Teva api’s Control Tower Tackles the Unexpected to Help Meet Customer Demand
By Oren Reuveni, Director of Supply Services for Teva api
More than ever, pharmaceutical manufacturers must be flexible in order to meet the changing demand for medicines worldwide. While medium- and long-term planning is critical, in today’s fast-paced environment it is only part of the equation. When new market opportunities arise, pharmaceutical companies need to react quickly to stay a step ahead in this highly-competitive industry.
As their API supplier, we must also react quickly to support their needs. Teva api’s intricate global supply chain produces thousands of orders for nearly 1,000 customers, and while flexibility is essential it can be challenging to put into practice.
Control Tower activates to solve the unexpected
Our supply chain Control Tower operates at a global level and plays a critical role helping our manufacturing sites around the world handle exceptions that arise in the supply chain process. It also helps the organization as a whole better serve our customers by optimizing end-to-end services in three key areas:
Increased visibility. Reliable and up-to-date information is shared more efficiently across the organization, allowing us to quickly identify supply and demand exceptions and handle them proactively and accurately.
Improved collaboration and governance. We established dedicated forums to optimize deliveries to meet our customers’ needs. Cross-functional experts and managers from the manufacturing sites, sales offices and global functions work together to identify opportunities for improvement, analyze “what if” scenarios, and define clear action plans.
Continuous improvement. We routinely analyze root causes and define corrective actions across the supply chain to improve our performance over time.
Here are examples of ways the Control Tower can make a valuable contribution to the supply chain based on actual customer experiences.
Example: Leveraging the network for a solution
The pharmaceutical industry changes quickly and product demand is often unpredictable. Teva api’s global sales team and supply chain experts work closely with customers to plan ahead, but when demand unexpectedly outpaces supply, the Control Tower goes to work to help fulfil the need.
When a Teva api customer notified us that demand had increased significantly for a specific product in Europe and the rest of the world markets, we knew we would have to significantly increase production volume to fill their request. Our manufacturing site evaluated its production capacity and determined it could fill the order increase. However, the raw material supplier could not deliver an adequate quantity by the expected lead time. The Control Tower went to work to find a solution. We identified another manufacturing site in our network that used the same raw material that was approved in the file and arranged for some of its inventory to be transferred to the first plant so production could get underway. Through close collaboration between the Control Tower, the manufacturing sites, our supplier and the customer, we found a workable solution and delivered the product on time.
Example: Committing production for a competitive tender
When customers are interested in pursuing new market opportunities, the Control Tower works with them closely to figure out how to support new, large, and unanticipated orders. We do whatever necessary to support our customers as they increase their market share and expand into new areas.
Recently, a customer informed us that they planned to compete for a tender that would increase their US market share of a particular product. However, before they could apply the customer needed to determine if Teva api would be able to fulfill the order if the tender was successful. The additional quantity stipulated in the tender would be 700 percent larger than the customer’s original forecast, so the Control Tower’s cross-functional experts in production, procurement, logistics and sales went to work analyzing our ability to support the request.
Our production planners assessed the impact that an order of this magnitude would have on the manufacturing site, and whether or not it would have the capacity to meet production deadlines. Normally delivery time for the raw material needed is normally six months but in order to meet the requirements for this tender, the delivery timeline would need to be shortened to two months.
After several discussions between our procurement team, the vendor and the customer we were able to negotiate an accelerated delivery time thereby giving the customer confidence to move forward with the tender.
Change is constant
At Teva api we use our Control Tower to enhance our flexibility and react quickly to changing market conditions so our customers can maintain their competitive edge. Order changes are a way of life and there are dozens of factors that cause them including:
- A new product that is forecast to gain 10 percent of the market share gains 20 percent instead
- A customer’s competitor introduces or discontinues the same product offering
- A regulatory investigation pulls a product from the market or limits the customer’s ability to sell it
- Mergers and acquisitions
- Wins and losses of competitive tenders
- A customer’s strategic decision to change their portfolio or focus on a different business
We have found that adjusting our forecast on a rolling 12-month basis, communicating proactively with our customers, and reacting quickly to issues as they arise enhance our ability to handle change and stay ahead of the curve. This, of course, reflects the best type of solution that can be developed when there is a true partnership between Teva api and each customer.
The Control Tower has been in place for about a year at Teva api and has proven beneficial for both us and our customers. Internally, we are sharing more information about supply exceptions across several functional areas and continuously improving our processes. Most importantly, we are building even stronger partnerships with our customers and doing a better job meeting their changing needs. Whether they are manufacturing medicines to meet current demand or introducing new products to the marketplace, the Control Tower is a vital process to support customer requirements and delivery for success.
Oren Reuveni is Director of Supply Services for Teva api. With more than 18 years of experience in various supply chain management positions, Oren works with Teva api business units, global functions and the sales offices to optimize Teva api supply services across the globe.
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