Creating Supply Chain Excellence Part 3
This article was published in the September/October 2016 edition of Pharmaceutical Engineering® Magazine. Missed the beginning of this three part series? Catch up now:
- Creating Supply Chain Excellence, Achieving Superior Performance
- Creating Supply Chain Excellence Part 2
Pharmaceutical Engineering® Magazine (PE): How is that put into practice at BMS?
Lou Schmukler (LS): Our aspiration has been to move from a reactive to a proactive mindset and thereby realize the greatest ROQ. This is at the heart of our quality system and plan. A main component of our approach is our product robustness program. The vision for this program is the certainty and ability to prove that any product, at any time, in any place, from any site (internally or externally), meets BMS’s high-quality standard and is available when and where it is needed. It has four pillars: supplier, process, equipment, and distribution robustness with process, technology, and people elements common to each pillar. Program scope includes the full product life cycle, from development to late life cycle and discontinuation. We set targets for CpK across the portfolio and for each of our supply nodes with a goal to exceed 1.33 for all critical quality attributes.
Three Dimensions of Supply Chain
This robustness work, coupled with our “inspection-ready everyday” philosophy, has been pivotal to raising the reliability and performance of the supply chain. In addition, BMS has been very engaged with our peer companies, regulatory partners, and ISPE on both the drug shortages and quality metrics topics. Our supply chain and aligned quality efforts are obviously key to our methodologies for both of these.
Lastly, I want to just briefly comment on the “soft” side of attaining quality excellence: the people and culture aspects. As with any business-critical priority, the tone must be set from the top and reinforced by every leader in the organization. Painting a vivid picture of the future state for quality and the associated expected behaviors is very important. It is then incumbent on leadership to create an environment in which people are empowered to identify and raise issues and then be provided with the training and tools to resolve them. At BMS, our people strategy, which focuses on engagement and development, in concert with our operational excellence (Continuous Improvement-Lean Six Sigma) program are integral to this.
PE: Perhaps you could conclude by speaking about a few of the major trends and challenges you see the industry’s supply chains facing as we look to the future?
LS: A very important question. The first one that comes to mind is the need for the supply chain to be able to support the increasing R&D productivity, shift from primary to specialty care portfolios, and the associated growth in biologics. Let’s consider some of the implications. A related issue is the advent of accelerated regulatory review and approval. Supply chain organizations need to revisit their development and launch processes. The new time-constrained development environment makes ensuring robustness more challenging given limited process experience and data. In addition, legacy supply networks will need to be restructured for the new specialty care products. The trend toward personalized medicines could indicate an increase in smaller-batch production and complexity.
Today, biologics sales are approximately 20% of total worldwide industry sales with a forecasted 15% annual growth rate. The continued growth in biologics is certainly a challenge for the industry’s supply chain organizations. An estimated 40% of the industry’s R&D pipeline is biologics. The introduction of biosimilars into the market will place added demands on already-constrained global capacity. In response, the industry has increased global capacity by over a third over the past six years and will be investing in excess of an additional $20 billion over the next six years. In addition to capital expansion, bioprocess optimization should continue to play a significant role in creating new capacity as it has over the past two decades. It is also worth noting that some companies now have a growing need for added pharmaceutical API and formulation capacity, which have not been seen for some time.
There are several other areas that I think are noteworthy. I mentioned external manufacturing earlier, and I believe this is a trend that will continue. Business development activity has been fast and furious of late but is now slowing a bit. That said, supply chains will need to be prepared for the possible merger, acquisition, or the acquiring of new assets. I expect the further globalization of supply chains and the need for manufacturing in developing markets will also continue. In addition, with the ever-increasing cost pressures on governments and health care providers, cost containment will become more and more important.
Supply chains will need to become more efficient. Of course, the new technologies coming out of R&D and those for commercial application, such as antibody drug conjugates or disposable single-use technology, will present both opportunities and challenges. Lastly, preparing for the workforce of the future will need to be a top priority. Major trends will sweep across and radically change the landscape of workplaces and the makeup of the workforce. The industry will need to address issues such as the significant diversification of the workforce, requisite new skills, and the pervasive impact of growing globalization.
Strategy is about choices and tradeoffs.
There was one recurring theme throughout our discussion: leadership. Schmukler has a deep passion for the subject. At times he speaks about it as a seasoned senior executive and others a business school professor. His primary view is that culture and performance are a direct reflection of leadership. So when it comes to improvement and change, leadership effectiveness is where you must start.
He articulated four traits he thought vital for future leaders: the ability to see the big picture, having change agility, adeptness at talent development and authentic leadership. He then described the leadership dimensions he regarded as crucial for the successful 21st century supply chain leadership team: the need for alignment, external focus, fast high-quality decision making, risk taking and experimentation, and the ability to move horizontally and vertically across roles and levels. It was very clear that leadership development is a key focus for him and BMS.
Schmukler talks easily about his personal lessons learned and that both successes and mistakes have been equally valuable. In describing those lessons, he references a Max DePree quote: “The first responsibility of a leader is to define reality. The last is to say thank you. In between, the leader is a servant.” Exemplified in all his comments is a leader with a tremendous respect and admiration for his people.
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