A global production network against supply shortages

Thomas Lersch, Head of Global Supply Management, is quick to find the slide he wants to show. A diagram with a timeline and two curves appears on his screen. The lower line represents the demand expected in 2014 for one of our drugs. The upper line, which grows wider and steeper over the years, reflects the actual demand of recent years: "This drug has been approved for more and more indications since its market launch. Today, this medicine improves the quality of life for millions of people. For us, this means that we need to optimize and expand our capacities." 

But compared to other industries, buying, processing and producing more than planned is much more difficult, time-consuming and cost-intensive in pharmaceutical production. "To be honest, it's a huge challenge, but one we're happy to take on," says Lersch. 

Our remedy against supply shortages: a strong production network 

To meet this rising demand and to be able to act flexibly in a volatile environment, we’ve expanded our global pharma network in recent years. A specially founded team, the Supply Network Strategy, is fully dedicated to its design. Christoph Ruhfaut, Strategy Officer Pharma Supply and a member of the Supply Network Strategy, sums up the team's vision: "A global super-factory, where we share knowledge and experience across borders." Where each country would analyze individual problems and find their own solutions in the past, everyone now collaborates much closer. Today, a colleague from Greece helps to optimize a machine in Mexico and vice versa: "This way we can be faster, learn from each other. distribute, optimize and adjust our capacity utilization not only locally, but also globally." 

Preventing drug shortages: optimizing and expanding production capacity 

"Adjusting" can have many different facets. In the short term, we can adjust working hours through shifts, hire new staff or retrain employees. We can also convert machines and make them fit for higher capacity utilization. In the medium or long term, we can get support by outsourcing certain tasks to external partners or investing in new machines, equipment or even entirely new buildings. However, these options can take a very long time, as the approval processes and validations require time and money. 

And all of this only works in close coordination. That's why experts from various areas of Operations meet regularly to be able to react to deviations in the short term, and  keep an eye on our long-term strategic planning. That’s also why we work with stock levels in our in-house active ingredient production.

Ruhfaut sums it up: "We want to find a good balance and make optimal use of our existing capacities, but also build new capacities with foresight and prudence." 

Contributing to global drug supply with strong and flexible supply chains 

It’s a long way from the forecast of the demand to the shipment of a drug; One with detours and obstacles, one that demands a lot from our global teams, and one that is in need for investments. But our ambition is always clear: react quickly and meet the patients’ demand for vital medicines. 

Supply chain expert Lersch takes a final look at his slide with the diagram. What does the future hold? "We assume that demand will continue to be high, but the market will also remain volatile. What this means for us is clear: we need to stay flexible and continue to expand our strong network."