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"Aligning Strategies, Operations, Metrics, and Practices"
An Interview With Joe Shedlawski, CPIM, Principal, Commercial Operations, Wyeth Consumer Healthcare |
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Presented By:  |
Joseph F. Shedlawski brings a unique perspective to the presentations at Biotech Supply Chain Academy at the South San Francisco Conference Center, September 11-12, 2008. As Principal, Commercial Operations, he is responsible for policies, practices, and metrics to maximize cost effectiveness and customer service for Wyeth Consumer Healthcare and its retail customers. Joe has over 25 years of leadership experience in many aspects of Operations Management, in both plant and headquarters environments, in the pharmaceuticals, biotech, and consumer products businesses. He has implemented and continuously refined Sales and Operations Planning processes within Wyeth and has led major projects ranging from the launch of the world’s largest selling vaccine, to the design and implementation of aligned consumer business metrics.
A long-time active member and supporter of APICS, the Association for Operations Management, he served on the APICS Board of Directors in various capacities for nine years, and was the President of APICS in 2007. While leading APICS, he oversaw the development of a strategic planning process and implementation of a new governance model to support globalization.
Q. How do you define the supply chain for the biotech industry?
A. In any industry, a fully integrated supply chain encompasses all activities required to orchestrate the planning, procurement, movement, storage, manufacture, release, and sale of an enterprise's products, starting with the supplier's suppliers and extending through to the end user. In the biotech industry, planning becomes especially complex and critical because of unusually long lead times, variable yields, risk associated with products under development, and extraordinarily costly capital resource requirements. Supply chain leadership in the biotech industry demands a thorough understanding of the unique aspects of the business, such as regulatory and compliance attributes, process capabilities, and market dynamics, as well as some expertise in the operations management body of knowledge.
Q. Do the traditional principles of supply chain management apply to what is basically a science of drug development where the failure rate of commercializing a drug can be as high as 80%?
A. The beauty of the operations management body of knowledge, which encompasses end-to-end supply chain management, is that the principles apply in any industry. Because of the great degree of uncertainty that exists regarding product approval and licensing, coupled with the process variability inherent in products that are "grown" as opposed to simply being assembled, it's critical that a biotech company use the tools of the trade to ensure that its game plans are indeed able to support the organization's long-term strategy.
Q. What are the measures of performance for management control in the overall biotech supply chain?
A. Measurements of performance should include both top-level and supporting metrics. Top-level measures describe the overall health and success of the business, whereas the supporting metrics cover the drivers of those results. Management should be sure that there are adequate supporting measures in place for each top-level objective, and that regular monitoring of those metrics occurs, to avoid surprises and to ensure achievement of the top-level objectives. At the top, the measures tell us quickly how well the business is rewarding its investors. Such measures include profit margin, return on assets, and growth rates. Supporting measures that indicate the level of supply chain effectiveness include inventory turns, lead time, yield, quality, and variability measures.
Q. How do you align strategies, operations, metrics and practices in an industry that has long R&D cycles, high cost of development and extreme governmental regulations?
A. As I will discuss in my talk, there needs to be a forum for regular assessment and adjustment of the company's operating plans to take into account continually changing circumstances and constraints. This forum must include key decision makers from every area of the enterprise's operations, and its objectiive should be to enable achievement of the firm's overall business objectives. In the case of biotech businesses, Regulatory, Research, and Development representation and participation become especially critical, but essentially, the process is one that is applicable across all industry types, and it's known as Sales and Operations Planning.
Q. And how dynamic this alignment has to be?
A. It's necessary to establish a regular review cycle, usually monthly, to keep up with the inevitable dynamics of change that occur external and internal to the enterprise. It's also recommended to have in place a system for managing changes to short-term plans in between review cycles, to balance a need for responsiveness against excess nervousness of work plans, schedules, and priorities.
Q. What best practices can be learned from other industries?
A. Generally, the high-volume, low-margin consumer goods companies, both the suppliers and the retailers, have led the field in terms of exemplary supply chain performance. They have traditionally focused on cost, flexibility, and responsiveness as major opportunities to improve bottom-line results. Material handling, warehousing, package design, and Collaborative Planning, Forecasting, and Replenishment (CPFR) arrangements are but a few examples of outstanding gains in these areas. Moreover, as new products age and are faced with more and more direct competition and more roughly equivalent products come to market, a firm's success becomes more dependent on the relative efficiency of its supply chain in driving down costs. Consequently the most competitive, "commoditized" industries have shown supply chain superiority.
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