Ensuring Supply Chain Performance and Agility During a Period of Integration and Change

Transcription

1 Ensuring Supply Chain Performance and Agility During a Period of Integration and Change Martin McLoughlin Director, Supply Planning & Systems Merck October 19, 2011 Philadelphia, PA

2 Today s Presentation Review how we approached clinical supply chain integration Discuss the factors that impacted this strategy Provide feedback on solutions we leveraged to sustain performance during change 2

3 Getting Started with Integration Listen and Learn Sessions: Understand the current state Define the Future Future Scope Future Organizational Leadership Draft the Integration Strategy Integration Leadership & Teams Governance Structure Engage others for feedback and alignment Global Clinical Supply Organization Supply Chain Partners Develop and Execute Integration Plans Driven by the Teams Managed through Integration Governance 3

4 Outcome: Listen & Learn Sessions Supply Chain Organization Decentralized Centralized Customer Service Approach Flexibility Reliability Planning Model Systems Driven or Forum Driven Culture Transactional, Lean, Efficient Collaborative Evolving Technology Areas of Strength Areas of Strength Governance Operational Strategic Performance (On-time delivery to Patient) >95% >95% 4

5 Set a Path for the Future Supply Chain Organization Selected Decentralized Opportunity End to End Focus Customer Service Approach Planning Model Flexibility Systems Driven Balance with reliability & cost Leverage Forums Culture Transactional, Lean, Efficient Collaborative Technology Areas of Strength Leverage Strengths Governance Operational Strategic View Performance (On-time delivery to Patient) >95% >99% 5

6 Communicate the Vision and Intent Planning Manufacturing Packaging Distribution Right Supplies, Right Time, Every Time for Our Patients Strategic Intent We will be trusted Partners with our Patients, Customers and Suppliers We will operate as a compliant, agile, predictable, reliable, and cost effective clinical supply chain 6

7 Establish End to End Supply Chain Governance Clinical Supply Chain Council Serves as the strategic decision-making body for the clinical supply chain Align Strategies and Funding across Supply Chain Own Supply Chain Processes and Metrics Oversee Supply Chain Performance Serve as link to broader R&D Governance Membership Clinical Operations Product Development Planning Manufacturing Packaging & Labeling Distribution Quality Finance Procurement 7

8 Establish End to End Supply Chain Governance Clinical Supply Operating Committee Serves as the operating governance body for the clinical supply chain Oversee the execution of the Supply Chain Strategy Monitor and address Supply Chain Performance Resolve risks to the clinical supply chain Identify and drive business process changes Membership Planning Manufacturing Packaging & Labeling Distribution Quality 8

9 Cross-Functional Partners Establish Issue Escalation Pathway Clinical Supply Chain Council Clinical Supply Operating Committee Issue Escalation Governance Issue Resolution Meetings CSIR Guarantee Teams can address issues rapidly & effectively 9

10 Integration Strategy Stage 1: Operate Separate Supply Chains (2010) Merck Clinical Demand Planning Mfg. Packaging Release Distribution Schering Clinical Demand Planning Mfg. Packaging Release Distribution Separate Supply Chains Planning & Scheduling Operations Outsourcing Contracts Quality Systems Integration Deliverables Define supply chain network Define integrated processes, roles, documents, business rules, and training 10

11 Integration Strategy Stage 2: Dual, Aligned Clinical Supply Chains (2011) Integrated Clinical Supply Chain with Common Business Processes Clinical Demand Planning Mfg. Mfg. Packaging Packaging Release Release Distribution Distribution Integrated Governance Structure Planning & Scheduling Aligned Interface with Manufacturing Packaging network Ongoing Activities Quality system integration Distribution network integration 11

12 Integration Strategy Stage 3: Single Integrated Clinical Supply Chain (2013) Integrated Clinical Supply Chain with Common Quality Standards Clinical Demand Planning Manufacturing Packaging Release Distribution Integrated planning, execution and inventory systems Harmonized quality standards Integrated distribution network 12

13 The Road through Integration Establish new processes Feed future demand into the new processes Addresses challenges through escalation and governance Measure and optimize performance 13

14 Integrated Demand & Supply Planning Goal: Accurate and stable demand signal Clinical Supply Program Teams Partner to align the Clinical Development and Product Development Plans Optimize the Demand Signal Leverage Clinical Supply Packaging Agreement Captures protocol demand and supply plan timings Aligns protocol level demand and supply plans Helps to optimizes flexibility, reliability and cost Shared accountability for the delivery of supplies Team versus Function Collaborative versus Transactional 14

15 Integrated Master Planning Goal: Optimized forecasting, scheduling and performance Bulk Material Manufactured material, commercial material, comparators, placebos Installed Bulk Master Planning Function Capture and aggregate demand signal Simplified the interface with manufacturing supply chain Harmonized manufacturing siting process Harmonized comparator sourcing and forecasting process Harmonized commercial forecasting process Harmonized scheduling for quality release Ongoing Activities Harmonized comparator manipulation processes Harmonized common placebo formulary Harmonized primary packaging formulary and planning processes Optimized business rules Harmonized metrics and scorecard 15

16 Integrated Master Planning Goal: Optimized forecasting, scheduling and performance Packaged Product Strategy is to continue current process which leverages ERP Use of ERP increased the complexity of integration Integrate new item masters into ERP application Transfer inventory into ERP system Develop new supply routes, work centers and timings Roll out of ERP to European Packaging site Harmonized finished good demand capture Harmonized forecasting for internal and outsourced packaging Many ongoing Stage 2 activities for

17 Change Happens 17

18 Impact of Competing Integration Activities on Clinical Supply Chain Clinical Dev & Regulatory Affairs Clinical Supply Chain Quality Product Development Distribution Manufacturing Packaging Site changes Process changes Systems changes Role changes New business goals Needs Hybrid supply chain Hybrid processes Accelerated supply New business support 18

19 Packaging & Labeling Network Changes Situation: Decision made to consolidate packaging to one US and one European Packaging site in advance of process integration. Impact: Close one Schering site and one Merck site. Packaging batches need to be transferred to alternate sites without impact to delivery date. Solution: Supported near term work in existing facility Identified jobs to outsource using existing processes Identified remaining jobs that needed to be supported internally Developed process to support packaging across business processes & systems Schering jobs in Merck plant (US), and Merck jobs in Schering Plant (Europe) Developed new routings and timings Developed hybrid release processes Identified impacted SOPs and implemented temporary change processes Clinical Demand Planning Mfg. Packaging Release Distribution 19

20 Distribution Network Changes Situation: Decision made to close US warehouse & distribution center Impact: Transfer inventory and processes to new locations. Raw materials, Bulk, Components, Finished Goods, Ancillary Supplies, Retains Receiving, Sampling, Distribution, Shipping, Transit routes and Vendors Solution: Supported near term work in existing facility Transfer finished goods distribution Impact on IVRS, orders, cold chain processes Focus: Manage patient supply during transition Transfer bulk and components Impact on item master migration to new ERP system Reroute open orders for bulk, finished goods, components to new site Enable new centers with necessary processes and technology Broad communication across suppliers involving many business units (those that order) Clinical Demand Planning Mfg. Packaging Release Distribution 20

21 Clinical Development & Regulatory Affairs Process Changes Situation: Integration within GCDRA has changed their organization and processes Demand now leverage processes across two legacy companies Impact: How we capture demand and agree on supply plan How we approve label text How we release bulk and finished goods against regulatory filings Solution: Partnered with GCDRA to understand their changes Developed tool to assess all work in process Defined new processes and supply chain routings Developed business protocol to capture supply chain processes for each study Leveraged Demand Project Manager to execute business protocol Leveraged Master Planning to manage New process flows New work centers and timings 21

22 Accelerated Supply Chain Situation: Strategic decisions to accelerate development timings and further leverage outsourcing partners to expand capabilities and capacity. Impact: New outsourcing partners, Technical &Quality Agreements, supply chain routes New roles and processes impacting planning and execution Solution: Accelerate Supply Chain Initiative Accelerated Supply Chain Route* API XX weeks Formulation XX weeks Bulk XX weeks Pack & Release XX days Total Cycle Time: XX weeks 22

23 Support for Emerging Markets Supply chain needs for Emerging Markets vary by the market strategy being developed Our core principles focus on collaboration, flexibility, support We will tailor the extent of engagement to the business need Train Merck Employees on Clinical Supply Processes Oversee Preparation of Supplies at Vendor Prepare Supplies Centrally Consult to assure Safe Legal Sensible Level of support 23

24 Customer Feedback: Role of the Regional Leads North America Montreal, Canada EEMEA London, UK EU II Nice, France Latin America San Diego, CA, USA EU I Milan, Italy Asia Pacific Shanghai, China A Key Resource for Supply Chain Performance Partner with Regional Clinical Leadership Address supply issues and changes in regulations Support new technology and process implementation 24

25 In Closing Integrating, whether processes, organizations, or companies brings challenges for maintaining operational performance during change Set the vision and path for integration Something is always changing and we are all impacted in some way Establish and leverage strong business partnerships Transformation is identified and delivered by the people who come to work everyday to consistently deliver performance No one comes to work to do a bad job Integration efficiency and performance are enabled by having aligned strategic plans and support mechanisms Governance is key 2 25

26 Acknowledgements Rob Pizzie Lorna Briddick Ajay Gupta Meinrad Kopp Joe Firenze Merck Team Thank You QUESTIONS? COMMENTS? 26