biogen & resilinc case study: proactive risk … case study...biogen and resilinc case std:...

9
BIOGEN AND RESILINC CASE STUDY: PROACTIVE RISK MITIGATION IN HURRICANE SEASON © Resilinc Corporation. All Rights Reserved. Biogen & Resilinc Case Study: Proactive Risk Mitigation in Hurricane Season February 2, 2018

Upload: others

Post on 14-Jul-2020

15 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Biogen & Resilinc Case Study: Proactive Risk … Case Study...BIOGEN AND RESILINC CASE STD: PROACTIVE RISK MITIGATION IN HRRICANE SEASON Learning in the fire In the final weeks of

BIOGEN AND RESILINC CASE STUDY: PROACTIVE RISK MITIGATION IN HURRICANE SEASON

© Resilinc Corporation. All Rights Reserved.

Biogen & Resilinc Case Study: Proactive Risk Mitigation in Hurricane SeasonFebruary 2, 2018

Page 2: Biogen & Resilinc Case Study: Proactive Risk … Case Study...BIOGEN AND RESILINC CASE STD: PROACTIVE RISK MITIGATION IN HRRICANE SEASON Learning in the fire In the final weeks of

Page 3

BIOGEN AND RESILINC CASE STUDY: PROACTIVE RISK MITIGATION IN HURRICANE SEASON

Learning in the fireIn the final weeks of summer 2017, three hurricanes and a powerful earthquake killed more than 1,000 people and caused hundreds of billions in damage in the Caribbean, U .S . Gulf Coast and Central Mexico . Of these disasters, Hurricane Maria killed the most people—more than 500, a death toll that continued to mount in Puerto Rico for weeks after the storm passed .

Maria also profoundly damaged the island’s large pharmaceutical industry, idling many of the estimated 50 pharmaceutical plants there, causing drug shortage concerns across the United States and leading the FDA to take emergency actions to ensure adequate supply of IV amino acids and IV saline.

For large pharmaceutical companies, Maria and the other three natural disasters in August and September of 2017 caused supply chain disruptions. This whitepaper details how one company, Biogen, leveraged its supply chain resilience capabilities—capabilities enhanced since 2015 by Resilinc’s supply chain mapping and analytics services—to create competitive advantage and protect its stakeholders by taking action to mitigate the risks from these events .

In all four events, the firm used Resilinc’s suite of capabilities, including supply chain mapping, 24x7 event monitoring and “What-If” scenario planning to understand potential impacts on suppliers and take proactive action . The information provided by Resilinc was utilized by the company’s cross-functional “war room” to make recommendations to senior management and provide guidance to line executives .

In the wake of the disasters, Biogen used its experiences to create several disaster-response “playbooks” that will be incorporated in the company’s risk governance system, enabling managers of future natural disasters to respond in a streamlined fashion .

Progressive approach to supply chain risk managementBiogen discovers, develops, and delivers worldwide innovative therapies for people living with serious neurological and neurodegenerative diseases. Founded in 1978 as one of the world’s first global biotechnology companies by Charles Weissman, Heinz Schaller, Kenneth Murray, and Nobel Prize winners Walter Gilbert and Phillip Sharp, today Biogen has the leading portfolio of medicines to treat multiple sclerosis; has introduced the first and only approved treatment for spinal muscular

Page 3: Biogen & Resilinc Case Study: Proactive Risk … Case Study...BIOGEN AND RESILINC CASE STD: PROACTIVE RISK MITIGATION IN HRRICANE SEASON Learning in the fire In the final weeks of

Page 4

BIOGEN AND RESILINC CASE STUDY: PROACTIVE RISK MITIGATION IN HURRICANE SEASON

atrophy and is focused on advancing neuroscience research programs in Alzheimer’s disease and dementia, MS and neuroimmunology, movement disorders, neuromuscular disorders, pain, ophthalmology, neuropsychiatry, and acute neurology . Biogen also manufactures and commercializes biosimilars of advanced biologics .

Like other pharmaceutical and life sciences companies, Biogen operates in highly competitive markets under complex regulatory frameworks with pricing and reimbursement policies that are frequently changing and often the subject of intense political debate .

Biogen has approximately 7,400 employees and markets its products in about 80 countries . Biogen manufactures its products at two facilities; located in North Carolina and Denmark and is currently building in Switzerland what will be its largest biologics manufacturing facility . It also sources products from third-party contract manufacturers and provides manufacturing services for clients at its own facilities .

For a large global company in such a competitive industry, a robust supply chain risk management (SCRM) program can translate into competitive advantage through better cost management and improved ability to mitigate potential disruptions .

A unique feature of Biogen’s SCRM program is its integration into the company’s Global Security Operations Center (GSOC), a 24/7 command center where highly trained staff monitor incidents and potential threats globally while tracking the safety of employees, facilities and products. “We have full integration of our enterprise software with our GPS monitoring service providers, so we have full visibility into every shipment,” said Daniel Biran, vice president of global security. Using public and subscription intelligence services, the GSOC sometimes knows about incidents like terrorist attacks “before CNN knows about it,” according to Biran. “We also monitor political trends, and we produce papers on geopolitical trends and events in sensitive regions, from the Middle East to the Korean Peninsula.”

While it is uncommon for a corporate security department to be so involved in SCRM, Biran says that both functions benefit from the integration. “In order to design and build a robust supply chain security program, including addressing issues such as diversion, theft and counterfeiting, you need to understand who your partners are, understand what their business continuity plans are and collaborate with them to identify weak points along the supply chain,” he said.

Since partnering with Resilinc, Biogen’s GSOC has been able to immediately measure the impact of critical incidents on its supply chain, a capability that proved immensely valuable in responding to the disasters of summer 2017.

In order to design and build a robust supply chain security program, including addressing issues such as diversion, theft and counterfeiting, you need to understand who your partners are, understand what their business continuity plans are and collaborate with them to identify weak points along the supply chain.

Daniel BiranVP, Global SecurityBiogen

Page 4: Biogen & Resilinc Case Study: Proactive Risk … Case Study...BIOGEN AND RESILINC CASE STD: PROACTIVE RISK MITIGATION IN HRRICANE SEASON Learning in the fire In the final weeks of

Page 5

BIOGEN AND RESILINC CASE STUDY: PROACTIVE RISK MITIGATION IN HURRICANE SEASON

Irma called for expedited shipmentThe first of the four natural disasters to put Biogen’s GSOC into alert mode was Hurricane Harvey, which made landfall on the Texas coast on August 25. While flooding caused by the hurricane would do extensive damage to supply chains in many industries, especially petrochemicals, Biogen’s security and supply chain staff were quickly able to determine that the storm would have no significant impact on Biogen’s supply chain. That quick assessment, enabled by Resilinc’s data and technology, allowed Biogen’s supply chain teams to get back to their daily responsibilities and not get caught up in the reactive data collection or the whirlwind of media coverage of the event .

Within a few days of Harvey’s dissipation, however, Biogen became concerned about Hurricane Irma . As monitored by Resilinc, Irma’s likely storm track was bearing down on supplier facilities in Florida and potentially other Southeastern states. “We ran ‘What-If’ scenarios that looked at the impacts if the storm covered all or parts of Florida, if it went west into Alabama or north into Georgia and the Carolinas,” said Lee Spach, director of supply chain security . As the storm was originally forecast to hit the east coast of the state, but actually made landfall on the Gulf coast of the state, Biogen’s ability to quickly assess multiple different scenarios ensured that they were prepared for any and all potential tracks of the storm .

Biogen identified several Florida suppliers that were likely to be hit by the storm. At one site, there was a significant inventory of work in progress (WIP) materials awaiting final assembly and shipment to another facility in Kentucky for distribution. A painless solution was quickly developed: ship the goods immediately to the Kentucky site before Irma disrupted the previously scheduled shipment .

Source:Resilinc

Page 5: Biogen & Resilinc Case Study: Proactive Risk … Case Study...BIOGEN AND RESILINC CASE STD: PROACTIVE RISK MITIGATION IN HRRICANE SEASON Learning in the fire In the final weeks of

Page 6

BIOGEN AND RESILINC CASE STUDY: PROACTIVE RISK MITIGATION IN HURRICANE SEASON

Social media chatter sounds earthquake alarmWithin days of Irma’s dissipation off the coast of New England, Biogen’s GSOC staff began issuing global security briefings on Hurricane Maria, which had intensified to category 5 status on Sept . 18, just before making landfall on Dominica .

But as Maria was starting to batter islands in the Caribbean, Resilinc Event Watch notifications as well as social media chatter monitored for Biogen by DataMinr alerted the GSOC to a major earthquake in central Mexico. “We knew about the incident literally within 25 minutes,” said Biran. “We were quickly able to identify our resident and traveling employees in the zone of impact, communicate with all of them and let senior management know that everyone was safe.”

To determine impacts to suppliers, Biogen used Resilinc to geofence the incident’s zone of impact and run What-If scenarios to determine potential impacts to suppliers . Biogen used its internal mapping systems to identify clinical sites such as universities and medical research institutes where drug trials were being conducted . “We were quickly able to determine that we had vials being made in Mexico City for our U .S . manufacturing, that our distributor for the Mexican market had materials stored in three private-label warehouses, and that we had several clinical sites dependent on movement of clinical supplies,” said Spach. To mitigate the risks of supply disruptions to its clinical sites, Biogen identified alternative sites outside the zone of impact and shipped the relevant products to those sites .

At the same time, the firm began running What-If scenarios for Hurricane Maria’s impact on Puerto Rico; in its Resilinc database, staff quickly saw that two suppliers providing 25 to 30 items for Biogen’s North American manufacturing were at risk .

Resilinc gave us visibility into our multi-tier supply chain and the ability to run ‘what-if’ scenarios for supply chain reliability and make procurement decisions based on those risk assessments.

Daniel BiranVP, Global SecurityBiogen

Page 6: Biogen & Resilinc Case Study: Proactive Risk … Case Study...BIOGEN AND RESILINC CASE STD: PROACTIVE RISK MITIGATION IN HRRICANE SEASON Learning in the fire In the final weeks of

Page 7

BIOGEN AND RESILINC CASE STUDY: PROACTIVE RISK MITIGATION IN HURRICANE SEASON

War room coordinates Maria responseMaria would become the most serious threat of major disruptions to Biogen’s supply chain in 2017. To manage it, Spach and senior manufacturing and supply chain leaders established a “war room” for cross-functional collaboration. Beginning September 21, managers and staff from global supply chain, security, business continuity, regulatory, and other departments met daily to process incoming data on the damage to Puerto Rico, identify suppliers at risk and make recommendations to senior management and line managers .

“Instead of everybody involved communicating bits and pieces of information by email and creating a confused picture, we had one source of the truth that managed the flow of information carefully and efficiently,” said Spach. “We literally took over a conference room. We started with four or five people, and by the second day there were 10 to 15 people engaged, including certain commodity managers who had not been directly engaged with our Resilinc system before, and the relationship managers for the suppliers. We had manufacturing science, internal and external production, and regulatory staff there.”

Adding to the urgency, both the FDA and the Pharmaceutical Research and Manufacturers of America (PhRMA) had contacted Biogen and other pharmaceutical manufacturers to ask what impacts Maria might have on the industry’s ability to produce medications .

The GSOC had determined that there were no Biogen facilities on Puerto Rico and only three employees, all of whom were soon identified as safe. Getting a read on the two suppliers’ status was more challenging . Initially, both sought to reassure their Biogen contacts that their plants weren’t damaged, that they would be able to function with backup generators and meet their delivery commitments .

“But we were seeing other data, even on CNN, that led us to question these rosy predictions,” said Spach. “We started asking questions: ‘How many of your employees will be able to get to work? How long will you have diesel for the generators? How will you get the materials to the ports and off the island?” The Biogen team started feeding data to the suppliers about fuel shortages, disruptions to commercial land and sea shipping and even the fact that most workers were staying home to deal with damage to their homes and tend to family members . Soon, the suppliers confirmed the bleak assessments.

Page 7: Biogen & Resilinc Case Study: Proactive Risk … Case Study...BIOGEN AND RESILINC CASE STD: PROACTIVE RISK MITIGATION IN HRRICANE SEASON Learning in the fire In the final weeks of

Page 8

BIOGEN AND RESILINC CASE STUDY: PROACTIVE RISK MITIGATION IN HURRICANE SEASON

Offsetting risk with forward purchasingIt became apparent that it would be weeks, if not months before power grids and other critical infrastructure were restored in Puerto Rico . By that point, the war room team had identified 25 to 30 items important for Biogen’s manufacturing that were expected from the two suppliers; the team had also “risk-mapped” all of them based on how easily other items could be substituted or how readily the same items could be obtained from other suppliers outside Puerto Rico .

Six items were classified as being at high risk due to Maria—items that were sole-sourced from the manufacturers on the island, some of which were custom-made to Biogen’s specification and therefore difficult if not impossible to find ready substitutes for. “One of the most critical materials wasn’t an API or a chemical,” said Biran. “It was something as mundane as plastic bags that our manufacturing plants used to store bulk manufactured biologic medicines in from our facilities. .”

By day four, the war room had reached out to the firm’s internal manufacturing networks and compiled data on the projected consumption of the high-risk items over the coming 12 months . Its recommendation to senior management: execute approximately $1 .3 million in purchase orders for items that were at risk of shortages due to Hurricane Maria from suppliers that were not disrupted by the event .

Management agreed to make these advance purchases, and the supplier relationship managers were asked to map out delivery logistics . Especially important was determining if items would come from facilities that hadn’t been approved by the FDA. “We knew we might have to work with the FDA to see if we could get exceptions to pull these materials in from other plants.”

As the power outages and other disruptions continued in Puerto Rico, the war room team recommended a second even larger purchase. “We looked further into the future for forward coverage,” said Spach.

We also decided to dual source with off-the-shelf items as much as possible instead of items made to our specifications.

Lee SpachDirector, Global Product and Supply Chain SecurityBiogen

Page 8: Biogen & Resilinc Case Study: Proactive Risk … Case Study...BIOGEN AND RESILINC CASE STD: PROACTIVE RISK MITIGATION IN HRRICANE SEASON Learning in the fire In the final weeks of

Page 9

BIOGEN AND RESILINC CASE STUDY: PROACTIVE RISK MITIGATION IN HURRICANE SEASON

Biogen also used its management of Maria and the other disasters as launching pads for cross-functional playbooks to be incorporated at the company level within the Resilinc tool, and as a reference for future disasters. “The goal is for it to be system-dependent, not person-dependent,” said Spach. “The Resilinc system is a great place to curate the playbook so whoever comes along in future can see what we did with Maria.”

Lessons in resilienceWith management’s approval of $3.5 million in forward purchasing of the at-risk items, Biogen averted what could have been costly delays in manufacturing due to shortages of supplies as prosaic as plastic bags.In the weeks after the immediate response to Maria, Biogen took action to begin dual-sourcing the single-source items that had been coming from Puerto Rico. “We also decided to dual source with off-the-shelf items as much as possible instead of items made to our specifications,” said Spach.

Page 9: Biogen & Resilinc Case Study: Proactive Risk … Case Study...BIOGEN AND RESILINC CASE STD: PROACTIVE RISK MITIGATION IN HRRICANE SEASON Learning in the fire In the final weeks of

Page 10

BIOGEN AND RESILINC CASE STUDY: PROACTIVE RISK MITIGATION IN HURRICANE SEASON

About BiogenAt Biogen, our mission is clear: we are pioneers in neuroscience . Biogen discovers, develops, and delivers worldwide innovative therapies for people living with serious neurological and neurodegenerative diseases. Founded in 1978 as one of the world’s first global biotechnology companies by Charles Weissman, Heinz Schaller, Kenneth Murray, and Nobel Prize winners Walter Gilbert and Phillip Sharp, today Biogen has the leading portfolio of medicines to treat multiple sclerosis; has introduced the first and only approved treatment for spinal muscular atrophy; and is focused on advancing neuroscience research programs in Alzheimer’s disease and dementia, neuroimmunology, movement disorders, neuromuscular disorders, pain, ophthalmology, neuropsychiatry, and acute neurology . Biogen also manufactures and commercializes biosimilars of advanced biologics .

We routinely post information that may be important to investors on our website at www .biogen .com .

About ResilincResilinc is the leading provider of supply chain resiliency solutions and delivers scalable enterprise solutions that enable supply chain professionals to gain visibility across multiple tiers of their complex, global supply chains. With a comprehensive offering that encompasses multi-tier supply chain mapping, single points of failure analytics, global disruption event monitoring and management, mitigation workflow and part-level supply chain compliance programs for conflict minerals monitoring and business continuity planning, Resilinc has become the leader in comprehensive supply chain resiliency solutions . Resilinc helps customers achieve supply chain resiliency through innovative and patent-pending technology, an extensive resiliency-driven supply network, and a proven comprehensive enterprise scale solution that delivers strong value to both clients and supplier partners .

For more information, visit http://www.resilinc.com .

Disclaimer© 2018 Global Supply Chain Resiliency Council and Resilinc Corporation . The information contained in this publication represents the opinions of Resilinc or has been obtained or inferred from sources believed to be reliable . Resilinc disclaims all warranties as to the accuracy, completeness, or adequacy of such information and shall have no liability for errors, omissions, or inadequacies in such information. This publication consists of the opinions of Resilinc’s research organization and should not be construed as statements of fact . The opinions expressed herein are subject to change without notice . Although Resilinc research may include a discussion of related legal issues, Resilinc does not provide legal advice or services and its research should not be construed or used as such .