF SUPPLY CHAIN EXECS SURVEYED


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5


Predict the year when there

will be meaningful informationexchange across multiplebusiness processes withmanufacturers and wholesalers(Shipment, recalls, rebates etc).

31% 2016

27% 2018

23% 2020

11% 2014

8% Beyond

31%

26%

8%

11%

23%

believe that it will not be until at least2016 or later that there will be an openexchange amongst pharmamanufacturers and wholesalers,though most noted that sooner ratherthan later would be best because ofthe increasing regulatoryexpectations around recalls.

89%of executivessurveyed


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When asked what types of technology is being used toprotect shipments, 74% of attendees confirmedpackaging their shipments with overt orcovert markings.

6


What types of technology are you

using to protect shipments?

To protect shipments

I believe you should use both overt and covert. For people wanting to steal your products, usually they know if there is oneor the other but not both. Paul Clayton, VP Logistics &Supply Chain, GSK

Types Of Technology Used To Protect Shipments

45

40

35

30

25

20

15

10

5

0

27%

38%36%

23%

25%

21%

27% We do not use anti-counterfeiting markings.

38% We use overt markings on our packaging.

36% We use covert markings on our packaging.

23% We use track and trace systems with unique numeric identifiers.

21% We use real-time mobile device authentication systems.

25% We use other customized protective technologies.


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there doesnt seem to be an overwhelming trend in regards tohow companies are segmenting their supply chain. To improvecustomer experience, it seems, companies are divided onbest practices to improve their customer experiences.

7


How are you segmenting your

supply chain to improve thecustomer experience?

The evolution of supply

chain segmentation is a journey of transformation

of vantage points in that you need to move from an inside-out to an outside-in perspective,whilst balancing this against a clear understanding ofcost to serve. Andy Amor, Executive DirectorGlobal Logistics, Bristol MyersSquibb

26% We segment our supply chain based on customer-identified needsand values balanced by actual cost to serve trade-offs.

26% We segment our supply chain based on customer-identified needsand values.

25% We segment our supply chain based on distribution channel servicelevel agreements.

23% We segment our supply chain somewhat depending uponmode/method of delivery to customer.

26%

26%

23%

25%

ACROSS THE BOARD,


10/15

8


Are you considering transitioning

from transaction-based tobusiness outcome-basedtransactions with your 3PL orLogistics Service Providers (LSPs

3PLs provide a critical

service and should not be treated as commodity providers;therefore strategic relationships are critical. Balancing the desire to build these partnerships by limiting the number of providers, against ensuring the market receives appropriate market leading service, is the key.

Also, these partnerships should be outcome driven with strategic partner understanding, and integrated to your business and business strategies. Andy Amor, Executive DirectorGlobal Logistics, Bristol MyersSquibb

53% No, we work with our 3PLs/LSPs on a purely transactional basis fortheir services.

17% We are currently talking about it and investigating the implications, buthave not reached outside to discuss further.

17% We are currently in talks with our strategic 3PLs/LSPs to discussviability and impact of transition on both parties.

9% We are in the executional phase with at least some of our strategic3PLs/LSPs.

4% We already have transitioned and are seeing success from adoptingthis approach.

53%

4%

9%

17%

17%

surveyed work with 3PLs/LSPs on apurely transactional basis for theirservices, and do not foresee atransition to an outcome-basedbusiness model anytime soon.

53%of supply chainexecutives


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For 33% of those surveyed, cost, service andcompliance trade-offs, are the biggest hurdles whenmaintaining the integrity of their supply chains. 32%said their biggest challenge was risk managementand continuity of supply.

9


What is the single biggest

challenge you see facing yoursupply chain?

For most it should be cost, service and compliance trade-offs, because all affect your customer and your long-term business success. Paul Clayton, VP Logistics &Supply Chain, GSK

24%

32%

33%

11%

The biggest challenge for companiescontinues to be maintaining the integrityof the pharmaceutical supply chain.

B i g

g e s t C h

a l l e n

g e F a

c i n gY

o ur

S u p pl y

C h

a i n

Number Of Supply Chain Executives Surveyed

0 5 10 15 20 25 30 35

Increasing regulatory compliance.

Risk management and continuity of supply.

Cost, service and compliance trade-offs.

Globalization andmeeting needs ofemerging markets


12/15

10


How are restrictive regulations

and compliance initiativesimpacting your company?

59%

2%

30%

9%

59% Adding extra onto product costs which is a negative to P&L

30% Causing delays in launches coupled with poor customer service.

9% Have not seen any negative or positive effect on business.

2% Other

said that restrictive regulations and complianceinitiatives are adding extra product costs, resulting ina negative mark in their profit and loss margin.

AN OVERWHELMINGMAJORITY OF ATTENDEES


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surveyed operate two to fourdistribution sites in their USsupply chains51%of supply chain executives

11


How many distribution sites do

you operate in your US supplychain?

We used to operate one DC but moved to

two mainly for business continuity reasons as well as increased flexibility at critical times such as product launches. Andy Amor, Executive DirectorGlobal Logistics, Bristol MyersSquibb

36%1 Distribution Site

2-4 Distribution Sites 51%

6%

7%

N um

b e r

Of D i s t r i b

u t i on

S i t e s

Number Of Supply Chain Executives Surveyed

0 10 20 30 40 50 60

5-10

10+


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LogiPharma is the premier pharmaceutical supplychain and logistics event in North America,

covering a comprehensive range of supply chain topics including (but notlimited to): supply chain optimization, transportation management, inventorymanagement, security management, cold chain management, supplier-partner relationship management, product launch management, packagingtechnology, business continuity management and pedigree compliance.

AboutLogiPharma

About Worldwide Business Research


WBR is the worlds biggestlarge-scale conferencecompany and part of the PLS

group, one of the worlds leading providers of strategicbusiness intelligence with 16 offices worldwide. Ourconference divisions consistently out-perform theirindustry sector competitors on the quality of the events weproduce and the relationships we nurture with bothattendees and sponsors. Every year over 10,000 seniorexecutives from Fortune 1,000 companies attend over 100of our annual conferences a true Whos Who of todayscorporate world. From Automotive events in Bucharest toLogistics conferences in Arizona to Luxury conferences inNew York and Finance summits in Hong Kong, WBR isdedicated to exceeding the needs of its customers aroundthe world. In addition to our industry leading conferences,our professional services marketing division, WBR Digital,connects solution providers to their target audiences withyear-round online branding and engagement leadgeneration campaigns.

Logipharma.com1.888.482.6012

[email protected]

Contact Us:


15/15

Why else should you attendLogiPharma 2013? 50+ speakers and 200+ senior-level attendees create the right mix

between an intimate and interactive environment, diverse learning andworld-class networking opportunities

VP Only ThinkTank bringing together top 15-20 pharma supply chainexecutives in North America

New topics focused on customer driven supply chain, emerging markets& agile supply chains

We are not only looking into US regulation & supply chains, but alsointernationally as supply chains become more global As the FDA increases scrutiny on quality and assurance, we shift away

from pure cost efficiency and discuss agility, risk management &business continuity

LogiPharma has already proven its relevance as the best conference of its kind due to its content, speakers and relevance to today's and tomorrow's issues. An excellent place to meet colleagues and exchange ideas Daniel Scheidegger, Vice President Euopean Operations, Genzyme Pharmaceuticals

For me what really grabbed my attention about LogiPharma this year is it is looking at the whole Supply Chain, not just logistics.Looking at end- to- end components. What our suppliers are doing, what R & D is doing, how mergers and acquisitions impact your business, how that flows into manufacturing and that could be anywhere in the world. What LogiPharma is doing is bringing in great speakers to entice people to be more involved strategically to make their organization work really, really well

Paul Clayton, VP Supply Chain & Logistics, GlaxoSmithKline

CLICK HERE to Register Now!*

September 17 19, 2013

Westin Princeton atForrestal VillagePrinceton, NJ

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Log i Pharma Benchmark 7

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