Security of Supply – implementing Procurement strategies for the new normal at Roche Diagnostics

A short article by Ian Rendle, Global Head of Procurement Operations, Roche Diagnostics  

We all experience an increasingly complex, fast-paced and dynamic environment. Overlapping and compounding global crises continue to present challenges and opportunities in our professional and personal lives. Natural disasters, pandemics or geopolitical tensions have differing effects and impacts, disrupting stability and requiring quick and targeted action. What does this mean for Procurement organizations? Partnership with our suppliers is more important than ever, calling on us as Procurement professionals to innovate, leverage synergies and share our knowledge. Doing so will enable us to navigate proactively and strategically through these exceptional times.

Our approach: Security of Supply

Many companies have initiated programs to strengthen their supply chains and proactively manage supply risks. So have we at Roche Diagnostics. As a global leader in healthcare, we take our role seriously in providing vital diagnostic solutions to patients and customers around the world. A key element is a resilient supply chain. We call our established program Security of Supply (SoS). While our approach may not be unique, we believe the insights that we have gained may be of interest to others facing the same challenges. Our transformational program focuses on driving both internal and external change at our suppliers. We attempt to drive change at our suppliers by interacting with them in typical Procurement fashion: supplier days, specific supplier communications, or more targeted discussions via our regular supplier business review meetings.

In general, we ask our suppliers to:
• Consider the current geopolitical & economic environment, and continuously assess and mitigate their supply risks
• Communicate proactively with Roche to avoid disruptions and invite us to help them to solve supply issues
• Rethink and review with Roche their long-term capacity planning and potential bottlenecks
• Establish “Security of Supply” at all levels in the organization and beyond so that it is in their company’s DNA

While these “asks” may seem straightforward, it is amazing to see how many companies have not yet implemented structural supply risk management. We believe that our collaborative approach allows us to identify key risks earlier and deeper in our supply chain, where the issues often occur, and invest in structural improvements that mitigate these risks.

Essential for success: Transforming the way we think and act internally

Our multi-year program on Security of Supply is also gaining excellent traction internally. This program has the broad aim of transforming the way we think (all functions) about supplier risk and incorporating it into our daily decision-making. More specifically, we have designed, automated as much as possible and deployed globally aligned risk criteria to assess risk at both the supplier and buy item level. We are working hard to assess the risk level of all our purchased materials and suppliers and initial assessments of a select number of our diagnostics systems have already been completed. We have supplemented the detailed risk assessments with comprehensive, market-level evaluations of supply risk via our category strategies. Based on these ongoing assessments, mitigation plans and concrete actions are being denied and implemented. The risk mitigation activities vary depending on the situation, sometimes more simple supply optimizations suffice, but we also are investing significantly in building a structurally less risky supply base via the implementation of dual and alternative sourcing for high-risk items.
The SoS program still has a lot to work on, but our Procurement teams are being recognized and praised for the strong leadership shown regarding this important value driver. We are still on our journey, but supply risk management is becoming an integral part of our DNA.

 

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Ian RENDLE is currently Head of Global Procurement Operations at Roche Diagnostics, leading procurement teams that support manufacturing and global supply chain operations across three continents. Previously he was VP Procurement at Cardinal Health, global category lead for raw materials and components. Ian has 20 years of procurement leadership experience across various industries. He holds Masters Degree in Mechanical Engineering from the University of Cambridge.