CMO Serialization Programs Ensuring Cost-effective ... · • T&T Regulatory Database • CMO Serialization Program • CMO IT Connectivity ... • T&T Pilot Line Project • T&T

Evren Ozkaya, Ph.D.www.supplychainwizard.com © 20151

CONFIDENTIAL – any use of this material without written permission of Supply Chain Wizard, LLC is strictly prohibited

Evren Ozkaya, Ph.D.Founder and CEO,

Supply Chain Wizard, LLC

Ensuring Cost-effective Supplier Compliance

CMO Serialization Programs

Nov 4, 2015Denmark


Evren Ozkaya, Ph.D.

Sandoz Inc. (a Novartis Company)Director of Global Track & Trace ProgramDirector of Strategic Planning

McKinsey & CompanySenior Management Consultant

Intel CorporationSupply Chain Modeling Engineer

Georgia Institute of TechnologyPh.D. in Supply Chain and LogisticsM.S. in Industrial Engineering

Bilkent UniversityB.S. in Industrial Engineering

Introduction

Supply Chain Wizard, LLCFounder and CEO

Other experience:Education:

Logistics consulting

Manufacturing

Sales & Marketing

IT & Purchasing

2

Consulting Services:

Serialization (Track & Trace)1. Program Setup & Strategic Planning2. Project Management & Execution3. ROI & Sustainability

Supply Chain Strategy & Optimization1. Supply Chain Strategy Design2. End-to-end Process Optimization3. Process automation & analytics


Introduction: Supply Chain Wizard Core expertise in Pharma Serialization (Track & Trace), Supply Chain & PMO

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• Former Global Serialization Leads• Projects in US, EU and Asia• End-to-end program execution• Line level integration & validation

• Former Pharma SC executives• End-to-end SC projects in Pharma• High impact projects in Mfg-Retail

collaboration and reverse logistics

• Global & regional PMO expertise• Led PMO office for multiple Pharma

serialization projects globally• Designed & deployed strategy & PMO

tools for Serialization projects

Serialization (Track & Trace)

Pharma Supply Chain Management

Strategic Planning & Program Management

1 2 3


SCW is serving world’s leading organizations

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• T&T Strategic Plan

• Supply Chain Org. Design

• CMO Serialization Strategy

• T&T Regulatory Database

• CMO Serialization Program

• CMO IT Connectivity

• T&T IT Vendor Selection

• T&T Lot Level Traceability

• T&T Pilot Line Project

• T&T India Project

• HDMA New Product Form

Select Clients & Projects – covering strategy, execution & full implementation

• T&T Roll-out • T&T Dashboard

• Sales & Operations Planning Process Design

• T&T Packaging Efficiency

• T&T European Hub for Serialization &

Aggregation

Our consultants and/or experts supported Serialization Projects for:• 3 of the top 5 US Generic Companies• 4 of the top 10 Global Pharma Companies

Top 5 US Generic Mfg.

Top 3 GlobalGeneric Mfg.

Top 3 TurkishPharma 3PL


SCW tools & services support end-to-end project life cycle of Pharmaceutical Serialization (Track & Trace) Programs

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Strategy Execution

Regulations Database

• Active/Final/Draft legislations• Regulatory requirements• Technical requirements

1

Serialization Survey Tool

• Serialization readiness• Program stage by legislation• Serialization challenges

2

Serialization Wizard Tool

• Strategy workshops• Instant T&T Program design• Budget & roll-out planning

3

Serialization Mgt. Dashboard

• CMO/Site risk assessment• Client business value at risk• Risk monitoring & reporting

CMO Serialization Portal

• Interactive CMO portal• CMO/Client req’t exchange• CMO progress benchmarks

4

5

Serialization Program Mgt.

• CMO/Site T&T Strategy • PMO & Execution• CMO/Site guidance

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Pharmaceutical Serialization (Track & Trace) Programs

Seri

aliz

atio

n E

xper

tise In

du

stry Experien

ce


Agenda

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Track & Trace: CMO/Supplier Serialization


End-to-end view on T&T Risk Management:Selected core initiatives to protect down-side & capture up-side/opt’y

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Internal /Site Network

External Network

Protect down-side Risk Capture up-side Opt’y

• Internal T&T Program

• Process/Data standards

• Customer T&T Req’s

• Contract Pkg. / VAS

• Inter-co. SC visibility

• Data driven SC insights

• External T&T Program

• Cost Containment

• IT Connectivity

• External SC visibility

• Supplier Collaboration

• E2E SC Optimization

1

2

3

4Up-sideDown-side Business Value


How to structure CMO Serialization Support Program

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Objectives

Baseline / Risk Assessment

Strategy / Resources / Vendor Selection

Budget & Financial Plan

Client side CMO side

• Ensure CMO compliance• Minimize value at risk

• Achieve compliance• Fulfill Client requirements

• CMO network baseline• CMO compliance risk

• IT, SC, Commercial Baseline• Regulatory / Client gaps

• CMO Support Strategy• CMO Taskforce Team• Consulting partner

• Serialization Strategy• Implementation Team• HW / SW / Consulting

• Cost of CMO Support• Unit cost increase• Capex investments

• Cost of compliance• Unit-cost negotiations• Capex negotiations


CMO Compliance typically falls under Supply Chain workstream and has a high impact on the business

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DecisionsBaselineObjectives1 2 3

Serialization Program – Strategic Planning Phase

• Ensure compliance for all CMOs & CPOs

• Minimize support/help• Minimize value at risk

• # of CMOs• # of CMO sites• # of CMO lines

• CMO network design• Make vs. Buy• CMO funding strategy• CMO monitoring & support

CMO / CPO

DC / Logistics

Cust. Service

• Minimize disruption • # of Distribution Centers• # of headcount• X packs/day throughput

• IT solution vendor• Hardware solution vendor• Key process changes

• Protect service levels • X% pack fill rate / service • Data exchange / EDI• Pilot customer selection

Supply Chain

Planning• Minimize supply shortage • Inventory levels

• Back-order levels• Transition plan• Pilot SKU selection

Impact

H

H

M

L



Assessing risk of CMO non-compliance & business impact requires a careful analysis & consideration of multiple factors

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Risk Dimension

CMO

Serialization

Risk

Score

Likelihood

of CMO non-

compliance

Business

impact

of CMO non-

compliance

Time

Categories of Risk

Scope

Resources

A

B

C

Financial

Strategic

D

E

x%

x%

x%

y%

y%

100%

100%

Risk Assessment Methodology Risk Assessment Output


CMO Support Strategy should build on insights received from own CMO network and requires a custom approach

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Risk Heatmap by Market

Challenge 1

Challenge 2

Challenge 3

Challenge 4

Challenge 5

Challenge 6

Challenge 7

Challenge 8

Top CMO Challenges

CMO Program Stage by Market CMO Revenue at Risk

Sample outputs - Disguised


Serialization Management Dashboard provides full visibility & risk assessment on CMO/Site Serialization Compliance

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Risk Heatmap by Market

CMO Risk Assessment Matrix CMO Revenue at Risk

Sample outputs - Disguised

CMO Network Scenario Planning

Add’l Benefits:

• CMO Communication management

• CMO Action Tracker• Risk profile by CMO• CMO Benchmarks• CMO level user access• Report exports PDF• Data exports XLS• Data input screens• Admin modules



Possible CMO Support Resource Plan & Budget Framework that could be leveraged to estimate full program budget

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CMO Segment # CMOs TotalRevenues

Client Resources Needed[CMO Task Force]

CMO SupportCost Estimates[OpEx/CapEx]

Strategic x $M # FTEs $

High Risk

Med Risk

Low Risk

.

.

.

.

.

.

.

.

.

.

.

.

Non-Strategic x $M # FTEs $

High Risk

Med Risk

Low Risk

.

.

.

.

.

.

.

.

.

.

.

.

Total – xxx $M # FTEs Program Budget $


5 Types of Risk Responses

Avoid

WITHOUT a CMO Program WITH a CMO ProgramWhat it means for CMO Serialization

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Benefits of a Global CMO Serialization Support program include avoiding, transferring, reducing & planning for risks

Reduce

Transfer

Contingency

Accept

• Avoid surprises w/ CMO non-compliance• Avoid critical issues surfacing too late

• Transfer risk between CMOs• Transfer/in-source products

• Reduce likelihood of non-compliance• Reduce impact of non-compliance• Reduce scope by prioritizing CMOs

• Accept calculated risks• Accept possible business down-side• Accept when mitigation cost is too high

• Plan contingencies for failures• Plan for redundant capacities• Plan for business continuity

Mitigation Levers

Value at

Risk

Identify

Measure

Plan

Mitigate

Report

CMO Program



Example of how CMO Program could add value: AVOID


Avoid

What it means for CMO Serialization

Reduce

Transfer

Contingency

Accept






Value at

Risk

Situation:

• A CMO realized it is too late for US Market compliance• Assessing high costs, CMO decides to pull out of the

market, impacting Client’s business in US

CMO Program Actions:

• Continuously monitor compliance readiness by market• Predict high risk CMOs by market situation & deadlines• Propose strategies to avoid surprises (e.g., tech transfer)

CMO Program Benefits:

• Eliminate the loss of revenue and market share• Proactive & strategic planning of risks

Case #1: CMO pulling out of Market




Avoid


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Example of how CMO Program could add value: TRANSFER

Reduce

Transfer

Contingency

Accept






Value at

Risk

Situation:

• A new product will be launched via one of 2 CMOs• Possibly to be sold in multiple markets soon• One of the CMOs is behind their compliance efforts


• Highlight the risk profiles of CMO candidates by market• Factor in the compliance issues of CMOs in key markets• Recommend best candidate CMOs for product launches


• Minimize the risk impact of new product launch• Transfer the risk from high risk to low risk CMOs• Contain cost increases in new markets due to compliance

Case #2: New Product Launch at CMO




Avoid


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Example of how CMO Program could add value: REDUCE

Reduce

Transfer

Contingency

Accept






Value at

Risk

Situation:

• A CMO is asking for a significant unit-price increase• Justification is the increase in Serialization investment


• Identify possible cost increase requests early• Evaluate the validity of request via bottom-up analysis• Identify alternative solutions before it is too late• Estimate realistic justifiable unit cost increase


• Reduce the impact of full cost increase • Have options available for negotiations (not otherwise

possible in the last minute)

Case #3: CMO Unit-cost Increase



Example of how CMO Program could add value: ACCEPT


Avoid


Reduce

Transfer

Contingency

Accept






Value at

Risk

Situation:

• A CMO is asking Client to invest in serialization equipment• Otherwise, CMO is warning that Client products may not

be compliant on time


• Assess the risk profile of the CMO• Understand mitigation scenarios & related costs• Find investment cost is too high vs. value at risk• Accept the risk & do not invest


• Consciously avoid unjustified investment • Accept “possible” down-side risk, which is lower than

“absolute” cost of investment

Case #4: CMO requesting investment




Avoid


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Example of how CMO Program could add value: PLAN

Reduce

Transfer

Contingency

Accept






Value at

Risk

Situation:

• Multiple CMO’s are delayed with their IT integration• Serial number exchanges & validation cannot be on time


• Identify 3rd Party Service Providers & reserve capacity• Route non-compliant products through these 3PL or CPOs• Ensure contingent systems are validated in advance


• Avoid potential business disruption• Provide additional time to CMO partners until compliance

Case #5: Delayed CMO integration



Serialization Wizard tool could be used to kick-start CMO Track & Trace Programs fast & effectively using best practices

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For more info, please visit: www.serializationwizard.com

“I wish Serialization Wizard existed when I first started to work on global serialization program. It's ability to organize a multitude of cost factors for a number of locations would have simplified my data collection and analysis tremendously. Serialization Wizard also encourages the program manager to think about and include one time and recurring costs that might otherwise be overlooked andexcluded from the program plans.”

- Former Head of Global Serialization Program, Global Pharma and Device Company


http://www.serializationwizard.com/


On the CMO side, there are 8 key areas of decisions that can make CMO T&T program a success

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Communication

Right People

Strategic Planning

Vendor Selection

1

2

4

5

CMO T&T Success

During T&T Program

Before T&T Program

After T&T Program

Cost containment7

SC Collaboration8

Standardization6

Benchmarks3

Right strategic decisions

Communicate with your customers proactively

Select an experienced PM/team to lead the program

Leverage industry learnings & benchmarks

Invest time to do an up-front strategic planning

Utilize a structured approach to select best vendor

Use a pilot project to standardize almost everything

Understand & plan for OEE losses, operational costs

Join collaboration & ROI initiatives w/ customers

Result: Stay as a long term strategic trading partner & capture more market share



While on the flip side, wrong decisions or practices can lead to a CMO T&T program failure

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Communication

Right People

Strategic Planning

Vendor Selection

1

2

4

5

CMO T&T Failure

During T&T Program

Before T&T Program

After T&T Program

Cost containment7

SC Collaboration8

Standardization6

Benchmarks3

Wrong “strategic” decisions

Ignore your customers’ surveys & communications

Assign project to someone as a “stretch assignment”

Use irrelevant industry benchmarks (i.e. rumors)

Jump right into execution, skipping strategic plans

Select the vendors that your customers are using

Skip the pilot and a standard implementation guide

Do not plan or budget for the operational costs

See your company as a “supplier” instead of “partner”

Result: Be eliminated from your partner networks & lose market share

After T&T Program



Invite your CMOs to 2nd CMO Serialization Roundtable



?Evren Ozkaya, [email protected]+1-404-457-2950

Questions, comments:

THANK YOU

mailto:[email protected]

Documents

CMO Serialization Programs Ensuring Cost-effective ... · • T&T Regulatory Database • CMO Serialization Program • CMO IT Connectivity ... • T&T Pilot Line Project • T&T