supply chain mapping a best practice for the …

SUPPLY CHAIN MAPPING

A BEST PRACTICE FOR THE BIOPHARMA

INDUSTRY?

CONNECT COLLABORATE

ACCELERATETM

Supply Chain Mapping 2

SUPPLY CHAIN MAPPING©BioPhorum Operations Group Ltd

ContributorsThis document was developed through a collaboration under the auspices of Supply Partner Phorum. The contributing members were:

Amgen Rod MacLea

Bayer U.S. LLC Matt Muldoon

Bristol-Myers Squibb Luis Oka Marin Henley

GE Healthcare Hanna Edstrom-Valsinger

Janssen Frederik De Vos

MilliporeSigma Joe Lacman Claire Kazanjian

Nordson Medical Ken Davies

Pall Life Sciences Sven Adams

Pfizer Inc. Jim Shea Jr.

Sanofi Jeffrey Rosen

Sartorius Dean Adams

VWR, part of Avantor Brian Diehl

BioPhorum Matthew Neal

About BioPhorumThe BioPhorum Operations Group’s (BioPhorum’s) mission is to create environments where the global biopharmaceutical industry can collaborate and accelerate its rate of progress, for the benefit of all. Since its inception in 2004, BioPhorum has become the open and trusted environment where senior leaders of the biopharma industry come together to openly share and discuss the emerging trends and challenges facing their industry. Growing from an end-user group in 2008, BioPhorum now comprises 53 manufacturers and suppliers deploying their top 2000 leaders and subject matter experts to work in six focused Phorums, articulating the industry’s technology roadmap, defining the supply partner practices of the future, and developing and adopting best practices in drug substance, fill finish, process development and manufacturing IT. In each of these Phorums, BioPhorum facilitators bring leaders together to create future visions, mobilize teams of experts on the opportunities, create partnerships that enable change and provide the quickest route to implementation, so that the industry shares, learns and builds the best solutions together.



1 Executive summary .............................................................................................................................................................................................5

2 Introduction...........................................................................................................................................................................................................6

3 What is the problem? ..........................................................................................................................................................................................6

4 Biopharmaceutical drivers for drug manufacturers and supply partners ...........................................................................................7

4.1 Patient safety, quality and reliability .....................................................................................................................................................................7

4.2 Regulatory authority ....................................................................................................................................................................................................7

4.3 Security of supply ..........................................................................................................................................................................................................7

4.4 Financial..............................................................................................................................................................................................................................8

4.5 Reputational ....................................................................................................................................................................................................................8

5 Other factors .........................................................................................................................................................................................................9

6 What could the biopharmaceutical industry do differently? .............................................................................................................. 10

7 Supply partner questionnaire – template ................................................................................................................................................. 10

8 Supply chain mapping – potential implementation model ................................................................................................................... 12

9 Supply chain mapping – maturity model .................................................................................................................................................... 13

10 Supply chain mapping – performance management system ................................................................................................................ 15

11 Conclusion ........................................................................................................................................................................................................... 15

12 Recommendation .............................................................................................................................................................................................. 16

13 Appendices ......................................................................................................................................................................................................... 17

Appendix A: Glossary ...................................................................................................................................................................................... 17

Appendix B: Supply chain mapping – Standard template ..................................................................................................................... 21

Appendix C: Process map – Possible implementation model .............................................................................................................. 22

Appendix D: Maturity model ......................................................................................................................................................................... 22

Appendix E: Performance management system ...................................................................................................................................... 23

Contents



1.0 Executive summaryIn a world where customers and governing bodies expect products to be available on demand and to be 100% safe and effective, it has become clear that supply chain mapping (SCM) is no longer optional for today’s drug manufacturers and the supply partners who support them. Sources of materials must be verified for integrity, quality and availability and there needs to be a systematic and collective approach between suppliers and manufacturers to accomplish this goal. SCM is one of the tools that companies can adopt as part of its risk and business continuity management (BCM) to deliver safe and effective products to patients as well as meet regulatory requirements. This SCM best practice guide seeks to steer drug manufacturers and their supply partners towards a more standard approach in understanding the principals and processes that companies can adopt to provide a collaborative approach to benefit end-users and the biopharmaceutical industry.

There are numerous drivers that support the need for companies to consider adoption of SCM as a key supply chain enabler. This best practice guide posits that the top five drivers are:

1. patient safety and risk

2. regulatory authority

3. security of supply

4. financial

5. reputational

This is not an exhaustive list but does largely answer the “Why do we need to do this?” question. From the avoidance of product recalls and harmful effects on end-users resulting from poor quality products or product shortages, to financial growth in profit, EBITDA and revenue resulting from robust product data gathering and knowledge of product availability, the benefits of SCM are only beginning to be fully understood. To further the gathering of product data, this paper provides a supply chain questionnaire template, which simplifies the data collection process and can be used by manufacturers and suppliers. It is suggested that the progressive adoption of a more standard approach to basic supply system information management will improve understanding to benefit the industry as it matures.

SCM can be seen as a foundation and key enabler to wider risk management and business continuity activity. It is important to understand that these are related and that the successful implementation of one is partly dependent on the successful adoption and implementation of the other. This guide provides a possible implementation model for SCM that requires the:

assessment of business needs, priorities and impacts – specific to the company

determination of the scope of SCM – to meet the needs of a company based on the specific business model and priorities of the company

definition of criteria – to assess the specific attributes desired from SCM

selection of an SCM solution – that meets the business needs

use of a pilot process – to test assumptions and assess business needs

evaluation of the SCM pilot process – making adjustments as appropriate

continuation and development of SCM – a key enabler for the design and implementation of effective risk management and business continuity plans (BCP)

utilization of SCM results – applying modifications to adjust the SCM process as experience is gained

Typically, a company will start with its most critical products when seeking to design and implement an SCM system that meets company-specific business needs. This initial stage will quickly highlight the potential benefits the company might expect to identify; for example, increased transparency of raw materials, sourcing, and availability and, as experience is gained and process design modifications are identified and implemented, in the potential areas of risk. Once the scope of a pilot program is determined, a company must assess its internal priorities to identify the ones most relevant and crucial to its business.

Sample areas to examine typically include the need to track all raw materials for a company’s products or those judged to be critical, and the need to apply the SCM process to all suppliers (or those considered key to achieving a company-specific need). These are representative of the areas to be addressed as a company begins its SCM journey.

As the SCM system is designed and implemented, and as experience is gained, further analysis and continuous improvements will, inevitably, be made. It is the need for review and continuous improvement that can help make SCM and related risk management and business BCM tools, potential key differentiators in successful companies in the biopharmaceutical industry.

A key component of SCM effort is the need to assess relative maturity in both current and desired implementation of process change. It is axiomatic that not all businesses are at the same point in their prioritization,



processes, systems, documentation, master data, risk assessment, or full, adoption of modern supply chain tools and techniques. The need to understand these, and other criteria specific to a company, are paramount in seeking to design and implement effective SCM.

This best practice guide provides a straightforward maturity model that any company can utilize in determining where, on the SCM continuum, its supply chain systems and processes meet existing business needs and where the ‘accepted future norm’ could, or should, be for the company and the industry. A critical analysis of its current state using the maturity model can help inform a company’s business goals as it transitions through the suggested stages of the SCM implementation model outlined in this guide.

Additionally, this guide outlines the performance management system characteristics for a company progressing through the design, piloting, implementation and continuous improvement of SCM and subsequent risk management and business continuity actions. While these characteristics have been grouped into the different levels of the SCM maturity model, this document specifically does not recommend a performance management system for implementing SCM because a company’s business needs and priorities will be unique.

Accordingly, this guide identifies the broad characteristics of a performance management system and the features and metrics of a company’s supply chain systems and processes that could be developed to inform progress through the different stages of the maturity model.

2.0 IntroductionThe need to consider SCM partly stems from the complexity of the modern global economy, with its multiple actors on an international stage, where the impact of events can be felt quickly and with sometimes unforeseen and catastrophic results. It is perhaps a modern paradox, and an apparent contradiction of connected and increasingly integrated SCM and with seemingly unrestricted access to information through modern technology, yet leaving some companies with an incomplete, and even incoherent SCM process. Visibility, transparency and successful risk management within the supply chain are critical elements that can help differentiate a company when delivering value to consumers and shareholders alike.

Expectations from consumers and regulatory agencies are increasing at a rapid pace, and it is vital that the industry continues to improve how it sources, procures, supplies and produces drug products and then distributes these effectively, efficiently and, crucially, safely to the

end-user. Consumers expect products to be available when needed and to be assured that they are safe and effective. The industry can benefit from a consistent and more widespread adoption of best practice across many functional areas that can help meet the challenges outlined above while reducing risk and providing increased flexibility, security and compliance.

This SCM best practice guide seeks to act as guidance for the biopharmaceutical industry to help it adjust to and manage the complex supply chain related challenges that the industry faces – today and in the future. It is not intended as a definitive and comprehensive technical reference document with detailed software solutions to be implemented. Rather, it is one that can be used to inform and guide the industry towards a more standard approach to SCM principles and processes that drug manufacturers and supply partners can increasingly adopt. It provides a collaborative approach that will benefit the patient as the end-user and the industry as a whole as it matures and develops.

A range of appendices is included in this best practice guide.

Appendix A – a glossary of standard SCM terminology

Appendix B – a suggested supply partner template that companies can use as an approach to obtaining, recording and storing basic material and supply data

Appendix C – a process map that provides a proposed implementation model for SCM

Appendix D – a proposed maturity model against which companies can assess their relative maturity in SCM implementation

Appendix E – a proposed performance management system where the characteristics and proposals can, if appropriate, be used to measure SCM implementation and its benefits based on maturity level

3.0 What is the problem?The biopharmaceutical industry is facing ever-increasing scrutiny, including a focus on the qualification of materials, production practices and how logistics and the wider supply chain are managed. There are increasing expectations by regulators for drug manufacturers and supply partners to understand and effectively manage increasingly complex and global supply chains. Events that disrupt the supply chain can happen suddenly and unexpectedly. Patent losses, a changing competitive environment, mergers and acquisitions activity, and the need for due diligence in qualifying a major change can all



provide formidable challenges while ensuring that supply chains are managed effectively and efficiently. The need to understand and map supply chains and minimize the risks to business continuity are key enablers for successful companies to manage these challenges.

Those companies without a clear understanding of their supply chain, or with a less than effective supply chain management system and appropriate supply chain tools, often use significant resources to first understand the scope and extent of a supply chain event, before being able to take action to mitigate its impact. In contrast, companies with a better understanding of their supply chain, and who can more effectively analyze and mitigate risks before a disruptive event, are better placed to reduce the impact that a disruption may cause. SCM is a tool that companies can adopt as a part of wider risk management and BCM processes across the supply chain to more efficiently and reliably deliver safe and effective drug products to patients.

In addition, the biopharmaceutical industry faces many challenges, including the continuity of supply of materials to manufacture legacy products and also enable the launch of new products. These challenges have increased with the need for greater regulatory compliance and transparency; for example, in outsourced contract manufacturing organizations.

It is now unacceptable to not know where raw materials are manufactured since this could impact safety, integrity, strength, purity and quality (SISPQ). Drug manufacturers are now required to verify the sources or locations of materials to ensure their integrity and quality, and have an awareness of potential shortages that could impact drug availability to patients. Regulatory authorities understandably demand that drug manufacturers and supply partners have a systematic approach for managing the same material used in multiple locations for manufacturing. SCM can bring transparency on potential issues that directly address the concerns of regulatory authorities in this regard, helping to provide the compliance assurance and confidence necessary in the industry. New technologies and robust procedures are vital to moving the industry in the right direction in the future. The transparency that comes with the comprehensive mapping of industry supply chains is an important step for optimizing these supply chain processes and protecting patient interests, which is the primary driver for the industry.

4.0 Biopharmaceutical drivers for drug manufacturers and supply partners

This section addresses those key drivers that impact on drug manufacturers and supply partners. It is not intended as an exhaustive list but reflects those judged to have a common application in the industry. These drivers impact on both drug manufacturers and supply partners and support the need to consider SCM as a key policy and process enabler to maintain and develop an effective, efficient, ethical and sustainable industry.

4.1 Patient safety, quality and reliability

Patient safety, quality and reliability are key deliverables that the consumer expects from the biopharmaceutical industry. As it continues to grow at double-digit rates in the coming 5–10 years, there will be increasing pressure on all aspects of the supply chain*. Despite these challenges, the importance of patient safety and product quality will remain paramount. The supply chain will continue to evolve and grow globally, from raw materials to fully assembled systems. To maintain the highest standards in patient safety, product quality and reliability, it will be necessary to adopt effective SCM tools to manage the increasing complexities of the supply chain.

4.2 Regulatory authority

Increasing globalization and complexity in the supply chain is expected to lead to tighter regulations and stricter compliance guidelines for drug manufacturers and supply partners from the industry’s regulatory agencies. These desire greater transparency on the intended use and final market of a product. While there might be some reluctance to consistently provide this transparency and information, this must be overcome with drug manufacturers and supply partners working with authorities to meet and, arguably, seek to exceed reasonable regulatory authority requirements. SCM is one tool that will instill confidence in the industry as well as with the regulatory agencies. It will show that greater care is being taken to analyze the risks associated with supply chain and compliance failures and to meet the growing future demands.

4.3 Security of supply

The dynamics of a global economy for materials and the need to ensure specific regulatory and legislative compliance makes the security of supply a major challenge. Drug companies and supply partners need to understand the risks involved and undertake due diligence to minimize their impact on the supply chain. The level of risk can be determined by several factors, including areas of political

* In 2016 biopharmaceuticals alone generated global revenues of $200 billion, making up about 20% of the pharma market. It’s by far the fastest-growing part of the industry with biopharma’s current annual growth rate of more than ≤15% annually.

Source: Langer, Eric (2016, December). 2017 Biopharmaceutical Trends — Opportunities For The New Year. Bioprocess Online. Retrieved from https://www.bioprocessonline.com/doc/biopharmaceutical-trends-opportunities-for-the-new-year-0001

https://www.bioprocessonline.com/doc/biopharmaceutical-trends-opportunities-for-the-new-year-0001

https://www.bioprocessonline.com/doc/biopharmaceutical-trends-opportunities-for-the-new-year-0001



unrest, unforeseen natural disasters, and criminal and fraudulent activity. Security of supply means minimizing the risks to the end-user that, in the context of this best practice guide, can be seen as the customer. It also affects the ability of a supplier to implement systems and processes that identify and mitigate events that impact on the supply chain.

Risk assessment is a common process that can be implemented to identify and mitigate risks, but for this to be undertaken with confidence, it is necessary to first map the supply chain so that all risks can be identified rather than relying on single-use systems, materials or suppliers. This is both the concept and purpose of undertaking SCM; it is a key foundation stage in wider risk management and BCM.

Vulnerabilities in the supply chain can result in costs for drug manufacturers and supply partners in both financial and non-financial resource and the potential for disruption. Crucially, however, supply chain vulnerabilities can threaten patient safety. It follows that drug manufacturers and supply partners have a legal, reputational and moral obligation to ensure that any vulnerabilities in the supply chain are identified and measures are taken to eliminate, reduce or mitigate the identified risks.

SCM can also help drug manufacturers and supply partners meet two critical business goals. The first is to promote the efficient and secure movement of goods (the chain of custody), and the second is to foster a global supply chain system that can withstand evolving threats and hazards, and rapidly recover from disruptions. A security strategy, focusing on the worldwide chain of custody, use of supply chain maps, raw material ‘value add’ touchpoints, networks of transportation, postal and shipping pathways, and assets and infrastructures (including communications and information infrastructures) is judged critical to meet the challenges and critical business goals and objectives.

4.4 Financial

Drug manufacturers and supply partners who embrace SCM can create value for biopharmaceutical customers and achieve a positive financial impact. Metrics such as operating profits, EBITDA (earnings before interest, tax, depreciation and amortization) and revenue growth can only indicate the success, or otherwise, of achieving the real performance driver of a business: increased customer value. Understanding customer value is critical to identifying ways to mature a business. Regulatory compliance and greater customer-driven pressure for better transparency (and confidence) in the supply chain, will drive change and increased transparency, from raw

material sources through to final products. There are opportunities for both drug manufacturers and supply partners to mitigate and remove risk while proactively managing changing regulations and customer needs. This creates a ‘value offering’ to biopharmaceutical customers as well as manufacturers and supply partners. This value can create long-term customers and differentiate drug manufacturers and supply partners from competitors with less developed supply chain management approaches. It will also increase the scope for new growth opportunities with existing customers through the confidence and resilience in supply achieved by effective SCM. As the industry faces its future challenges, those drug manufacturers and supply partners who embrace SCM as a way of increasing business value and as an integral element of supply chain management will be positively differentiated in the market. SCM offers an organization the ability to increase supply chain resilience.

4.5 Reputational

The reputation of drug manufacturers and supply partners is critical to their credibility and when building trust with patients and other companies and regulators in the industry. However, reputation can cover many things, e.g. reliability, quality, compliance or financial. A supply partner’s reputation can impact that of the drug manufacturers further downstream and across the industry and, conversely, the reputation of a drug manufacturer can inform business judgments reached by supply partners. Confidence, and an acceptance that companies are acting both ethically and in the best interests of the patient, will be viewed positively. Transparency of information throughout the supply chain is, perhaps, a particularly powerful business driver in an age where social media can quickly impact at individual, company and industry sector levels.

Developing a robust SCM process can greatly reduce the overall risk and help boost the reputation of drug manufacturers and supply partners. Taking a deeper look into an organization’s supply chain (globally as well as regionally) and identifying the risks as they relate to vendors further upstream in the value chain provides patients and drug manufacturers with a confidence that supply partners value transparency and, in a similar vein, confidence that drug manufacturers act in the best interest of all.

LaMattina, John. “When it comes to its reputation, the pharmaceutical industry continues to mess up” (Forbes Online, Sep 24, 2014)



5.0 Other factorsThere are other important drivers for the implementation of SCM more consistently across the industry.

Regulatory, legislative and economic demands add increasing weight to the need for transparency and, as identified earlier, supply chains are becoming more complex, lengthy and sometimes fragmented. Also, it seems generally accepted that demand for pharmaceuticals is forecast to significantly increase in global terms. The need to understand, interrogate, have early sight of potential problem areas and take corrective actions is judged to be vital if the industry is to meet future challenges. These include individual company’s strategic growth plans to meet forecasted demand over the next 5–10 years.

The current logistics landscape consists of complex, often multinational, multi-agency and multi-partner logistics nodes with differing national practices and standards. Third-party logistics suppliers, lack of clarity or insufficient supply chain or materials information and the challenges of consistently applying security and environmental controls, all contribute to the need for the deeper and wider understanding of supply chains provided by SCM.

Additionally, the requirement for, and need to comply with, industry audits requires resources, policies and processes that support legislative and regulatory standards and help to define mandatory supplier-qualification activities for wider and, arguably, more complex drug manufacturing production processes. Additionally, the need to better understand, and control, quality and reliability risks is relevant for undertaking structured SCM across a company’s supply chain to assess risks beyond the boundaries of an individual company and along the value chain. The scale, intensity and frequency of audits across the industry are increasing and using significant resources of drug manufacturers and supply partners. A move towards a more standardized approach to elements of the supply chain could reduce the resources needed to support audits.

SCM and using a standard supply partner questionnaire set is one measure that could reduce industry costs. The difficulties, and perhaps sensitivities, that are historically prevalent in parts of the industry can be overcome through more widespread use and acceptance of the need for transparency and use of a more standard approach at, and through, the various supply chain tiers. Use of this best practice guide, and the principles and outline processes it contains, is a part of the drive to adopt a more standardized approach in this area.

In parallel to the increasing number and scope of audits, and the greater complexity of the overall supply chain, data integrity and management have become important support functions as the industry adjusts to continued growth and the challenges ahead. Data elements and the business systems used to house that data are the foundation of any SCM program. Data needs to be accurate, complete, consistent and managed in a timely way. The data elements required to map a supply chain are often stored and managed in multiple areas. The primary data key used to connect and relate all of these areas is the material or part number. Elsewhere in this best practice guide is a suggestion on the potential for the industry to move towards accepting a more standardized supply partner questionnaire set for basic data and use of a single format as a part of the industry supply chain.

Transparency in the supply chain is no longer just a matter of ensuring efficiency and productivity; it is a regulated and market-driven necessity. Increasingly regulated safety and Good Manufacturing Process (GMP) standards require the ability to prevent contamination before it happens and reduce the impact of product recalls. The need to utilize emerging technologies to provide an accurate and comprehensive view into the supply chain is evident and the use of SCM is one area that can enhance a company’s response to this need.

By utilizing new technologies such as big data analysis, intelligent SCM and track and tracing technologies, drug manufacturers and supply partners can satisfy regulatory authority and customer demands by transforming their control and oversight of the entire supply chain from raw material source to end-user. With end-to-end transparency, the industry can increase and maintain high customer trust, loyalty and confidence, and establish brand equity while ensuring quality and satisfying regulatory authorities through a more effective and resilient supply chain.

Finally, the increase in complex, global and multi-partner logistics chains has led to a unique set of challenges over the last decade. In addition to the number of partners and regions involved, there are separate sets of regulations that must be adhered to, which are based on the origin and transportation of the product. Third-party logistics organizations have thrived in this environment, providing platform services and standardized documentation. As a result, the overall supply chain can sometimes be characterized by fragmentation and a lack of transparency. The responsibility lies with drug manufacturers and supply partners to ensure and prove that products entering the industry are transported and stored safely, legally and securely. It is vital to understand the cultures and dynamics of multiple regions to protect raw material and products and to minimize the risks in their quality and supply.



6.0 What could the biopharmaceutical industry do differently?

Other mainstream and more mature industries such as Automotive and Aerospace have invested heavily in ensuring the resilience, integrity and sophistication of their supply chains and are working closely with manufacturers and supply partners to meet current and forecast demand. The opportunity is available for the biopharmaceutical industry to adopt and implement a more resilient, contemporary and standard approach to elements of its supply chain. Some specific areas that could be addressed include:

• enabling automatic lot verification of details through a database

• obtaining data from supply partners via lot coding or other means

• utilizing compendial materials that use an industry-wide standard with controlled specifications

• improving Bill of Materials (BOM) detail and accuracy to understand key attributes to help control or assist optimum manufacturing

• leveraging Tier 1 audits for deeper supply chain tiers, thereby reducing industry-wide costs and providing a more effective and efficient inspection regime to benefit all drug manufacturers and supply partners.

The above list is representative of potential areas for improvement. Section 7 of this best practice guide addresses the specific need of implementing and adopting a standard supply partner questionnaire. This can be used by drug manufacturers and supply partners to establish basic material data and its source as part of the wider initiative to implement SCM across the industry.

7.0 Supply partner questionnaire – template

One specific concern of drug manufacturers and supply partners is the different approaches and formats for what might be reasonably described as basic material and supply data. This section provides a suggested template that can be used by drug manufacturers and their supply partners as a part of an SCM implementation.

An example of a (completed) SCM template is included as Appendix B. This seeks to simplify the data collection process for suppliers and manufacturers as the template can be shared in the same format upstream and downstream.

What? The purpose of the template is to align the format in which supplier and sub-tier supplier data is collected and to align the expectations regarding information to be obtained and shared.

It is suggested that, where possible, ‘Open Data’ sources are used, as well as that available internally, and the questionnaire pre-populated to reduce the effort needed by suppliers and demonstrate a shared commitment to simplifying data collection and management.

If a 3rd party company is hired for collecting and maintaining SCM related data, it is important that this arrangement includes assurance on the requirements for data security and integrity to help build the necessary confidence between the parties concerned. If that cannot be guaranteed, it is recommended that an alternative Service Provider be considered.

How to use the templateOne template should be used per raw material; however, multiple raw materials could be added to the template as long as the same supplier provides all the raw materials listed.

The template enables the manufacturer or supplier to add multiple numbers of suppliers, sub-tier suppliers and raw materials. It can also be expanded, meaning the supply chain could be mapped to tier -n.

If the template is imported into a spreadsheet then functionality could be added, e.g. automatically generated boxes creating space for sub-tier suppliers to be added. It also enables the creation of reports and statistics and can provide a holistic overview of the supply chain for a specific product and/or raw material.

The template could be shared directly with suppliers and sub-tier suppliers using a web-based format, which is preferred especially if data is collected for several products. Such a solution could enable subsequent access to the tracking of responses, statistics, re-assessments and archiving. When exchanging sensitive information of this kind, manufacturers and suppliers should ensure collected data is shared and archived securely.

A web based, or other, solution should be selected based on the size of the scope and complexity of data required. Note that the number of sub-tier suppliers could expand significantly when reaching Tier 3 and beyond. For example:

Product ATier 1 suppliers 10* Tier 2 suppliers 10x3=30 Tier 3 suppliers 30x3=90

* based on 10 raw materials and suppliers used in Product A and each supplier listing three sub-suppliers per raw material.



Figure 1: Example of a Raw Material Supply Chain Map

When? Manufacturers and suppliers should prioritize products, and related raw materials and suppliers, and agree internally on what to include in the scope of data collection, e.g. only critical raw materials. However, there is a risk of mismatched expectations among customers and suppliers in different tiers of the supply chain, as the specific priorities and interpretations on scope might vary depending on product prioritization within each company. This needs to be aligned and agreed on a case-by-case basis between manufacturers and suppliers.

Who? Apart from collecting data for the selected raw materials and (primary – Tier 1) suppliers, manufacturers and suppliers should consider implementing procedures to cover sub-tier supplier data collection when qualifying new raw materials and suppliers. The desired level of sub-tier visibility should be decided by each manufacturer and supplier depending on the goal of the SCM exercise.

How often? Even though supplier agreements often include supplier change control covering changes of suppliers in the supply chain, both drug manufacturers and supply partners need to decide when, and how often, to re-evaluate that the data collected is still accurate. Manufacturers and suppliers should also consider whether to increase or decrease the scope and complexity for SCM dependent upon company specific assessments on need.

RepositoryThe collected data should be stored in a secure system with the ability to limit access to data of a sensitive nature. This is necessary if, for example, a Confidential Disclosure Agreement (CDA) has been signed limiting the sharing and use of the collected data.

BioPharmaMfg

BioPharmaSuppler

Manufacturer

Manufacturer Distributor Manufacturer

Manufacturer

Manufacturer

Distributor

Notes to support the standard supply partner questionnaire template Data integrity refers to the overall completeness, accuracy and consistency of data , e.g. sub-tier supplier information shared between suppliers and customers/organizations and eventually third-party companies.



8.0 Supply chain mapping – potential implementation model

Drug manufacturers and supply partners that understand how SCM can support the mitigation of risks will have a strategic and competitive advantage when a supply interruption occurs. They will ultimately become a more reliable participant in the market. With the predicted growth in the industry, the likelihood of supply chain disruption increases, putting additional pressure on the level of risk management and associated BCM strategies. Companies must react and manage these risks by leveraging the power of SCM, and related event monitoring, to sense and respond to changing market demands and the regulatory environment.

This best practice suggests, in Appendix C, a possible implementation model that drug manufacturers and supply partners can consider when seeking to implement SCM as a part of their risk management and BCM. This will improve their ability to protect their supply chain by increasing their knowledge, understanding, resilience, agility, flexibility and recovery from disruptive events; whether predicted or unforeseen.

The process starts by identifying current and possible risks, then mapping vulnerable spots in supply chains and implementing track-and-trace expertise that can bolster a company’s supply chain flexibility and agility. Commercially available software tools are available to conduct these operations, with many of them establishing practices aimed at planning, monitoring and protecting the entire supply chain. The following section provides a guide for the possible implementation of SCM within a company. It is not intended as an exhaustive or definitive step-by-step process, but rather indicates (using the process map at Appendix C) the various considerations and stages that a company can adopt when implementing SCM.

The most important question for an organization to ask itself before mapping its supply chain is “Why do we need to do this?” Typical answers include compliance, risk identification and avoidance or mitigation, supply chain optimization, supply chain strategy and the reputation of a company and the wider biopharmaceutical industry (which is an area often not considered). It is important to understand that SCM is a crucial step in understanding company capabilities, risks and strengths. SCM can provide an insight into areas of risk as well as highlight areas of strength that an organization can leverage. These can be seen as potential differentiating factors in its future success or failure. The need to adopt, adapt and seek continuous improvement in the application of modern supply chain tools and techniques is key to future business success as the industry grows.

Once company decision makers are aligned on why SCM is critical to the organization, one can start developing the scope of the activity. The scope can start by asking what should the company map and to what breadth and depth? Possible questions could be: what materials are critical or essential to production? And is there a supplier that has a significantly large percentage of critical materials or a specific impact on regulatory activity?

It is important that selection of the scope of the company alignment on SCM breadth and depth focuses business efforts so that when piloting the process, the information adds value and is actionable. This will provide tangible results that can be used to support the expansion of the pilot and improve buy-in of the supply chain network. When defining the scope of the initial SCM pilot, it is also important to decide on the depth and breadth, sequence and priority of work; for example, should the company map X number of Tier 1 suppliers or go to Tier 1, 2, 3, 4, etc. for specific materials/suppliers?

Once the scope has been identified, it is time to define the criteria that is relevant to the company. As an example, assessment of priorities for mapping and what factors are most crucial and relevant. Is the greatest business value created by looking for a better way to track qualified suppliers or should the company track third-party material suppliers? Is it necessary to understand supply lanes to minimize cost, lower cycle times or reduce risk or should one seek to identify and concentrate on limiting the impact of a supply disruption? These and many other questions should be considered.

What information does the company wish to extract from suppliers to support company specific mapping activities? Determine what information is most crucial so that you can ensure that what is gathered during the SCM process – specifically the SCM pilot stage recommended - is relevant and applicable to the company and its specific business needs and objectives

If it is determined that the company needs to reach out to suppliers, what information is needed and how can one then obtain and maintain data? If possible, it is suggested that the quantity and detail of information needed from suppliers should be minimised as this can assist in reducing the complexity of the process for maintaining those portions of SCM maps.

After considering the above and agreeing priorities specific to a company’s business needs and environment, the next stage should allow an SCM pilot to begin using, at this initial point, a small group of suppliers with whom there is a solid business relationship and high level of trust. This next step will vary based on who is leading the SCM pilot and whether or not a commercial ‘off the shelf’



SCM solution through a third-party provider or an ‘in house’ developed SCM system is being utilized. Regardless of SCM solution however the need for communication throughout is vital.

It is essential that in undertaking the SCM ‘journey’, the time to explain, internally and externally, why SCM is being introduced into the company and what is intended with the information being sought is factored into the SCM project plan. Confidence building across the supply chain is an important component of both initial SCM pilot and subsequent development. It is recommended that during this stage, time is allocated to review the process internally as well as with those companies selected to be a part of the SCM pilot. Areas to focus on include:

• data accuracy – use the feedback from suppliers to ensure master data is accurate

• response times and consistency of data received

• data appropriateness – is the right information being collected?

• questionnaire structure and usability

• receipt and storage of the data (and the need to ensure data protection)

• ability to extract usable information and summarize, quantify or identify action items, roles and responsibilities

• overall process flow of the SCM implementation project.

Based on the findings from the initial SCM pilot, appropriate changes can be made to SCM design process and then implemented as ‘lessons learned’ before seeking to repeat with the next supplier; again, communication throughout those stakeholders impacted remains key.

Once comfortable with the process, the SCM journey can continue with, as an example, expansion to the rest of the company’s Tier 1 suppliers and possibly additional tiers within these suppliers dependent on resource and business assessment of need.

At this stage, feedback obtained from the SCM process can be used to assess risk or monitor events within the organization. Ultimately, the SCM completed by suppliers will become an input to the company’s own Business Continuity Management (BCM) where both risk assessment and risk mitigation can be progressed to eliminate, or reduce, those risks to which the company is exposed. The company can also assess relative maturity in its application of SCM by reviewing the criteria and characteristics reflected in the SCM

Maturity Model included in this Best Practice at Appendix D and development, or refinement, of the company Business Continuity Plan (BCP). This is critical to both implementation and maintenance of an important, dynamic and key tool in both management of the company supply chain and wider company business documentation systems and processes.

In summary, the advantages of SCM and an associated alert system are:

Supply chain maps• proactively manage supply chain continuity

• visibility to sub-tiers of supply chain

• improves visibility to risk factors

• identifies potential cost-saving actions

• logistics implications – costs and lead-time

• common materials common suppliers

• prevents loss of ‘tribal knowledge’ through employee attrition.

Alert system• quickly respond to potential supply chain impacts

• allows supply chain teams to focus efforts on potential risks

• allows quick execution of contingency planning

• allows quick response to customer inquiries.

9.0 Supply chain mapping – maturity model

If a company wishes to implement SCM, it is appropriate to assess how mature it is in terms of its level of understanding and the actions it takes in the supply chain. Appendix D contains a proposed maturity model that can be considered best practice when undertaking the maturity assessment. The following explains and help in interpretation of the suggested maturity model.

Having a baseline for comparison is always a good start when considering the question: How mature is the business compared to what industry experts would suggest as the optimal achievable SCM position?

To establish the level of maturity, a model has been developed that will help quickly identify the level that corresponds to the preparedness of company business relative to an optimal state. Five levels of maturity have been identified ranging from Level 1 (little to no knowledge of mapping requirements) through to Level 5 (an advanced level of awareness of the supply chain).

Note If using a third-party provider to implement SCM in the company, special effort is required to create the initial data extract from the source system. This extraction process and the data extracted should be thoroughly tested and reviewed as repeatability is crucial for data refreshes.



Table 1 below details the basic assessment criteria that should be used to ascertain where the business sits on its journey towards optimal positioning of SCM.

Level 1 – little or no investigation into SCM has been resourced or encouraged. This is often the case where mapping is not centrally governed by set procedures or there is no requirement within a responsible department’s key performance indicators. It may be that individuals (e.g. category managers) have knowledge and records of potential mapping detail but this is not centrally coordinated, retrieved, controlled or monitored. Level 1 mapping indicates that single points of failure exist in an environment where something as simple as a person leaving a company could lead to a loss of data or material visibility or data update.

Level 2 – although still minimal, this level of maturity indicates that the requirement for mapping is understood, processes exist and these have been specifically developed to meet the intent. In addition, specific resources have been allocated to ensure progress in the form of a dedicated governance entity or disseminated among individuals with specific responsibility for SCM data updates and integrity as a measurable key performance indicator output. To meet the basic requirements of Level 2, a straightforward supplier questionnaire could be distributed to all Tier 1 suppliers. An example of a potential standardized approach to a basic supplier questionnaire is included within this best practice (see Section 7).

Level 3 – an understanding of the supply chain has emerged within the organization, which drives additional mapping of lower-tier materials and suppliers. The driver

for lower-level mapping could be a materials commonality across suppliers or across products, which highlights their criticality. At this stage, organizations are scheduling a refresh of required supply chain information and SCM specific requirements , and are looking at methods for monitoring their supply chain for possible disruption. This is the turning point for developing supply chain resiliency.

Level 4 – previous levels can be achieved with limited reliance on customized or automated supply chain system support. At Level 4, success will require buy-in at all levels, which comes with an expectation that resources will be sponsored and understood as being necessary at a strategic planning level. A decision point may have been reached at Level 3 but, if not, by Level 4 it is inevitable that ongoing governance will be retained in-house or outsourced to a cloud-based provider. With the varying levels of mapping maturity between suppliers and customers, and the emergence of multiple service providers, it is possible that a customer will need to work in a hybrid model of mapping solutions.

Level 5 – SCM is integrated into the organizations and is an integral part of the business continuity structure. At this level, the company is prioritizing and driving preventative measures over more reactive measures. This is facilitated by an environment where customers and suppliers have agreed to clearly defined priorities and are aligned on a harmonized process. Initial costs may increase but can be significantly reduced if priorities are

Table 1: Supply chain mapping maturity model: business capabilities – characteristics

Level 1 Level 2 Level 3 Level 4 Level 5

No accessible

or basic supply

chain information/

documentation

which can be

manually retrieved

upon request.

Systematic supply

chain mapping

process with a

standardized

set of questions

(questionnaire)

enabling full

visibility to tier 1

suppliers.

Company defined

critical materials

successfully mapped

for tier 1 and some

beyond (– refreshed

on a time period –

typically once a year )

Discrete monitoring of

SC events for mapped

materials.

SCM: fully integrated SCM

into business processes

Monitoring: implemented

multi tier monitoring

including analysis and

regular reviews

Risk assessment: output of

SCM/Monitoring integrated

into your risk assessment

process BCM

SCM: Multi tier for critical items. Known common sub tier

conflicts/commonalities. Systematically refreshed.

100% of materials mapped tier 1 and a high percentage

mapped to a conclusion.

Monitoring: Automated event notification. KPI for response

time. Real time data feeds Dedicated owners for each

Supplier and/or material

Risk Assessment: Closed loop of the mapping/monitoring.

Standardised approach. Documented risk mitigation/

treatment strategies

BCM: Embedded in Governance framework (BC). Support/

oversight of senior executive team. Input for supplier reviews

(KPls)



well managed, particularly those related to material and supplier identified risks. At Level 5 maturity, SCM is one dynamic that is required as a fundamental node of business intelligence to accurately generate business continuity risk within the reactive and preventative space.

The industry should aspire to Level 5 compliance. Inevitably, it will be required by regulators as a Good Manufacturing Practice (GMP) pre-requisite for most customers, principle manufacturing suppliers and contract manufacturing organizations.

10.0 10.0 Supply chain mapping – performance management system

This best practice guide provides a potential implementation model and associated suggestions linked with standardization of basic data through a supplier questionnaire and a possible maturity model assessment to better manage increasingly complex supply chains and meet the demands placed on the industry. Another initial aim of the project was to provide a potential model for the design and operation of a specific performance management system. However, as the best practice proposals for SCM were developed, it was decided that a specific performance management system would, at best, prove potentially cumbersome and be an added complication that would probably not survive the ‘why are we doing this?’ question. Accordingly, this best practice guide has a limited scope to only focus on those characteristics that typically might feature in a company’s approach to performance management.

Appendix E contains suggestions of relevant performance management characteristics that might feature as best practice. For ease of reference, they have been grouped into characteristics that might be appropriate areas to measure and analyze linked directly to the five levels proposed in the maturity model in Appendix D. These will help a company as it progresses through the differing stages of maturity when designing and implementing SCM as an integral part of wider risk management and business continuity.

11.0 11.0 ConclusionThis best practice guide is not intended as a detailed technical treatise on the design and implementation of SCM. Rather, it seeks to stimulate thought and propose a range of areas that the biopharmaceutical industry might wish to consider adopting to move towards a more consistent approach in managing an increasingly complex supply chain and meet the growing demands placed on it. It provides a suite of principles and suggested processes together with a possible implementation model that might be considered and tailored to reflect specific and unique priorities and business models for companies across the biopharmaceutical industry.

There are many SCM companies that will, depending on need, provide a bespoke or off-the-shelf software solution to meet the requirements of a biopharmaceutical business; some as part of a total or holistic solution, while others more as part of a wider and partnered approach. It is not the purpose of this best practice guide to recommend which option a company should progress to manage its company-specific requirements. The guide seeks to promote discussion and provide a possible process map and maturity model that companies in the biopharmaceutical industry might wish to consider to meet company-specific requirements and demonstrate why SCM is key as the industry matures and develops and as the demands for greater transparency increase. As recent geopolitical and global events such as natural disasters through adverse weather or perhaps even civil unrest have shown, there is a vital business need to see SCM as a key enabler to provide effective and dynamic risk management and business continuity planning. This best practice guide posits that those companies who adopt, and adapt, to these needs will be those that can differentiate to benefit patients, company and wider industry.



12.0 12.0 RecommendationIt is recommended that those involved in supply chain management consider the proposals outlined in this best practice guide and examine whether, as the biopharmaceutical industry matures, existing processes are sufficiently resilient to effectively manage an increasingly complex supply chain. Specifically, they should consider whether adoption of SCM and a move towards a more standard approach across the industry might better meet forecasted demand.

It is emphasized throughout this best practice guide that SCM should be seen as a foundation for, and fully integrated with, risk management and BCP. Effective management of risk cannot be undertaken without a clear understanding of the whole supply chain and the increasingly complex and global logistics that underpin supply. Mapping the supply chain, identifying areas of potential risk and seeking to mitigate these risks are judged crucial to those companies who will successfully transition to meet anticipated industry-wide growth over the next 5–10 years and beyond.



Acronym/abbreviation Definition

Business continuity management (BCM)

A framework for identifying an organization's risk of exposure to internal and external threats. The goal of a BCM system is to provide the organization with the ability to effectively respond to threats, such as natural disasters or data breaches, and protect its business interests. BCM includes disaster recovery, business recovery, crisis management, incident management, emergency management and contingency planning. A BCM system emphasizes the importance of:

• understanding continuity and preparedness needs, as well as the need for establishing a BCM policy and objectives

• implementing and operating controls and measures for managing an organization’s overall continuity risks

• monitoring and reviewing the performance and effectiveness of the BCM system

• continual improvement based on objective measurements.

Business continuity plan (BCP)

The process of creating systems of prevention and recovery to deal with potential threats to a company. Any event that could negatively impact operations is included in the plan, such as supply chain interruption, loss of or damage to critical infrastructure (e.g. major machinery or computing/network resource). As such, BCP is a subset of risk management.

Cold chain A temperature-controlled supply chain. An unbroken cold chain is an uninterrupted series of storage and distribution activities, which maintain a given temperature range.

Commodity A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity is essentially uniform across producers.

Critical material A component or material that is essential for the firm's continued operations. It can be in short supply, have a long lead time, is expensive or requires special handling procedures.

Disaster recovery time The recovery time duration of time and a service level within which a business process is restored after a disaster (or disruption) to avoid unacceptable consequences associated with a break in business continuity.

Event monitoring The process of collecting, analyzing and signaling event occurrences that could impact the supply of material or services.

Event notification The timely identification and communication of a supply chain event. Notifications allow an organization to take proactive, corrective actions to maintain supply if there is an event or potential disruption to supply.

Finished goods Goods that have been completed by the manufacturing process or purchased in a completed form, but which have not yet been sold to customers.

Force majeure ‘Chance occurrence, unavoidable accident’ is a common clause in contracts. It frees parties from liability or obligation when an extraordinary event or circumstance beyond their control prevents one or both parties from fulfilling their obligations under the contract, such as a war, strike, riot, crime or an event described by the legal term ‘act of God’ (hurricane, flood, earthquake, volcanic eruption, etc.). In practice, most force majeure clauses do not excuse a party's non-performance entirely but only suspends it for the duration of the force majeure.

GMP A system for ensuring that products are consistently produced and controlled according to quality standards. It is designed to minimize the risks involved in any pharmaceutical production that cannot be eliminated through testing the final product.

Incident monitoring See event monitoring.

13.0 Appendices

Appendix A: Glossary




Lead times Critical path lead time (cumulative lead time) The total time required to make an item if no inventory existed and you had to order all the raw materials and make all sub-assemblies level by level. Bills of material can automatically calculate this value or you can manually assign a value.

Material lead time The time from placing a material order to its delivery (or being ready for delivery).

Preprocessing lead time The time required to release a purchase order or create a job from the time you learn of the requirement.

Processing lead time The time required to procure or manufacture an item.

Post-processing lead time The time required to make a purchased item available in inventory from the time you receive it (including quarantine, inspection, etc.).

Transportation lead time The time required to deliver material from the manufacturer or manufacturer’s distribution node to the customer.

Node A supply chain is a network of nodes or locations that materials pass through on their way to a manufacturing organization and can include factories, warehouses, distribution centers and ports.

Packaging material Material such as packaging or wadding used to protect something. Packaging materials can also be used as a marketing tool to differentiate products through color, design or dimensional characteristics.

Raw material The basic substance used as an input to a production process for subsequent modification or transformation into a finished good. There are two applications: media and resin and commodity can sometimes be used interchangeably to refer to these, which can lead to some confusion depending on where a firm sits in the supply chain.

Recovery time objective The target duration of time and a service level within which a business process must be restored after a disaster (or disruption) to avoid unacceptable consequences associated with a break in business continuity.

Regulatory agency/body A regulatory agency (also regulatory authority, regulatory body or regulator) is a public authority or government agency responsible for exercising autonomous authority over some area of human activity in a regulatory or supervisory capacity. An independent regulatory agency is one that is independent from other branches or arms of the government.

Regulatory agencies deal in the areas of administrative law, regulation or rulemaking (codifying and enforcing rules and regulations, and imposing supervision or oversight for the benefit of the public). The existence of independent regulatory agencies is justified by the complexity of certain regulatory and supervisory tasks that require expertise, the need for rapid implementation of public authority in certain sectors and the drawbacks of political interference. Some independent regulatory agencies perform investigations or audits, and others may fine the relevant parties and order certain measures.

Regulatory agencies are usually a part of the executive branch of the government and they have statutory authority to perform their functions with oversight from the legislative branch. Their actions are generally open to legal review. Regulatory authorities are commonly set up to enforce standards and safety or to oversee the use of public goods and regulate commerce.

Regulatory requirements

The restrictions, licenses, and laws applicable to a product or business, imposed by the government.




Risk factors Risks have many different attributes and components, all of which need to be considered and addressed to quantify and characterize a risk appropriately.

External supply chain risks These can be driven by events either upstream or downstream in the supply chain. There are five main types of external risks:

demand – caused by unpredictable or misunderstood customer or end-customer demand

supply – caused by any interruptions to the flow of product, whether raw material or parts, within your supply chain

environmental – from outside the supply chain; usually related to economic, social, governmental and climate factors, including the threat of terrorism

business – caused by factors such as a supplier's financial or management stability, or the purchase and sale of supplier companies

physical plant – caused by the condition of a supplier's physical facility and regulatory compliance.

Internal supply chain risks These provide better opportunities for mitigation because they are within your business's control. There are five main types of internal risks:

manufacturing – caused by disruptions of internal operations or processes

business – caused by changes in key personnel, management, reporting structures or business processes, such as the way purchasers communicate with suppliers and customers

planning and control – caused by inadequate assessment and planning, which amount to ineffective management

mitigation and contingency – caused by not putting contingencies (or alternative solutions) in place in case something goes wrong

cultural – caused by a business's cultural tendency to hide or delay negative information. Such businesses are generally slower to react when impacted by unexpected events.

Risk criteria The terms of reference (standards, measures or expectations) used in making a judgment or a decision on the significance of risk to be assessed. These can include associated cost and benefits, legal and statutory requirements, and the concerns of stakeholders.

Risk evaluation/methodology

The determination of risk management priorities through establishing qualitative and/or quantitative relationships between benefits and associated risks.




Risk management The process of identifying, assessing and controlling threats to an organization. These threats or risks could stem from a wide variety of sources, including financial uncertainty, legal liabilities, strategic management errors, accidents, security threats, data-related risks and natural disasters.

Risk management is the coordinated and economical application of resources to minimize, monitor and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities. Risk management’s objective is to assure that uncertainty does not deflect the endeavor from the business goals.

A risk management plan includes a company’s processes for identifying and controlling these threats.

Risk mitigation The steps taken to reduce adverse effects. There are four types of risk mitigation strategies that hold unique to business continuity and disaster recovery.

Risk acceptance This does not reduce any adverse effects. This strategy is a common option when the cost of other risk management options (such as avoidance or limitation) may outweigh the cost of the risk itself. An organization will use this strategy to avoid costs or low possibilities of occurrence.

Risk avoidance The action that avoids any exposure to a given risk and is typically the most expensive mitigation option.

Risk limitation This is a common risk strategy. It limits a company’s exposure by taking some action. It is a strategy employing some risk acceptance along with some risk avoidance or an average of both.

Risk transference The process of handing risk off to a willing third party.

Risk ranking Utilizing a matrix to perform a risk assessment, and form of ranking of their risks. The matrix has ranges of consequence and likelihoods as axes. A risk matrix gives the manager and the decision maker a clear view of what the risk is, what is involved (in terms of procedural changes, costs, behavioral adjustments, etc.), and what amount of time can be afforded to it given the severity and probability of the risk event.

This helps visualize, in an organized manner, the risks an organization faces in quantitative and qualitative terms so it can plan and make informed decisions about actions when the situation arises.

Risk score A value assigned to represent the relative risk ranking to allow the prioritization of risks.

Security of supply A guaranteed supply of goods and services sufficient for an organization to function in an uninterrupted and efficient manner.

Sub-tier supplier Suppliers that provide goods and services upstream from your Tier 1 supplier, including Tier 2, 3, 4, etc.

Sub-tier supplier dependencies

A situation where multiple suppliers are dependent on the same sub-tier supplier for critical goods or services.

Supplier transparency The process of gaining visibility into your raw material supply chain and includes all aspects of a supplier’s network, process capabilities, sources of supply and risk mitigations.

Supplier visibility The ability to look into your suppliers' operations and can include their global footprint/locations, process capabilities, their sub-tier supply chain, BCPs and disaster recovery times. Information is used for the evaluation of supply chain risk and the development of proactive mitigation plans.

Supply chain event An occurrence or situation that can impact your supply chain and put your continuity of supply at risk.




Supply chain mapping The practice of documenting the various nodes of your supply chain. Can include locations of direct suppliers (Tier 1) as well as the suppliers to Tier 1 suppliers (sub-tier) and transpiration nodes within the entire supply chain.

Supply chain resiliency The ability of an organization’s supply chain to recover from disruptions and disasters. Resiliency is achieved by building redundancy and flexibility into your supply chain.

Tier 1 supplier A supplier that provides goods and services directly to a manufacturer.

Tier 2 supplier A supplier that provides goods and services directly to a Tier 1 supplier.

Supplier tiers Suppliers can and frequently do have multiple tiers associated with them. A supplier can provide materials directly to a manufacturing organization, thereby having a Tier 1 designation. It can also supply components to another of the organization’s Tier 1 suppliers for additional processing, thereby having a Tier 2 designation.

Appendix B: Supply chain mapping – Standard template

Tier 1

Tier 2

Tier 3

Items#: 123456

Item description: Item 1

Supplier name: Supplier 1

Distr. / Mfg: Mfg.

Supplier address (primary site): Street 1

Country: Sweden

Alternative site address: N/A

Separate warehouse address: Street 2

Items#: 123456


Supplier name: Supplier 1

Distr. / Mfg: Mfg.


Country: USA



Functionality could be built into the template

e.g. automatically generated boxes for sub-tier

suppliers and report functionality enabling

a holistic overview of the supply chain for a

specific product and/or raw

Items#: 123456


Supplier name: 123456

Distr. / Mfg: Mfg.


Country: Sweden





Appendix C: Process map – Possible implementation model

Supply Chain Mapping: A potential implementation model - version 2@ Sept 2017

Appendix D: Maturity model

Supply Chain Mapping maturity model: Business capabilities - characteristics

Level 1 Level 2 Level 3 Level 4 Level 5

No accessible

or basic supply

chain information/

documentation

which can be

manually retrieved

upon request.

Systematic supply

chain mapping

process with a

standardized

set of questions

(questionnaire)

enabling full

visibility to tier 1

suppliers.

Company defined

critical materials

successfully mapped

for tier 1 and some

beyond (– refreshed

on a time period –

typically once a year )

Discrete monitoring of

SC events for mapped

materials.

SCM: fully integrated SCM

into business processes

Monitoring: implemented

multi tier monitoring

including analysis and

regular reviews

Risk assessment: output of

SCM/Monitoring integrated

into your risk assessment

process BCM

SCM: Multi tier for critical items. Known common sub tier

conflicts/commonalities. Systematically refreshed.

100% of materials mapped tier 1 and a high percentage

mapped to a conclusion.

Monitoring: Automated event notification. KPI for response

time. Real time data feeds Dedicated owners for each

Supplier and/or material

Risk Assessment: Closed loop of the mapping/monitoring.

Standardised approach. Documented risk mitigation/

treatment strategies

BCM: Embedded in Governance framework (BC). Support/

oversight of senior executive team. Input for supplier reviews

(KPls)

Assess business need, priority & impact

Pilot process

Tool

sel

ecti

on

Determine mapping scope

Evaluate mapping process

Define criteria/attributes desired for mapping

Continue mapping process

Utilizemapping processresults

Revise process Continuous improvement

Risk

• Evaluation

• Quantification

• Mitigation

• Resiliency

Compliance

Supply chain

Maturity

Priority

• Supplier

• Material

• Product

Extent

• GMP

• Critical

• All

• Tier

• Revenue

Supplier

• Sites

• Location/

address

• Process type

• Alternative

sites

• Recovery time

• Solvency*

Materials

• Source

• Sources source

• Redundancy

• Tier

• Revenue

Logistics

• Transportation

lanes

* May require 3rd party input

Defined subset

• Supplier

• Product/BOM

• Material

category

Communicate

• Internally

• Externally

Training

Execute

controlled pilot

Data set

• Data extraction

• Quality of

source data

Supplier response

• Data

completeness

• Quality of

responses

• Data usefulness

• Suppler’s

comfort in

sharing

Process

scalability/

repeatability

Expand level of

mapping process

• Suppliers

• Materials

• Tiers

• Products

Evaluate results

Refresh interval

Training



Appendix E: Performance management system

Performance management system: "Brain Storm" outputs

Level 1

Basic SC Info.

Level 2

Systematic

Level 3

Monitor

Level 4

Risk assessment

Level 5

Fully embedded

Supply chain information available

Country of origin

Basic filing data

Measurable delivery performance

Reliability

Non conformance data

Patient safety

Regulatory

Security of supply

Financial data

Reputational

% of tier 1 mapped

Number of tiers mapped

Identification of all critical materials/components (or X %)

Threshold/target stretch

Critical items mapped

For prog. mangt: supplier - tier

1 - adherence

SC questions % answered

SC questions - response time

Supplier response time to alerts & events

Number of suppliers mapped as a % to total suppliers

Monitoring X time patient - frequency

Accuracy of maps - verified?

% mapped at tier 1

% mapped - region

% mapped category of material

Distribution % by shipping mode

% of tier 2 mapped

ID - alternative sites

Mature supply chain mapping & change management system(s)

% of suppliers shared

% shared by: Tiers

Region Category of material

Logistic links

Analysis of critical “nodes”

% of products mapped

% mapped at: Tier 1 Tier 2 Tier 3 Etc etc...

Broad acceptance of principles and practices

X % of adoption

Threshold - target - stretch KPIs

% of BCP in place

Supply disruption recovery speed

KPI - drug shortage

% OTD “hits” supply disruption

Impact of performance management system over time in supply chain mapping development & maturity



Permission to useThe contents of this report may be used unaltered as long as the copyright is acknowledged appropriately with correct source citation, as follows “Entity, Author(s), Editor, Title, Location: Year”

DisclaimerThis document represents a consensus view, and as such it does not represent fully the internal policies of the contributing companies.

Neither BioPhorum nor any of the contributing companies accept any liability to any person arising from their use of this document.

supply chain mapping a best practice for the …

Documents