Richard Farquharson, Head of Supply Chain & Planning EMEA at AstraZeneca spoke at the SCL Event 2013

1. Making the pharma supply chain “SEXY”
RICHARD FARQUHARSON
AstraZeneca Pharmaceuticals
Head of Supply Chain & Planning for EMEA

2. Lead times are long, inventory turnover low
(Up to 400 days)
ASEPTIC UK RoW
Japan Italy EU
Japan CH
Italy Argentina Argentina
2

3. ? Reasonably
predictable demand
for ~10 years
?
~ 12 years

4. Stock outs affect patient’s lives and are
therefore unacceptable

5. Regulatory
Authority +
Payer
REGULATOR
Patient DR Pharmacist Patient
PRESCRIBER DISPENSER CONSUMER
DECISION MAKERS

6. So what has all this meant historically ?
• Complete aversion to stock outs
• Lots of inventory
• Poor demand management & supply planning
• Little agility, complex and highly regulated
• Yet high gross margins
• Limited perceived commercial “value” in what Operations
has to offer

7. But things are rapidly changing...
Increasing pressure on prices
Even greater regulation
Volatile emerging markets

8. SEXY
SOTC
Distribution Innovative
channels Supply packaging
Reduction in cost Chain Top line sales
security
POS data
Responsive
supply
chain
Reduced S&OP
working
Range capital
management Excellent
Manage
stock
risk
availability
Dull

9. Supply chain security is a challenge

11. SEXY
Accompanying Market
diagnostics & access
services ?
Speed to
Brand value proposition
CoGs market
SOTC
Distribution
Supply Innovative
channels
packaging
Reduction in cost Chain Top line sales
security
POS data
Responsive
supply
chain
Reduced S&OP
working
Range capital
management Excellent
Manage
stock
risk
availability
Dull

12. SEXY
Accompanying Market
diagnostics & access
services ?
Catalyse
Speed to
Lead
CoGs SOTC
& market
Partner
Distribution
channels Supply Innovative
packaging
Reduction in cost Chain Top line sales
security
POS data
Responsive
supply
chain
S&OP
Range
management
Reduced
working
capital
Just Do It Manage
Excellent
stock
risk
availability
Dull

13. Why do we need to engage commercial ?
 Marketing provides customer insight
 Operations ensures product availability and manages risk
....both are essential to deliver effective & efficient, future supply chains
 The 4Ps are not the sole property of marketing

14. How to engage Commercial?
 Partners not customers
 Get into the Commercial Business
 Take ownership of the whole supply chain: Right-to-Left thinking
 Bring innovative ideas and challenge the status quo

15. What are your experiences of engaging
the commercial function