wyeth is now a part of pfizer inc. the merger of local wyeth and pfizer entities may be pending in...
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Wyeth is now a part of Pfizer Inc. The merger of local Wyeth and Pfizer entities may be pending in various jurisdictions and is subject to completion of various local legal and regulatory obligations.
Rethinking Global Network Design
Oscar PerezVice President – Delivery SolutionsPfizer Global Logistics & Supply
Wyeth is now a part of Pfizer Inc. The merger of local Wyeth and Pfizer entities may be pending in various jurisdictions and is subject to
completion of various local legal and regulatory obligations.
Today’s Discussion
• Global Delivery Chain
• Global Logistics & Supply Evolution
• Market Logistics Network Model
• What’s next
• Q&A
Wyeth is now a part of Pfizer Inc. The merger of local Wyeth and Pfizer entities may be pending in various jurisdictions and is subject to
completion of various local legal and regulatory obligations.
What Is Driving Our World?
CONVEYANCE INTEGRITY:
ECONOMIC, POLITICAL, COMPLIANCE & SECURITY
INTERNATIONAL TRADE
TRANSPORTATION
GLOBALIZATION: SUPPLY CHAIN,
CUSTOMERS, SUPPLIERS
PFIZER STRATEGIES:
CORPORATE, COMMERCIAL, PGM, ETC.
SUSTAINABILITY
INFORMATION TECHNOLOGY
This defines who we are and what we’re aboutWorking together for a healthier world
Mission This explains how we will achieve our PurposeApplying innovative science to improve world health
• Discover, develop and ensure access to safe and effective medicines• Partner with key stakeholders and earn their trust• Build productive and enduring relationships with governm’ts &
communities• Make Pfizer a great place to work• Create long-term value for shareholders
Our Mission is based on these commitments to stakeholders. Wemust focus on creating value and earning trust for all our
stakeholder groups.
• Refocus and optimize the patent-protected portfolio• Find new opportunities for established products• Grow in emerging markets• Invest in complementary businesses• Instill a culture of innovation and continuous improvement
Commitments
StrategiesThese build on the priorities and represent the best opportunities to invest in our future, create value with science and technology and deliver innovative health care.
• Maximize revenues• Manage costs• Strengthen our culture• Meet our commitments to stakeholders• Engage each other
This is where the work begins. These represent the fundamentals for doing business successfully.Enduring Priorities
These underlie all we do, guiding how we behave and how we run our business.
• Customer Focus• Integrity• Respect for
People• Teamwork• Innovation
• Performance• Community• Leadership• Quality
Purpose
By executing on all these elements of Our Path Forward, we will lay the groundwork for a promising future for Pfizer
Values
Wyeth is now a part of Pfizer Inc. The merger of local Wyeth and Pfizer entities may be pending in various jurisdictions and is subject to
completion of various local legal and regulatory obligations.
Organization Framework
Commercial Businesses
PGMCustomer interface
Operations
PGM Operating Units
• Business interface/partnership• Site operational leadership
Network Performance
• Leadership / guidance on efficiency and effectiveness of operations
• Operational Excellence• Contract Manufacturing• Pfizer Global EngineeringNetwork Performance
Strategy & Supply Network Transformation
Quality
Global Manufacturing Services (GMS)
Network Enabling Functions(Finance / HR / IT / Procurement / EHS)
PC/Onc EP
PC Onc. EP
ConsEM NutriAHSpec/Bios/Vac
EM NutriConsAH
BiosCM
ConsCM
NutriCM
Global Logistics & Supply
Rx Contract Mfg (CM)Global
Spec
&Vac
Key impact on Global Logistics & SupplyThe new Business Units
Primary Care
Specialty Care
Oncology
Established Products
Emerging Markets
• Support for new product launches: Life-Cycle-Management and new innovative products • Increase in Direct Sales and roll-out of DTP in EU; channel management (i.e. home delivery)• Customer focus. Local solution but global knowledge transfer; High and diverse service level requirements.
• Increase in Direct Sales to support top line growth at Point-of-Sale; broad portfolio• Speed to market critical for supply chain (especially for product (re-) launches)• Efficient distribution: High cost sensitivity, larger shipments with reduced SLAs• High volume increase and fluctuations; Potential acquisition of generics companies & products
• Development and licensing of innovative products (cold chain, hospital products, home delivery)• Acquisitions of small specialized companies (i.e. Encysive)• More specialty products (biotherapeutics, human vaccines, special devices)• Focus on service quality (special processes & channels)
• Development or licensing of innovative products (cold chain, special devices, hospital products)• Acquisitions of small specialized companies• More specialty products (biotherapeutics, special devices); Focus on service quality (special processes & channels): “deliver the right drug at the right time for each patient”
• High growth (especially for inline and local products); specific and changing regulatory environments & customer requirements; Roll-out Market Logistics model (i.e.BRIC, Turkey / CEER / AFME) Supply reliability and safety, strong focus on network infrastructure, service quality; lead time; In-licensing of local brands or products for developing markets (global access)
Our Path Forward
Animal Health• High volume of cost sensitive cold chain products (vaccines); increase (especially for inline and local products); New product development and acquisition (i.e. SP EU); New Channel models;Strong growth, channels and value propositions; specific PAH network required;
DELIVERY CHAIN MANAGEMENT
• Delivery chain
design & planning
• Product
• Market
• Network
PLAN
Supplier integration & coordination
ALIGN
To-the-Market supply and
delivery management
In-the-Market supply and
delivery management
*----------EXECUTE------------*
Delivery chain performance management
VALIDATE
Business Process &
Data Management
COMMUNICATE
HOLISTIC PROCESS INTEGRATIONHOLISTIC PROCESS INTEGRATION
•Differentiate between management of supply structures (plants, contract manufacturers and suppliers) and the operational process to deliver their output.
•Manage the delivery process holistically, recognizing the interdependence of major elements: strategy & policy, planning, network design, operational execution, finance, performance management, compliance and information / process management.
Wyeth is now a part of Pfizer Inc. The merger of local Wyeth and Pfizer entities may be pending in various jurisdictions and is subject to
completion of various local legal and regulatory obligations.
NETWORK DESIGN ELEMENTS
• Differentiate between management of supply structures and the operational process to deliver their output.
• Holistic management of the delivery process, recognizing the interdependence of major elements: strategy & policy, planning, network design, operational execution, finance, performance management, compliance and information / process management.
• Strong focus for accountability and results (supply assurance, asset management, aggressive cost management, compliance, talent management, etc.).
• Align with commercial and PGM operations and strategies.
• Capture & build upon Wyeth best practices, talent and business support processes.
• Ensure implementation of an integrated Information Technology systems strategy and platform integrating SAP and other systems across delivery chain constituents.
Wyeth is now a part of Pfizer Inc. The merger of local Wyeth and Pfizer entities may be pending in various jurisdictions and is subject to
completion of various local legal and regulatory obligations.
VALUE PROPOSITION
PERFORMANCE, VELOCITY, SECURITY, COMPLIANCE
Delivery Chain Performance Management: Process, Talent, Asset, Execution
Delivery Chain Services & Operations
GlobalStrategic Trade
ManagementCompliance
Strategy & PolicyFormulation
• Holistic Delivery Chain Management
• Enable Initiatives (Commercial, PGM, etc.)
• Process Development & Harmonization
• Integration of Stakeholders
• Supply Assurance
• Organization & Talent Management
• Trade Management Policy Contribution
• Accountability & Results
Wyeth is now a part of Pfizer Inc. The merger of local Wyeth and Pfizer entities may be pending in various jurisdictions and is subject to
completion of various local legal and regulatory obligations.
Today’s Discussion
• Global Delivery Chain
• Global Logistics & Supply Evolution
• Market Logistics Network Model
• What’s next
• Q&A
Evolution of Global Logistics and Supply
2000 2003 2006 2008 20092001
•Integration US/ Canada Logistics and Supply Points into PGM
European Distributio
n Study
Establishment of European Market Logistics20 Markets
Integration of Supply Chain and Global LogisticsExpansion of ML to Emerging Markets (Russia and Turkey)
Expansion to ASIA-PACRemaining LAAnd AfME
Integration of Mexico and Brazil
Warner Lambert
Pharmacia
Wyeth
Pfizer Logistics Network
Global Logistics
Distributor
Transition
No Affiliate
Logistics Center
Global Logistics Provides Secure And Reliable Delivery Of Products
Int’lplants/CMs
Supplypointmovement
Inboundfreight
Plants/CMs
Warehouse
Outboundfreight
Clinics/patients
Inboundfreight
Customsimport/export
3PL
Int’l
Wholesaler
Retailers
Sales rep
Compliance
Work to speed time through customs
Use internal knowledge to optimize product movement
Work to optimize time, eg, in-transit quarantine
Manage 3PLs and freight systems
Manage PFE warehouses
Design and optimize deployment routes
Develop and implement conveyance security strategy
Develop and ensure conformity with policies
Respond to internal/external trends & optimize value (tax) through supply chain/logistics design
Product security
Strategic alignment with Pfizer businesses
Strategic Guidelines
• Leverage Pfizer volume– Combine operations for the businesses– Negotiate better rates
• Pursue opportunities for regional distribution– Establish regional hubs / integrated operations with LC’s
• Outsource for flexibility– Rationalize logistics services provider base– Standardize towards activity based contracts
• Improve costs – Capture synergy opportunities (Pharmacia)– Improve operational efficiency and effectiveness
• Enhance Customer Service– Establish Service Level Agreements ( country / business )– Ensure Alignment with Trade Policies
Outsourcing Strategies • Stabilization Phase (2003 - 2005)
• Strategic Objectives• Stabilize business • Capture immediate opportunities• Harmonize agreements
• Activity Based Costing where appropriate• Pfizer T& C respected
• Activities• Extend current relationships if they help meet strategic objectives• Engage in local RFP process as necessary
• Harmonization Phase (2006 – 2009)• Strategic Objectives
• Distribution Operations Outsourced• Move towards regional Logistics Service Providers (LSP’s)• Capture additional operational and process efficiencies
• Activities• Engage in regional/pan European RFP process• Optimize distribution network based on new business / trade strategies• Leverage global provider relationships
Realigning Markets for the Network of the Future
North Europe
South Europe
Mid Europe
Nordics / CEER / Benelux North Europe / Nordics
South Europe
Mid Europe / CEER
2006 2009
Regional Consolidated Market Non-Consolidated Market
Change Management… Q & A
• Global Logistics does not know my market!… know logistics and its common, essential elements… normally transfer local staff and upgrade as possible… do not work in isolation
• If we transfer responsibility we will lose the ability to control our customer relations and sales.
… it’s a partnership not a separation… trade policy, developed by the market, determines objectives
• The conditions in my market are different / unique.… it’s a partnership not a separation
… operational aspects of distribution (fulfillment, transport, compliance, returns, claims) are essentially the same
• Why jeopardize sales to effect a comparatively small savings.… sales are not in jeopardy; changes, if they occur, are carefully planned and executed
… often, you are paying too much for services and managing performance selectively
… local focus on logistics part-time with no professional support and guidance
Questions and Concerns
• We have been working with our distribution agent for many years. They know us and we have a very good relationship.
… understand and we evaluate possibilities for continued relationships under different terms
… in many cases (particularly % of sale agreements) they are overcharging for services
… it is precisely because of this that the nature of the relationship and services provided needs to be reviewed
• We just negotiated a new contract so we cannot change in the near term.
… existing contracts are reviewed and consequential actions are taken within the possibilities that exist at the time
• There are only a few logistics providers in our market and we have already secured the best.
… perhaps, however, professional management elevates the services and the cost / performance ratio of even the best providers
… look to leverage global advantage in alliances
Wyeth is now a part of Pfizer Inc. The merger of local Wyeth and Pfizer entities may be pending in various jurisdictions and is subject to
completion of various local legal and regulatory obligations.
Today’s Discussion
• Global Delivery Chain
• Global Logistics & Supply Evolution
• Market Logistics Network Model
• What’s next
• Q&A
Overview of Methodology• Phase I - Internal Planning
– Guidelines and tools
• Phase II – Stakeholders Awareness and Buy In– Communication and alignment
• Phase III – Understanding the Market– Building a knowledge database (data, strategies, issues…)
• Phase IV - Assess, design, change, enhance…– Analyzing, prioritizing and proposing solutions
• Phase V – Financial aspects– Financial impact prior and post integration
• Phase VI – Detailed Planning– Develop implementation Plan
• Phase VII – Implementation– Monitor progress, mitigate delays and measure results
Detailed Planning
Financialaspects
People
Processes
Infrastructure
Understandingof market
Awareness & buy-in
Implementation
InternalPlanning
Key DriversOrganizational Design
• Aspects to consider when deciding where to locate and how to staff and organize the team
– Market Size – Number of Markets / Market reach / Geography
• Location of markets and accessibility / Travel time & frequency– Commercial Distribution Model
• In-house, outsourced or distributor model– Scope
• Management of WPO, Consumer, Nutritionals, AH, Mktg Aids and DP (others?)– Skills & competencies, Experience and potential of Market Logistics and Local Team
• High performing vs. low performing team• Experienced or new colleagues (ML and local team)• Process robustness
– Strategic vs. Operational Focus– Mature vs. Emerging Market
• Activity fluctuations and multiple initiatives– Distribution Network
• Single vs. Multiple LSP’s / LSP effectiveness and Service Performance– Culture and Language
Scope: identify a potential external supplier for warehousing and/or distribution of pharmaceutical products
Areas to be assessed:: Warehouse operationsTransportationSOXBusiness Continuity Planning)QualityComputer System ValidationAsset ProtectionEHS (facility, environmental)Fire Protection
Overview LSP Due Diligence Assessments
1. Initial meeting with each potential suppliercontent: discuss content & timing of assessments, explain Pfizer quality agreement and general expectations (IT, security, logistics, etc)
2. Carry out one overall assessment at each supplier’s main depotcontent: check if supplier would generally meet Pfizer expectations (quality, logistics, security); if outcome is negative, no further assessments required
3. If outcome is positive: carry out due diligence assessments at each depot (and at head quarter, if appropriate).
4. Generate & communicate assessment reports and discuss outcome/gaps -
5. If a supplier is chosen, assessment results & action plan need to be included in the contract
Overview LSP Due Diligence Assessments
Success Factors• Be prepared to present a compelling case for change• Prepare “Global” tools and solutions• Anticipate potential concerns specific to each market and prepare
to offer effective answers and solutions • Focus on the people and organization aspects as much as on the
operational aspects• Understand baseline for budget and budget assumptions• Don’t underestimate resistance, include change management in the
plan…• Commit to deliver some quick wins: Identify and solve 1-2 key
problems that are important for the business early in the process• Consistent and continuous measurement and communication of
results is critical• Effective partner selection
GL&S Expertise
• Innovative Distribution Models– Direct to Pharmacy/Direct to Patients– Pre-Wholesale & Distributor
• Defining & Optimizing Supply Networks– Network structures– Transportation network design
• Service Performance & Metrics/KPIs– Service Level Agreements (SLAs)– Benchmark service, costs, quality
• Compliance & Validation– Site Audits & Assessments
• Outsourcing & Procurement– Negotiations/Activity based
costing models– Harmonized contract guidelines
• Innovation & Technology Team– Site remediation & optimization – New technologies & best practices
• Continuous Improvement (Right First Time)
• Good Distribution Practices & Good Manufacturing Practices (GDP, GMP)
Wyeth is now a part of Pfizer Inc. The merger of local Wyeth and Pfizer entities may be pending in various jurisdictions and is subject to
completion of various local legal and regulatory obligations.
Today’s Discussion
• Global Delivery Chain
• Global Logistics & Supply Evolution
• Market Logistics Network Model
• What’s next
• Q&A
Strategic Drivers
A. Effectively manage a more diverse and fragmented stakeholder landscape
B. Proactively support the business (BU’s) revenue growth strategies
C. Present “One Voice” to stakeholders and fully leverage our value both internal (PGM) and external (business)
D. Drive development of holistic Delivery Chain processes and a well coordinated long-term organization and network strategy
E. Ensure the seamless integration of suppliers and products into the GL&S delivery chain network
F. Enable coordination, information flow and knowledge transfer
Wyeth is now a part of Pfizer Inc. The merger of local Wyeth and Pfizer entities may be pending in various jurisdictions and is subject to
completion of various local legal and regulatory obligations.
Working together for a healthier world