Collaborating with suppliers on sustainability and risk management
Managing our supply chain
Our manufacturing, procurement and logistics functions provide more than 100 medicines, over 140 diagnostics instruments and over 850 diagnostic tests to patients, laboratories and healthcare professionals worldwide.
We seek to build a resilient supply chain by adhering to best practices, developing novel approaches and working in partnership with our suppliers. Business continuity planning and risk management are the cornerstones of our approach.
Our pharmaceutical manufacturing network produces medicines for commercial supply. With some of the world’s most sophisticated biopharmaceutical production plants, the Roche network hosts the industry’s highest global biologic production capacity.
The Roche Diagnostics manufacturing network produces state-of-the-art instruments that perform more than 850 diagnostic tests.
In both networks, our processes and facilities are maintained to rigorous safety and health, quality and environmental standards.
Supply Chain Strategy Targets:
For our manufacturing and supply chain we set ambitious targets. For example, some 2020 key targets of our pharma manufacturing organisation are listed below:
- On-Time-In-Full (OTIF) Supply: sustain >97%
- Stock-out of medicines: approaching zero
- Inventory (days of coverage): reduce by 35% compared to level end of 2015
- End to End Leadtime (E2E LT) for Manufacturing, Quality Analysis and Release for Sales: Top quartile in benchmark in pharma industry
- Finished goods order lead time: 30 days for 96% of sales
We monitor target achievement and we are fully committed to ensure uninterrupted supply to patients.
Importance of suppliers
We rely on a large and diverse global network of suppliers to support the development, manufacture and delivery of our innovative medicines and diagnostics worldwide. Our network consists of 60,000 suppliers in Pharmaceuticals and Diagnostics in 6 continents, approximately 80 countries and many cultures.
Our suppliers provide products, such as raw materials and active pharmaceutical ingredients, packaging and contract manufacturing. We further use service providers to supply temporary labour, laboratory equipment and IT support, as well as contract research, marketing services, consultancy and a range of other services.
Our suppliers play an important role in Roche maintaining its competitive advantage. They enable us to provide innovative diagnostic and therapeutic products that deliver significant benefits to patients. Our supply chain is central to our business, helping us improve efficiencies, exploit the latest technologies and redeploy resources to vital areas of our business such as R&D.
When selecting suppliers, we seek innovative products, services and ideas that will contribute to the growth of our dynamic business. We also seek suppliers that share our commitment to sustainability. Our approach is to develop long-term supplier relationships, with the aim of improving both of our businesses and the world we live in.
Our business critical suppliers - approximately 1'000 who meet certain risk criteria - provide materials, logistics and distribution services or contract manufacturing essential to our Pharmaceutical and Diagnostics Divisions. We work with many of these businesses to help them improve their quality systems and expand capacity sustainably as needed.
Increasing Supplier Standards across the Industry
Roche is a member of the Pharmaceutical Supply Chain Initiative (PSCI), a collaboration of more than 30 pharmaceutical companies with the vision to establish and promote responsible practices that will continuously improve ethics, labor, health, safety and environmentally sustainable outcomes for the supply chains. Roche has included the PSCI Principles in the Roche Supplier Code of Conduct. Through the PSCI collaboration we aim to leverage the increase of supplier sustainability standards across the pharmaceutical industry.
We work with our suppliers to ensure they operate in a manner consistent with our Supplier Code of Conduct. We use the PSCI audit protocol to conduct Supplier Sustainability Assurance Visits to measure compliance with the Roche Supplier Code of Conduct. In 2018, we conducted 126 visits, resulting in approximately 1,000 findings. We worked with our suppliers to take corrective actions and conducted follow-up audits to verify the proper resolution of identified issues. Our collaborative approach aims to create transparency and foster the relationship with the suppliers.
The PSCI supplier audit program allows suppliers to share audit reports with PSCI members thereby reducing duplication of audits. In 2018, we received 105 audit reports and supplier self-assessment questionnaires via the PSCI collaboration (compare at 68 in 2017). Feedback from the suppliers on the collaborative assurance visit approach was largely positive.