Logistic Provider Qualification: prerequisites and SLA

Transcription

1 Logistic Provider Qualification: prerequisites and SLA

2 Summary of the Content Benchmarking comparable providers and services to cope with product and market requirements Pre-qualification Activities Operational Process Contract Management: what to have in place Risk Management for Distribution 2

3 Benchmarking comparable providers and services to cope with product and market requirements

4 The type of logistics partners depends on the company s distribution strategy. Distribution Strategy - Decision Tree Details of activity Activity Stakeholders Supply Chain QA Technical Group (validation) Market Access Commercial Finance Procurement Define the strategy to distribute products in international markets Provide Stakeholders with a Distribution plan/ strategy from Plant - DC and DC to customer Define the to-be scenarios for detailed modeling Assess the primary and secondary packaging components design Distribution Strategy Select a distributor No Company Distribution Yes Collect the key detail for the product (volumes, pallet size, packaging, stability data..) Define the shipping modes and bracket the strategy Identify primary distribution solutions and logistics partners Provide primary packaging/shipping costs for overall Distribution cost analysis Understand the commercial strategy aligning with Commercial organization Assess the commercial channels - Overview of product groups and parameters ( volume, value ) - Demand by customers (split by product groups) - Service levels towards different types of customers (e.g. lead time, fill rate) by product groups/customers Map the distribution network Design/redesign secondary distribution solutions Prepare implementation and training plan Home Delivery - Nursing Reimbursement & Health Policy Insights Field Reimbursement & Access Specialists Patient Access Services Primary Distribution In market Storage & Distribution Patient Experience Select a wholesaler Identify local partner No No Strategy, partners and systems qualification Company Distribution Strategy, partners and systems qualification Company Responsibility Identify suitable partner Strategy, partners and systems qualification Yes Strategy, partners and systems qualification Yes Strategy, partners and systems qualification Strategy, partners and systems qualification Support model implementation Support Tender Support Tender Support model implementation Support Tender Support Tender Support model implementation 4

5 Research Methodology Model Definition and User Requirements Cause analysis Scenario Analysis Risk Response Phase 1: Define user requirements based on product characteristics and commercial strategy Draft the desired distribution model Develop evaluation tools based on defined criteria Draft an implementation plan based on commercial strategy timelines Phase 2: Selection of the logistic partner Pre screening Short list Tender Evaluation of the best fit Focus on the model and proposed logistic solution Develop clauses and reference KPIs for contract negotiation Phase 3: Hypothesis on risk occurrence Audit and verification of quality compliance Verify and re-test the proposed systems and shipping solutions Define controls and KPIs for vendor measurement and management Confirm implementation plan based on findings and priorities Phase 4: Implement recommended actions to mitigate risks Remodeling/Reshaping Looking for improvements tailored on product and company requirements e.g. Additional stability studies for distribution Back up systems and dual source for subcontractors Additional training and support for end users based on customer s surveys 5

6 Prequalification Activities Scouting CDA Third Party Assessment Tool Pre-audit Pre-qualification Activities

7 Pre-qualification Activities The analysis requires the collection of massive data. Know your product Know your shipping lanes Know your customer Know the regulations Product Lanes Customer requirements Special constraints linked to the shipping solutions handling ü Temperature range ü Shipping temperature allowance - Stability data ü Volumes and packaging configurations ü Dimensions and weights of each packaging level (carton, box, pallet) ü Routes and stop over points ü How long and under what conditions ü The trouble nodes ü Direct shipment vs. hub transfers ü Special permits and authorizations ü Handling requirements ü Local laws and regulations ü Logistic infrastructure. Types of transport required ü Cold storage at hubs access ü Adequate/appropriate equipment Pre-shipment Planning Risk Volumes assessments and packaging - Contingency plans Procedures / SOPs / Process flows configurations Equipment qualification Dimensions Handling and weights of each packaging level (carton, box, pallet) In-transit loading/unloading The trouble nodes Transit nodes Handling processes Communication processes Post-shipment Roles and responsibilities Transfer and Storage of the goods Inventory management Issues management 7

8 Potential Logistics Partners Capabilities High Level Assessment Primary Distribution Secondary Distribution Patient Support Hub Patient Reimbursement Manufacturing Site Customs Customs Market Hub Pharmacy Access Support Airports Hospital Patient Deduction Clinic Other Home delivery Nursing Collection Case Management Partner A Partner C Partner D Direct Capabilities Indirect trough partners 8

9 Alternatives High Level Comparison OPTIONS PROVIDER #1 PROVIDER #2 PROVIDER #3 Cross-docking from depot (assembled solution) Transport Average Lead Times Cost of Re-Icing Shipment by depot to the new partner's hub (assembled solution) Transport Average Lead Times Cost of Re-Icing Shipment from site to destination Withdrawal Trasport Average Lead Times Storage and Distribution (alternative depot) Storage Capabilities Trasport Average Lead Times 9

10 Operational Process

11 Evaluation tools -Examples Fino al 2010 Evaluation list Expected Service Coverage Map your chain: do not forget transfer points Transport and Storage Temperature requirements Types of transport required: Adequate equipment Validation status of fleet/containers for active and passive cooling Non-validated fleet: Will the vendor work with you to validate? Quality System and Procedures Total load release vs. partial Shipments How long and under what conditions Direct shipment vs. hub transfers Adequate understanding of hub operations Trained handlers at hubs Service and maintenance also alarms Response network deviations, lost shipments, recalls Emergency and Security plans WH Transport Other Activities Specialty Services Goods-in Storage (for both drug and devices) Inventory management Pick & Pack Cold chain transportation Inbound transportation Outbound transportation Track and trace Express delivery Kitting Stickering Repackaging Postponement Order cycle management Real time reports on stock and sales Customized administrative services Market entry support Technical Questionnaire % on final score 80% Y/N TYPE QUESTION WHEIGHT Vendor 1 Vendor 2 Vendor 3 Does the company have an own fleet of temperature controlled vehicles? Yes / No 10 NO NO YES Do you consider your fleet of temperature controlled vehicles compliant with the current GDP EU guidelines? Yes/No 30 YES YES YES Does the company have a quality certificate (e.g. ISO 9001)? Yes / No 10 YES NO NO When you outsource transportation, does your company have a quality agreement in place with the different carriers? Yes / No 10 YES YES YES Does your staff (including the drivers) receive a GDP or equivalent pharmaceutical training? Yes/No 10 YES YES YES When you outsource transportation, does your company have an audit plan in place with the different carriers? Yes / No 10 YES YES YES Number of vans (< 17m3) / Number of trucks (17m3 < x < 50m3) / Number of trailers (> 50m3) 50 NA NA NA 20% Y/N Does the K coefficient of the insulated equipment in use by your company fit the requirements? 25 YES NA YES Does the company use its own temperature controlled vehicles? (vs subcontracted) 25 YES YES YES TOTAL

12 Vendor Rating Tools Criteria Parameters Weighted Score (Example) Criteria Weight Quality TBD Logistics Capabilities & Strategy TBD Service Flexibility TBD IT, Technology & Reporting TBD Price TBD Total 100 Parameters Quality Delivery Attainment Service Flexibility Logistics Capabilities & Strategy IT, Technology & Reporting General Evaluation (tender/inclusion/reevaluation) Aderence to company quality requirements (tender questionnaire) Solid quality systems and vendor management approach Acceptance of proposed KPIs and Penalties Multiple transport solutions and alternatives to the standard model Extra services such as order management capabilities, extended and regulated subcontracting network, etc. The supplier has demonstrate to have a strategy in its approach to deliver the best business solution to the company with the flexibility and capabilities to extend its regional and service scope (locations; routes; transport flexibility, etc.) The supplier has to have solid and leading edge IT systems, infrastructure and capabilities with the ability to integrate with company systems. The supplier must be able to meet or exceed reporting requirements. Performance Monitoring Total number of lots with nonconformities / Total lots Number of ontime deliveries from vendor / total number of deliveries by vendor. Evaluation of the variety of services, advice and assistance provided by each vendor. Proactivity/Self driven initiatives CRITERIA VENDOR 1 WEIGHT SCORE WEIGHTED max 35 Quality ACCEPTABLE LOTS 9 0,9 31,5 TOTAL LOTS 10 max 20 Flexibility ONTIME 10 1,0 20 TOTAL 10 max 15 Service SATISFIED 8 0,8 12 TOTAL 10 max 30 Price LOWEST 12,5 1,0 30 VENDOR x 12,5 VENDOR RATE 63,5 Price Vendor X / Lowest quoted price per activity of all vendors Define the criteria to be selected and customized based on vendor type and objectives Assign weights which reflect the importance for the business. Define the elements against which the vendor will be evaluated such as adherence to technical specifications, reliability, accuracy, flexibility, reactive approach to change management, proactivity, etc. Quality Service Flexibility Logistics Capabilities & Strategy IT, Technology & Reporting Vendor Vendor Vendor TOTAL WEIGHT

13 3PL Weighting Tables 3PL Global Capabilities & Strategy Transportation Management Quality & Compliance Personnel & Training Supplier Relationship Management IT, Technology & Reporting Security Implementation & Contract Management CATEGORY Show Stopper Deal Enhancer Lack of Pharma Storage License Lack of Cold Chain capabilities Center of Excellence Customer Interfacing Technology Order Management 13

14 Contract Management: what to have in place

15 Examples of low control CASE Inadequate Contract Contract Giver fails to adequately assess the competence of the Contract Acceptor Not sufficient Information exchanged between the parties EFFECT There is the risk that both parties will be unclear as to the expectations, requirements and standards to be applied during the provision of the service. This lack of understanding could result in adverse impact on product or failures in supply Contract will be awarded to an unsuitable contractor resulting in service deficiencies and quality issues Contract will not be able to ensure that providers act in accordance to the Contract Giver s needs Incorrect handling of product that could lead to temperature deviations/product damage Customer dissatisfaction (e.g.: confusion regarding lead times) Length of recovery/replacement, cost &financial impact to the company Loss of market share/loss of supply position RISK 15

16 What to have in place CONTRACT GIVER CONTRACT ACCEPTOR Selection of a contractor based on proven capabilities and costs Pre Auditing to ensure that minimum requirements are met Detailing the activities that must be undertaken in the Contract (including KPIs) Monitoring and periodic assessments Build regular and effective communications with the Contract Acceptor including key information on the product handling requirements Ensure that contract is written, reviewed, approved and readily accessible to relevant staff Joint review to ensure that both parties are satisfied with the information provided Identify any challenge prior to accept the work Define sub-contractors management (e.g. service levels, audits occurrence) Being mindful of limitations in knowledge and if in doubt, ask the Contract Giver 16

17 Behind the Guidelines Guidelines outlines what companies have to ensure to correctly manage outsourced activities but doesn t detail all the aspects that need to be covered and the actions to be completed. Guidelines only give definitions and principles that companies are required to follow. If from a point of view, this situation gives to companies the opportunity to better adapt the guidelines principles to their own specific scenarios, on the other side, the risk of misinterpretation is high. Selection of the right contractors for each activity Ensure product quality is not adversely affected through the supply chain Mitigate Risks associated with outsourced activities Ensure that both he parties perform activities in the right way Ensure that both he parties are aware of information, are able to perform the service and can take appropriate actions in case of unexpected disruption Consistent management system with on-going controls in place To limit this risk, it is important to develop a strategy for vendors management adapted to internal quality requirements and based on the company s business models. 17

18 Agreements Examples of what to include Agreements with Transport/Warehousing / Distribution Partners. Requirements from GDP regulations Types of systems/solutions and additional pharma services to support distribution compliance Sub-contracting rules Supply Chain Integrity (theft, tampering, counterfeit) R&R and Training of personnel, i.e. - level of responsibility for the different roles/partners involved in the supply chain activities to be in place (shipment, receipt, storage, pick & pack, distribution, shipping) - and for personnel/entities entrusted with pure transportation and similar tasks (drivers, handling and custom agents, etc.) Authorization status of third parties for outsourced activities - Licenses, certifications, standards, etc. Service Levels (KPIs) Review cycles for the agreements in place 18

19 Risk Management for Distribution

20 Risk Management for Distribution Understanding of how supply chains work and how suppliers are managed is required to provide organizations with a basis from which to implement a structured Risk Management process. Performing a risk assessment, in conjunction with relevant stakeholders is a practical way to understand what level of oversight is needed for each provided service. Implement tools which helps identifying the criticality of the services where the like-hood and the impact of the inefficiency of the service are weighed together to provide the rank of the overall risk. Define the right level of control to : avoid an excessive control, resulting in a major effort and in non justified costs avoid a low control and therefore high risk of quality issues IMPACT Medium Risk Low Risk Low Risk High Risk Medium Risk Low Risk LIKEHOOD High Risk High Risk Medium Risk According to the results of the assessment, contract giver can define for instance the frequency of the audits (lower for low risk services and higher for high risk services) or understand the necessity of mitigation plans when the risk could seriously affect quality An effective Risk Management process will protect the continuity of product supply and ensure that end-users receive products that are fit for purpose 20

21 Thank you 21