SUPPLY CHAIN
MAPPING
A BEST PRACTICE
FOR THE BIOPHARMA
INDUSTRY?
CONNECT
COLLABORATE
ACCELERATE TM
SUPPLY CHAIN MAPPING
©BioPhorum Operations Group Ltd
Contributors
This document was developed through a collaboration under the auspices
of Supply Partner Phorum. The contributing members were:
Amgen
Rod MacLea
Pall Life Sciences
Sven Adams
Bayer U.S. LLC
Matt Muldoon
Pfizer Inc.
Jim Shea Jr.
Bristol-Myers Squibb
Luis Oka
Marin Henley
Sanofi
Jeffrey Rosen
GE Healthcare
Hanna Edstrom-Valsinger
Janssen
Frederik De Vos
MilliporeSigma
Joe Lacman
Claire Kazanjian
Sartorius
Dean Adams
VWR, part of Avantor
Brian Diehl
BioPhorum
Matthew Neal
Nordson Medical
Ken Davies
Supply Chain Mapping 2
About BioPhorum
The 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.
©BioPhorum Operations Group Ltd
SUPPLY CHAIN MAPPING
Contents
1
Executive summary..............................................................................................................................................................................................5
2
Introduction...........................................................................................................................................................................................................6
3
What is the problem?...........................................................................................................................................................................................6
4Biopharmaceutical drivers for drug manufacturers and supply partners............................................................................................7
5
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
Other factors..........................................................................................................................................................................................................9
6What could the biopharmaceutical industry do differently? ............................................................................................................... 10
7Supply partner questionnaire – template .................................................................................................................................................. 10
8Supply chain mapping – potential implementation model.................................................................................................................... 12
9Supply chain mapping – maturity model..................................................................................................................................................... 13
10Supply chain mapping – performance management system................................................................................................................. 15
11Conclusion............................................................................................................................................................................................................ 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
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©BioPhorum Operations Group Ltd
1.0
Executive summary
In 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:
SUPPLY CHAIN MAPPING
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,
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©BioPhorum Operations Group Ltd
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
Introduction
The 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
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©BioPhorum Operations Group Ltd
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.
ource: Langer, Eric (2016, December). 2017 Biopharmaceutical Trends —
S
Opportunities For The New Year. Bioprocess Online. Retrieved from
https://www.bioprocessonline.com/doc/biopharmaceutical-trends-opportunities-forthe-new-year-0001
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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)
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5.0
Other factors
There 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 supplierqualification 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.
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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.
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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 industrywide 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
upply partner questionnaire –
S
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.
*based on 10 raw materials and suppliers used in Product A and each supplier listing
three sub-suppliers per raw material.
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 template
One 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 A
Tier 1 suppliers
Tier 2 suppliers
Tier 3 suppliers
10*
10x3=30
30x3=90
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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.
Repository
The 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.
Figure 1: Example of a Raw Material Supply Chain Map
Manufacturer
BioPharma
Mfg
BioPharma
Suppler
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.
Distributor
Manufacturer
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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.
SUPPLY CHAIN MAPPING
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’
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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
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.
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
upply chain mapping –
S
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).
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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.
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 )
SCM: fully integrated SCM
into business processes
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.
Discrete monitoring of
SC events for mapped
materials.
Monitoring: implemented
multi tier monitoring
including analysis and
regular reviews
Risk assessment: output of
SCM/Monitoring integrated
into your risk assessment
process BCM
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)
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 buyin 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
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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 10.0Supply 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.
SUPPLY CHAIN MAPPING
11.0 11.0Conclusion
This 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.
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SUPPLY CHAIN MAPPING
12.0 12.0 Recommendation
It 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.
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13.0
Appendices
Appendix A: Glossary
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:
•u
nderstanding continuity and preparedness needs, as well as the need for establishing a
BCM policy and objectives
• i mplementing and operating controls and measures for managing an organization’s overall
continuity risks
•m
onitoring 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.
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Acronym/abbreviation
Definition
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.
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Acronym/abbreviation
Definition
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.
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Acronym/abbreviation
Definition
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.
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Acronym/abbreviation
Definition
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
Items#: 123456
Item description: Item 1
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
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
Tier 2
Items#: 123456
Item description: Item 1
Supplier name: Supplier 1
Distr. / Mfg: Mfg.
Supplier address (primary site): Street 1
Country: USA
Alternative site address: N/A
Separate warehouse address: Street 2
Tier 3
Items#: 123456
Item description: Item 1
Supplier name: 123456
Distr. / Mfg: Mfg.
Supplier address (primary site): Street 1
Country: Sweden
Alternative site address: N/A
Separate warehouse address: Street 2
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Appendix C: Process map – Possible implementation model
Supply Chain Mapping: A potential implementation model - version 2@ Sept 2017
Revise process
Risk
• Evaluation
• Quantification
• Mitigation
• Resiliency
Compliance
Supply chain
Maturity
Determine
mapping scope
Priority
• Supplier
• Material
• Product
Extent
• GMP
• Critical
• All
• Tier
• Revenue
Define criteria/
attributes desired
for mapping
Supplier
• Sites
• Location/
address
• Process type
• Alternative
sites
• Recovery time
• Solvency*
Pilot process
Tool selection
Assess business
need, priority &
impact
Continuous improvement
Defined subset
• Supplier
• Product/BOM
• Material
category
Communicate
• Internally
• Externally
Training
Materials
• Source
• Sources source
• Redundancy
• Tier
• Revenue
Execute
controlled pilot
Logistics
• Transportation
lanes
Evaluate
mapping process
Continue
mapping process
Data set
• Data extraction
• Quality of
source data
Expand level of
mapping process
• Suppliers
• Materials
• Tiers
• Products
Supplier response
• Data
completeness
• Quality of
responses
• Data usefulness
• Suppler’s
comfort in
sharing
Process
scalability/
repeatability
Utilize
mapping
process
results
Evaluate results
Refresh interval
Training
*May require
3rd party input
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 )
SCM: fully integrated SCM
into business processes
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.
Discrete monitoring of
SC events for mapped
materials.
Monitoring: implemented
multi tier monitoring
including analysis and
regular reviews
Risk assessment: output of
SCM/Monitoring integrated
into your risk assessment
process BCM
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)
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Appendix E: Performance management system
Performance management system: "Brain Storm" outputs
Level 1
Level 2
Level 3
Level 4
Level 5
Basic SC Info.
Systematic
Monitor
Risk assessment
Fully embedded
Supply chain information
available
% of tier 1 mapped
Supplier response time to
alerts & events
% of tier 2 mapped
% of products mapped
ID - alternative sites
Country of origin
Identification of all critical
materials/components
(or X %)
% mapped at:
Tier 1
Tier 2
Tier 3
Etc etc...
Basic filing data
Measurable delivery
performance
Reliability
Non conformance data
Patient safety
Regulatory
Security of supply
Financial data
Reputational
Number of tiers mapped
Threshold/target stretch
Critical items mapped
For prog. mangt: supplier - tier
1 - adherence
SC questions % answered
SC questions - response time
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
Mature supply chain
mapping & change
management system(s)
% of suppliers shared
% shared by:
Tiers
Region
Category of material
Logistic links
Analysis of critical “nodes”
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
Supply Chain Mapping 23
©BioPhorum Operations Group Ltd
SUPPLY CHAIN MAPPING
Permission to use
The 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”
Disclaimer
This 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 24