Big Ideas in Supply Chain: A practical approach to the digital supply chain

[Music] it's a hard act to follow so pardon me because it'll be a not as entertaining and as infinitive as Adam was obviously anyway good morning everyone what I wanted to talk to you about today is a practical approach I mean there is a lot of buzz going around in digitization I'm sure you're all part of it whether it's blockchain AI AM ml etc this is something that I wanted to share with you which is a real life experience I've had a few times in my career so just before I get into the meat of it I wanted to give you an idea of just introduce myself I've been really fortunate to work for some of the best companies around the world and you can see some of the names that you hopefully will recognize they're starting off with Unilever straight after school I've had the opportunity not only work for the best companies but also on the four continents I've learned from the best and this is something that I wanted to share with you today to make give you a practical viewpoint and hopefully some kind of guidance of how to digitize your own supply chains so I think the first thing that I wanted to talk about is having spent the last six seven years in the pharma industry I come from consumer but migrated into Pharma and just to share a little bit of myself I went into Pharma to give back because as I said I'd learned from the best and I think for me at least and supply chain if you know getting the drug to a patient at the right time in the right way is probably the most satisfying thing that a supply chain person can have so for me it was more like to give back to the you know for all the things that I had received around the world and with the various companies so in what I wanted to share with you as an example from the pharma industry and how many of you are in the life sciences space but we have a few so you'll hopefully recognize some of the things that I'll talk about there's one thing that I know for certain that as the pharma industry or the life sciences industry is evolving it's not going to be business as usual do you guys agree with that to give you some examples of what's happening happening people who are not part of the life sciences industry one is the digitization of medical records now that sounds pretty straightforward but if you really look at the impact that's going to have or it's starting to have how many of you have actually seen a book called the patient will see you now if not I would you know it's a very interesting book basically the whole table around the the care health care is actually changing where the patients have much more say in control through social media through all kinds of other things because I can tell you a wrong prescription or a wrong event in the healthcare space if it gets on to the social media and goes viral can you imagine the PR issue that the company or the healthcare provider will have so I think that's changing how we deliver service or products to to either the providers or to the patients second I think if you look at the regulatory compliance strict is becoming much stricter again from a supply chain perspective what does that really mean the people who are in that space will probably relate to this if your competitor gets a warning letter from FDA they have to withdraw the product and guess what your demand spikes on the opposite side some supplier somewhere in the world supplying you some very critical components or or materials gets a warning letter from another health agencies they're out of business and now you've got to find a second source and people who are familiar with the life science industry you'll know that to get an approval for a new source it's matter of years this is not something that you can do very quickly so there are many other areas one of the other things that I think are impacting the supply chain most is most of the growth is coming from the emerging markets Europe u.s. are fairly developed already and the bulk of the business the new business is coming which is extending the supply chain to a supply chain professional managing you know ingredients coming from China being processed in India packed somewhere else then shipped into Egypt I mean can you imagine managing that supply chain and in a highly dynamic environment the demand spikes as I am talked about from regulatory and other issues and supply variability managing longer supply chains becoming a challenge so overall hopefully that gives you an idea of what that is not gonna mean now in my in my in my own experience we tried to do a functional approach to say okay fine we you know we'll try and figure out in supply chain of how we gotta manage this but my key learning was that you actually need a business response and what I mean by that is it's about total solutions and you know that's a that's a phrase that I try and live to in my own don't give a partial response or a partial solution so if you take for example demand variability which I think all of us deal with that supply chain leaders we can fix it we can't fix we can only deal with it we can respond to it but you can't really fix the demand variability now what you need to do is to work with the procurement and other organizations operations to build some kind of a quick response mechanism because you being able to plan fast it is not going to help that so what you basically require is a business response not just a functional view because if you just do a functional view you're going to maybe optimize or to use Paul's term today synchronize it but the rest of the business may not be able to support that kind of synchronization and it will fall apart so what you need to do is I mean if you really look at supply chain touches every element of a business if you think about from such development to operations to finance to quality or whatever it might be so what you need to do is to look at the business holistically and then basically there are a few questions and again there are no right or only a cookiecutter ways of doing this but some of the things that I would recommend is use this as a top-down approach and when I mean top-down is talk to the senior executives of the company say given that our landscape is changing so rapidly what is going to be the space for this company are we going to leave and lead in innovation leave in service and what is going to be the value proposition of the company now it sounds very you know 50,000 feet cloud but really you need to start because you're now building for the future you're not responding to something that's a problem today because it won't be happen that way so you start from the space that the company wants to do look at how you can as supply chain leaders bring value to that proposition of the company look at what your capabilities that you will require so it's a cascaded approach I'll talk a little more about capabilities of what I mean by that what capabilities would you need as a supply chain some you have said you don't have to really be able to support that kind of strategic intent of the company and then start looking at how you're going to build it and based on those capabilities what you need to look at is look at a new operating model I'll give you a real-life example later on but basically my personal experience has been that because this business is not going to be the way we've seen it in the past you'll need to look at new operating models going forward for me if the first take and I'll reiterate some of the things that were said in the morning we talked a lot about AI ml etc but people are indispensable creativity of people which it's something that I strongly believe and the success of any transformation is having the right people and most importantly the right culture one of the things that I believe in as leaders that we are responsible for 3 C's first is the culture second capabilities and the third capacity that's the real work of a leader forget about all the expertise that you bring to the table so you need to make sure you have the right culture you have the right capabilities in the teams and you have the right capacity means you have adequate resources so think about that is your building of your operating model for the people side and it's in the sequence that I'm trying to show it to you second is processing systems I've heard from many of you now and even before we have a major problem in the supply chain ok let's go find a technology solution and that will fix it it's not like going into a Walmart and buying a piece of chocolate there is a lot of pre-work required before you get to a point of the technology so first the people operating model then the processing systems and here system means work systems not IT systems I'm talking about for me number three is the technology based on the capabilities the culture and everything else that you work through in the first two boxes you then look for the right fit of the technology and that is something very very important I mean yesterday I was talking at another session and I said you have to take your time in these areas because for me it's like courtship and if you don't take enough time and make sure that you're doing it right and if you you know either propose to get married you got to live with that system for a long long time to come so take your time because I find a lot of companies they rush into a technology solution or it's predetermined or via an SME shop so we just take ap oh no I mean if your may or may not be vital thing to do so you have to follow a very pragmatic logical and a cascaded approach is what my recommendation would be to you last but not the least many of us forget this and I can tell you I have personally learned it the hard way we did everything right in the first three boxes didn't pay attention to the data and the go-live was a disaster because as you heard and I am sure you know as well as I do garbage in garbage out so we tend to forget that having clean data whether it is master data or properly structured transactional data none of this transformation is going to work the most critical you know this actually I'm showing here is an SEM well leader last year they have done a survey in going through a supply chain or even a business transformation what was the biggest problem that the leaders faced and to some of you it may be surprising it's not about direction from leadership it's not about use-case etcetera etcetera what you see there but it was the lack of a road map and believe it or not I think it's absolutely right because what what what you need to do is actually rethink the whole supply chain strategy as I said a new operating model with a good roadmap what you need to really think about is it's not going to be a quick fix this is not something oh I have a demand problem and a supply problem I'll fix it the industry is really evolving and otherwise you'll just be chasing your tail because you'll just be responding to the immediate symptoms that you're seeing out there to do it properly and permanently you need to really step back and take a long-term approach and for that you need a roadmap so I'll walk you through some of the things that we had gone through in a couple of the companies that I have tried I've actually implemented this and this is a particular example from a pharma company the first thing we did was you looked at the industry trends but you look at the the company trends so one of the companies I worked for I'll give you some of the trends that were happening in the company when I joined the company for four years ago they were a 5 or 6 billion dollar enterprise primarily generics that is 2014-2018 12 billion they got biosimilars they got over the counters they've got branded generics they've got all kinds Europe when I went to Dublin four years ago was a billion dollar business today it's touching four and a half billion dollars phenomenal growth not just in size but in complexity emerging markets went from half a billion to two and a half billion in the same period so not dealing with just the complexity of 35 countries in Europe dealing with 61 countries in the rest of the world has recorded and all kinds of issues that come with it we actually projected that back in 2014 and 15 that the company going back to the company vision and how you going to differentiate themselves was by having explosive growth both organic and inorganic the other thing is the new products I mentioned if you look at a biosimilar an oncology drug it's very different from a normal generic product it is not sold to wholesalers it doesn't go to a pharmacy it goes to an oncologist or a clinic or a patient at times because if you are in a home care so now you're looking at multiple go to market models you're looking at multiple distribution channels etc so predicting those kind of things three years in advance because the biosimilar being launched right now as we speak in Europe you can't build the capabilities to handle that now you could have you should have started a few years ago so it's important for you to really look at where your business is growing going what is going to be the implication of that on the supply chain the some of the things that actually was analyzed at that time was one is the high M&A activity because they were going to grow you know in organically as well so we needed to build capabilities for M&A so be able to integrate very quickly because that's the only way you can get value demand and supply volatility we talked about that's an industry phenomenon another thing was you're into tender market business and tenders you when you win them there is a demand spike when you lose them now you have an extra you know inventory line with you attribute place planning and that probably the people in pharma would actually appreciate more what I am talking about is because of the volatility of supply side particularly you have to do risk management and you have to have dual or triple sources for materials but a material especially the active ingredients that we use in drugs that if it is not registered in a market you can't ship it even though it may be an identical product so you need to have a full visibility and actually a control over this particular active ingredient can only be sold in those markets etc and if you do if you make a mistake it leads to a repo even though the product is perfectly fine so that's another key requirement that we knew especially when it comes into biotech and biosimilars cost to serve control as you know all governments are targeting drug prices you can hear it on the news everywhere in the world that's the easiest for them a place to go to reduce the health care costs so we need to really bring down the cost which is pretty obvious extended supply chain be able to ship to Libya a biosimilar product temperature control two to eight and to be able to you know manage that can have extended value chain the other thing which we had to be careful about we actually did an analysis as a team how long does it really take to bring a product from absolute start materials to delivery to the customer and it shocked my entire executive team 354 days some of you may be familiar with what I'm talking about no one realized it because everyone looked at their own little lead times but if you start from the materials imported from someplace in the world start making the active ingredients than the bulk then you know tablets or whatever the case might be what we needed to do is to have a much wider as longer visibility and connected Enterprise to be able to manage those kind of lead times because if there is a variability at the front end you should have handled that 354 days ahead now I'm not saying that's always possible but you can imagine what will be required as we go forward multiple go to market models as I said we have all the counter which goes to different outlets we have generics which goes to pharmacy oncology goes to hospitals or clinics and then the multi-channel distribution so here are some of the impacts that we worked out on and one thing that me and my team realized that we have to think different and you know a simple thing I'll say leading a global supply chain very very small things matter I mean I am talking to the team you know at one time and I said okay you're booking a conference called you realize it's 2:00 a.m. in Japan at that time so having a global mindset it's something which is very very important if you really want to run a global enterprise you need to worry about cultures you need to worry about how you interact with people because you are dealing with human beings and not with robots then the other thing that was really important is we needed to really think about the future and build for the future because the instant reaction of most a lot of my team actually was ok so we will fix this problem in six months no this is going to be a journey and we're going to do it logically and look at you know stand back and look at the world as it's evolving and develop a total solution around that doing going through a very detailed exercise here are some of the capabilities that we came about how did we actually do this this is not something which we whiteboard it or or did but basically looked at what is the value proposition of the supply chain and to deliver that value proposition what capabilities will be required now I'm now going to walk you through these but hopefully some of these will give you an idea the idea is to to talk about capabilities and not about initiatives of projects you're building capabilities which is a combination of people process technology and data keep that in mind as you go forward with that the other thing I wanted to share with you is a road map now don't worry about trying to grass for what is written on it but the only things I want you to notice here is it's a multi-year program there are hundreds of initiatives out there in proper sequence in proper channels and you're building multiple things from ground up to reach to a point that you want to get to don't be in a rush get it right rather than get it early would be my sincere advice make sure that the company and the organization understands this is not a quick fix this is a journey which was then finally yield now you get prizes on the way so it's not you know wait for four years to do everything but don't try and do it in a hurry because you won't get it right for the first time the critical learning for me was keeping in mind a few things one is supply chain transformations are hard why because we touch every function of the company if we do anything different so they're cross functional dependencies and the most critical thing is you're driving change without being in position of power so keep that in mind don't jump into it make sure that you you have you have the right strategy to deal with the organizational change start only if you have the right talent way back in my career once I stopped the transformation program cancel the contract of the technology provider because I didn't have the right team because if you don't have it you're starting off with a disaster on your hands talent has to be right the other is a villain coalition you heard a little bit about that from Adam and most importantly again clean comprehensive master data that's the most important piece that you need to also worry about so in conclusion the a farmer supply chain of the future will require different behavior again back to the human beings they're not going to be actors compete as individuals it's not going to be a relay race it will have to be done in a seamless cooperation across the integrated team that's what's going to mean success in the evolving world as we digitize move faster etc etc that's all I had for today any questions [Applause]

Channel: Kinaxis

Views: 22,371

Rating: 4.9496856 out of 5

Keywords: Kinaxis, Mylan, RapidResponse, experience in life sciences industry

Id: 4lYywJqDd8c

Length: 22min 48sec (1368 seconds)

Published: Fri Jul 26 2019