A Road map for Digital Transformation of Bio-Pharmaceutical Supply Chain.

1. Digital Transformation of
Bio-pharmaceutical Supply Chain
Presenter: Neeraj Shah-
Director Investigational Material Supply Chain Excellence
Celgene Corporation
Supply Chain Operations & Compliance in Pharma
Conference 25-27 July 2017, Philadelphia

2. Agenda
• Why is digital transformation of pharmaceutical supply chain critical?
• Define Transformation
• Why Transformations fail?
• A Road map for Digital Transformation of Bio-Pharmaceutical Supply Chain
• Critical success factors

3. Why is transformation of pharmaceutical supply chain is so critical?
Supply Chain is
resource and cost
intensive,
inflexible and
unresponsive to
dynamic shifts in
demand
Rising Level of
Regulatory
Scrutiny &
Warning
Letters Citing
Data Integrity
Wave of
Mergers and
Acquisitions
Complex
Network of
Contract
Service
Providers
Competitive
Pressure on
Price and
Emphasis on
Outcomes
Pressure on
Reducing Cost
of Operation.
Currently
Supply Chain
Cost is 25%
11.8% CAG in
from 2014-2022
for
Personalized
Medicine
Complex
Product
Portfolio
(Combination of
Small Molecule,
Biologics and Gene
or Tissue based
Therapies
Low Process
Capability &
High Cost of
Quality
Research by Pharma Asia
CAG: 11.8 Compound
Annual Growth as per
Grand View Research

4. Transformation
Impacts
processes, procedures
and culture
Changes beliefs
and core values
High risk
of failure
Process of
profound and
radical change Transformation
“It is not the strongest of the species that
survives, nor the most intelligent that
survives. It is the one that is most
adaptable to change”
Charles Darwin

5. Why Transformations Fail?
5January 7, 2018
Planning a transformation without establishing a sense of urgency
Lack of a resilient coalition of stakeholders who strongly believe that there
is a need for transformational change
Not having a clear vision and a roadmap/ strategy to achieve the vision.
The vision is not communicated well or there is lack of buy-in
Stakeholders are not empowered to act on vision
Short term wins are not planned as part of transformation initiative

6. A Roadmap for Digital Transformation of Bio-
Pharmaceutical Supply Chain

7. Digital transformation of supply chain-A Roadmap
1.Senior leadership
establishes a “Sense of
Urgency”
2. Form a “Coalition of
influential change
leaders”
3.Establish “Vision for
Transformation”
6.Identify supply chain
capabilities and
transformation enablers
5. Communicate the
Vision
4. Identify and engage
Change Champions
7.Develop an Execution
Roadmap/Strategy for
transformation
8.Prepare Business Case
9. Begin Execution

8. Step 1: Establish a sense of urgency
Strengths
Robust pipeline of innovative therapies
Strategic collaboration with research
companies & institutions
Blockbuster drugs in the product mix
Market Share
Weakness
Weakness
Lack of a digital strategy to support
supply chain capabilities
Disparate IT systems leading to
inconsistent and redundant data
Slow and un-informed decision making
Inflexible and unresponsive supply chain
Opportunities
Growth in demand in current markets
Expansion of marketing regions
Rise in aging population
Threats
Competitive pressure impacting revenue
Evolving regulations and increasing
regulatory scrutiny
Dependency on one or two commercial
products for revenue
SWOT
• Senior leadership engage with the
Supply Chain Functional Heads to
establish a sense of urgency
• Conducting a SWOT Analysis
would help the leadership in
identifying, opportunities,
Weaknesses and Threats faced by
the organization
• Establish the sense of urgency
An Example:
“If we are unable to build a
differentiating supply chain to
support the business growth drivers
we may not be able meet the financial
goals in the future and might be
forced to divest.”

9. Step 2: Form a coalition of change leaders
The senior leadership identifies a core team of influential change
leaders who firmly believe in the urgency of transformation
The change leaders must be aligned on the following:
 WHY a transformation is urgent/critical at this time?
 WHO will get impacted/benefited by the transformation?
 WHAT will success look like?
 When does the change need to happen?
 Where will the change specifically take place?
 The value proposition

10. Step 3: Establish the Vision for transformation
• Vision should establish the purpose of transformation and what will the success look like
• Articulate the value proposition
• On-board stakeholders and get their buy-in
• Consistently motivate stakeholders to stay engaged in the entire process
• Steps for developing a vision
• Invite a small group of change leaders to a brainstorming session to develop the vision
• Review the organization strategy
• Visualize the future state of business for the next 3- 5 years based on organization strategy and industry direction
• Leverage the outcome of SWOT Analysis to prepare the value proposition
• Brainstorm the value proposition
Vision Statement (Illustration)
Transform our “Supply Chain” into a data-driven, flexible, scalable and agile supply chain to support growth,
optimize costs and mitigate risks by integrating and automating our processes and systems, leveraging
collaboration tools, big data, analytics and cloud computing.

11. Step 4: Identify and engage change champions
• Conduct an initial stakeholder analysis
• Identify change champions. resisters
and stakeholders indifferent to change
• Form a team of change champions
• Share the vision and gain buy-in
• Engage change champions in delivering
the message to stakeholders who are
indifferent or resister
• Empower the change champions
Change Champions – Those who
see change as an opportunity. Risk
is acceptable to them and willing
to be part of leading the change.
Indifferent –Not sure how they
feel about the change or may not
be fully aware of it. They may want
to wait and watch.
Resisters-Those who fight against
change because they are always
weary and threatened by a
change.

12. Step 5: Communicate the vision
1. Think about your audience.
1. What do they care about the
most?
2. How do they feel about the current
situation in the organization?
3. How might they challenge or resist
the proposed change?
2. Target the message to their
needs.
1. How is the vision relevant to
them?
2. What is the one thing that you
want everyone to walk away
knowing?
Prepare to Communicate Communicating the Vision
 Clearly articulate why change is
urgent/critical?
 Describe what success will look
like , so everyone envisions the
same goal
 Engage their emotions by
expressing how each one will
be benefited by the
transformation
 Layout action steps- Convert
vision into action by planning
next steps
Change
leaders
Change
Champions
Stakeholders

13. Step 6: Supply Chain Capabilities and Transformation Enablers
Supply Chain Capability Transformation
Core supply chain capabilities that must undergo transformation to
achieve a cross-functionally integrated, data-driven, scalable and optimized clinical supply chain.
Core Supply Chain Capabilities
Supply Chain Transformation Enablers
Business Process
Automation
Compliance &
Risk
Management
Big Data &
Analytics, Cloud
Computing,
Mobility,
Manufacturing
Talent
Development
IT Systems
Integration
(Internal &
external)
Forecasting
and Demand
Planning
Procurement
Strategic
Sourcing &
Vendor
Management
Order
Fulfillment
Customer
Service

14. Step 6: Enablers for Digital Supply Chain Transformation
Promote cross-functional process visibility
Minimize process variation by leveraging business rules
Enhance transparency in the extended supply chain
Maximize electronic workflows to drive business process
Integrate IT systems to minimize data redundancy and improve
flow of information
SCEM – Real Time Supply Chain Event Management
Leverage Business Intelligence, Analytics and Decision
Dashboards
IOT-Internet of Things (Wireless sensors to capture environment
and location based data
Objective metrics
Develop Strategic and Innovative Thinking
Aligned team with shared goals
Develop aptitude and skills for using advanced technology
Build cross-functional collaboration & communication skills
Develop a Compliance Strategy that integrates with all supply
chain processes
Establish a compliance oversight council
Evaluate Implement technology & work flows to manage
compliance
Conduct periodic audits of processes and compliance with SOP
Supply Chain Transformation enablers
IT Systems Integration
SCEM, Big Data, Analytics, Cloud ,
Mobility, & IOT
Regulatory Compliance & Risk
Management
Organization Re-structure &
Talent Pool Development
Business Processes
Automation

15. Step 7: Develop the transformation execution roadmap/strategy
 Brainstorm supply chain risks
 Conduct impact analysis of risks
 Prioritize risks
Conduct a Risk
Assessment
 Identify cross functional business processes and value streams for which risks were identified
 Agree upon work streams for analysis
 Establish the scope and process boundaries
Define the Scope
 Conduct workshops op map out the current process
 Identify gaps in the current process
Diagnose the
Current State
• Prepare the future state value stream map
• Prepare future state process and data flows
• List out assumptions
• List out dependencies
•
Visualize &
Prepare Future
State

16. Step 7: Develop the transformation execution roadmap/strategy
• Compare future and current state and confirm gaps
• Prioritize gaps to be addressed over the next 1-5 years
• Identify initiatives needed to address the capability gaps
Conduct Gap
Analysis
 List the initiatives with appropriate priority
 Evaluate priorities and assign weights to each initiative based on risk and benefits to business
 Identify short term initiatives that may be needed to address the risks
List out Initiatives
to address Gaps
• Prepare roadmap for implementing short term and long term initiatives
• Share roadmap with cross functional teams
• Ensure alignment and buy-in from all impacted stakeholders and cross functional teams
Prepare Roadmap
for Execution
• Present roadmap to steering/governance committee
• Publish roadmap
• Begin implementation of initiatives as per the roadmap rolled out
Approve Execution
Roadmap

17. Strategic Risk Categories (Evaluating supply chain risks)
Critical Risk
Low Risk
High Impact
High probability of
Occurrence
High Risk
High Impact
Low Occurrence
Impact of Risk 
Probability
Low Impact
High Prob. Of
Occurrence
Medium Risk
Critical Risk – These are top priority
risks requires close attention.
High Risk –Needs contingency plan to
address because the impact is high if
they occur.
Medium Risk / Low Impact – These
risks will not have much impact, but
need to be actively monitored to
reduce their likelihood.
Low Risk – These does not require
immediate attention.
HighLow
HighLow
Low Impact
Low Probability of
Occurrence

18. Step 7: Illustrative Roadmap for digital transformation of supply chain
18
Low Hanging Fruit Business
Critical
Future Vision
2017
2018
2020
2019
True Demand Planning &
Forecasting using POS
Data
Improve CMO
Quality Control
e-Labeling
Automated Prediction of
Drug Safety
Master Data
Governance
BEYOND
Partner Information
Exchange & Integration
Operational
Analytics &
Insights –Ph I
Supplier e-Portal
End to end
Visibility into CMO
operations
Operational
Analytics &
Insights –Ph II

19. Step 8: Prepare a Business Case
• A business case is a formal document
whose purpose is to provide the
information necessary to make an
informed decision about whether to
proceed with the investment.
• It quantifies the investments and the
expected financial benefits from the
program/ project and forecasts a 5 year
Return on Investment.
• It is used to gain approval from the cross
functional leadership to begin the
execution.
Section 1
Strategic
Context
Section 2
Analysis and
Recommenda
tion
Business Needs and Desired
Outcome
• Problem statement/Opportunity
Strategic fit
• Business need (Risk to business
if investment is not made)
• Scope
Options Analysis
• List possible options
• Evaluation criteria
• Cost Benefit Analysis
Justification and
Recommendation
• List possible options
• Evaluation criteria
• Cost Benefit Analysis
• Recommended option

20. Step 9: Execution of Digital Transformation Roadmap
• Execution is the means to accomplish your vision
• A change can be planned and the best roadmaps/strategies be prepared,
however, without execution nothing will ever change
• Start executing projects considered as the low hanging fruit
The first rule of any technology used in a
business is that automation applied to an
efficient operation will magnify the efficiency.
The second is that automation applied to an
inefficient operation will magnify the
inefficiency.
Bill Gates

21. Critical Success Factors
Leadership Alignment: Ensure alignment with corporate goals and gain strong leadership support
One Vision : Influence stakeholders at all levels and ensure they all have one vision
Managing Stakeholders : Identify stakeholders who have a development and learning mindset, empower
them and consistently motivate them
Focus on Capability/Process: Supply chain capability transformation should guide the digital
transformation
Transformation Execution Roadmap: Develop a roadmap that is aligned with corporate goals, realistic and
achievable and ensure buy-in from resource managers
Execution : Plan, Execute and Monitor : The roadmap or strategy alone will not lead you to success.

22. Are you ready to lead a transformation?
Neeraj Shah- Director Investigational Material Supply Chain Excellence
Celgene
Mobile: + 1 617 8991407
email- neerajshah.asn@gmail.com