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With 2020 revenue of £34.1 billion pharmaceutical company GlaxoSmithKline (GSK) has a complex global supply chain that must function smoothly not only to protect company revenues and profits but also to save lives.
“Patients are at the end of our supply chains,” said Ashish Gupta, GSK’s VP of Specialty Pharma Supply Chain and Strategy during a recent Fireside Chat, hosted by Resilinc. “Every vial we produce and distribute could save a life.”
To research, develop, produce, and distribute its pharmaceuticals, vaccines, and consumer healthcare products, the firm has “a massive global footprint, sourcing ingredients and commodities from all over the world,” said Gupta. (According to GSK’s 2020 annual report, the company works directly with 36,000 suppliers.)
Like all pharma companies, GSK must ensure that suppliers meet the company’s quality standards, and that they also pass muster with healthcare regulators such as the US FDA. Building resiliency in this context often means “having backup sites properly approved by all the regulators, not just [the US FDA] but those from multiple countries that have different requirements for transparency and data sharing,” said Gupta.
From reactive issue management to proactive strategy
GSK’s approach to supply chain risk management has evolved substantially over the last several years, inspired and enabled by Resilinc. Said Gupta: “When we first met you guys [Resilinc] three or four years ago … my initial take was [to use Resilinc] to be on top of day-to-day risks in our global supply chain and have some capabilities to gain early mover advantages,” in response to disruptive events, Gupta said.
“Since then, our thinking has evolved … and we’re now using our [supply chain] risk management as a lever in our strategy,” said Gupta. “That has become a key driver for us—how risk management and resilience can lead into strategy.”
During the fireside chat, Gupta mentioned he has personally visited the legendarily efficient factories of Toyota and explained that viewing supply chains through a risk lens has led him and his colleagues to plan for the unexpected. “Rather than just always trying to LEAN everything, we also map out the plausible scenarios and see what can happen and what’s the art of trying to manage that,” he said.
Early on in this journey, a strong partnership with his counterpart in procurement was a critical asset. So was an early pilot test of proactive SCRM. “We were launching new [specialty] medicines, so we were bringing on high-risk suppliers [and creating] complex supply chains,” said Gupta. “We did a proof of concept with one supply chain, and we had a quick success, and then we started replicating [that approach] elsewhere.”
Another big insight arose as the company mapped its supply chain down through the tiers. “As I start peeling the onion … by the time I get to the source or the root cause of a problem it might be a little supplier somewhere in Japan that [is vital] to all our suppliers. And probably that’s our weakest link.”
This deeper supply chain intel has enabled the company to collaborate with suppliers to improve their resilience, and it has informed “make-or-buy” decisions on whether to invest in new manufacturing capacity or increase procurement when manufacturing new products, according to Gupta.
Navigating COVID-19
According to GSK’s 2020 annual report, the company maintained supply continuity and service levels despite the impact of COVID-19, throughout the year. The report also credits a “digital value stream map” for enabling “end-to-end visibility of our supply chain” which lets users track brands and sites and drives “faster decision making.”
Like its big pharma counterparts, GSK is heavily investing in R&D on COVID-19 vaccines. With partners, it has several vaccines in late-stage trials and is investigating next generation vaccines “which could address multiple variants in a single vaccine,” according to company statements. In May 2021, GSK received FDA Emergency Use Authorization for Sotrovimab (VIR-7831), a single-dose monoclonal antibody developed with Vir Biotechnology to treat COVID-19 in high-risk patients.
Clinical breakthroughs put more pressure on supply chains
Gupta expressed great admiration for the pace at which vaccines and new treatments are being developed. “We’ve seen this awesome innovation, especially with mRNA-based vaccines,” he said. “What would typically take five years has been done in 11 months.”
But he also highlighted the mounting pressure on pharmaceutical supply chain managers to keep pace with clinical developments. “This has taken out a lot of the cushion we used to have in supply chains,” he said.
Meanwhile, the supply chain constraints that surfaced during the pandemic “aren’t going away,” according to Gupta. “While the pandemic appears to be slowing down and—fingers crossed—we’ll see the next round of vaccines taking care of mutations, these supply chain constraints will remain. These are systemic cracks in the global supply chain.”
Single-use systems: biopharma’s “microchip issue”
A growing challenge for pharmaceutical companies developing biologics is the sourcing of what are known as “single-use systems”—disposable, pre-sterilized manufacturing equipment that is increasingly used in place of stainless steel for pre-commercial and even commercial biopharmaceutical manufacturing.
“Single-use systems for biologics are the microchip issue for pharma right now,” said Gupta. “There are just very few providers,” and regulatory requirements make switching providers difficult and time consuming. “You have to do validation trials and make sure the regulators [approve a new provider]. It takes multiple months or more than a year to get that approval.”
Ultimately, however, Gupta considers the pandemic an “enabler” for supply chain resilience. The global disruption has encouraged large companies to “go from reactive to proactive, from issue-based management to data-driven mythologies, from bouncing between suppliers to collaborating with suppliers.”
Gupta believes his group at GSK is in year two or three of its journey to robust supply chain resilience. “There’s a lot more to do,” he said, adding that he views Resilinc as a critical partner in this journey. “We really like the benefits we’re getting from EventWatch but obviously we want to go beyond that and start using the full offering.”
Listen to the full Fireside Chat with GlaxoSmithKline’s Ashish Gupta: The ‘New Normal’ for the Pharmaceutical Supply Chain
