How do you manage risk in your supply chain?

newsNov 30, 2020 | News | Phorum : Supply Partner

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The biopharmaceutical supply chain is global and complex, and disruptions can quickly have an impact – you only have to look at COVID-19 to see the importance of maintaining surety of supply.

So, it is critical that manufacturers, tier 1 suppliers and their sub-tier suppliers understand the risks in their supply base and deploy effective and consistent risk management systems to reduce their exposure to problems. Unfortunately, a range of barriers can make this difficult, such as the perception of risk, budget constraints and company culture.

However, help is at hand because BioPhorum has published the Risk management in the biologic industry supply chain: a best practice guide.

This clearly shows how the benefits of a mature risk management approach allows a company to react to unforeseen disruptions, such as natural disasters, cyber-attacks and shortages of key raw materials.

“As a key supplier to drug manufacturers, we have a responsibility and obligation to be transparent with our risks and take appropriate business continuity measures to ensure the security of supply for our customers,” said Andrew Goldman, Head of Business Continuity & Supply Chain Risk Management at Merck.

“The risk management paper published by BioPhorum is a great step towards achieving this objective,” added Goldman. “It provides specific guidelines and best practices so we can focus our time and resources appropriately to meet the needs of our customers. We will use these guidelines to optimize our efforts and communications with our valued customers.”

The guide

The BioPhorum guide suggests that companies implement the framework contained in ISO 31000:2018 Risk Management as it provides an effective and efficient way to support the uninterrupted supply of therapeutic drugs to patients – while satisfying the demands of regulatory agencies and legislative requirements.

Written by the Risk and Business Continuity Management Workstream, the guide does not mandate the adoption of ISO 31000 but has tailored it for the specific nuances of the biologics industry. It encourages companies to review their approach to risk management and validate, refine and improve their existing practices.

The guide provides structured guidance on the elements of risk management and explains how these can be consistently applied by any company, across the industry and all the way down the supply chain. The aim is that all companies will be able to recognize the same terms, definitions and processes.

It allows manufacturers to score their suppliers’ risk management systems and contains a maturity model so they can assess their own relative maturity of risk.

Benefits

Being able to reduce your exposure to risk demonstrates to your suppliers, regulators, patients and customers that you have sound systems in place to ensure a better surety of supply. The guide shows how a more resilient, flexible and efficient supply chain can help you recover from inevitable disruptions, large and small.

Undertaking effective risk management means you need to interrogate your business. This will give you a better understanding of the totality of your end-to-end operations and your supply chain map – knowing your risk areas allows you to mitigate your risk exposure.

COVID-19

There are many examples of major disruptions to the supply chain, e.g. the Asian earthquake and tsunami in 2012. However, the COVID-19 pandemic has brought to the fore the importance of risk and business continuity management in the biologics industry.

The pandemic has shown how important it is for manufacturers to understand their supply chain – from the source of raw materials, through the various tiers of suppliers and onto the final destination of their manufacturing plants.

The impact of COVID-19 in transportation and distribution, for example, has been significant and companies have increasingly realized that they must have mitigating actions for their business operations, rather than just relying on an insurance policy to offset the financial impact of an incident.

“While the life science industry has made tremendous strides in business continuity management over the past decade,” added Goldman, “COVID-19 has highlighted the need for business continuity plans to be bolstered among drug manufactures and their suppliers.”

Future focus

The BioPhorum risk management guide is only the first part of the puzzle. The next step will be to look at business continuity and use ISO 22301:2019 Security and resilience – Business continuity management systems – Requirements and ISO 22313:2020

Security and resilience – Business continuity management systems – Guidance on the use of ISO 22301 in a similar way, i.e. tailor them to the needs of the biologics industry.

More than 20 companies, a mixture of manufacturers and suppliers, have put forward subject matter experts to be involved and the first virtual meeting was held in June 2020 with the intention of publishing a guide in 2021.

Everyone involved in the biologics supply chain are encouraged to use this guide to review, validate, challenge and improve their supply chain practice: whether in drug manufacturing, in the wider supply chain and across functions from sourcing, procurement, quality, distribution and logistics. Risk management has always been critical but has not always been applied consistently across the industry. With COVID-19 on everyone’s agenda, what better time to use the BioPhorum guide to review your own risk management practices?

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