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. Whether we are developing an innovative medicine or manufacturing a new diagnostic device, we integrate sustainable thinking and practices throughout our supply chain. The goal is to respond quickly to market developments and ensure reliable product supplies, while reducing our environmental footprint and ensuring high social standards.
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. Pursuant to our sustainable supply chain strategy, we incorporate environmental, social and governance responsibilities into all aspects of our operations – from research into new products, through to delivery to customers. We employ processes designed to:
- identify and respond quickly to risks to supply chain quality and stability
- build spare manufacturing capacity
- maintain appropriate inventory levels
- provide manufacturing flexibility by employing dual sourcing for the production of products as needed
We also work with suppliers to increase supply chain resiliency for crucial raw materials that are sole-sourced or have long lead times.
Procurement teams work closely with our business partners and suppliers along the value chain to manage business and operational risks and opportunities. We take a holistic approach to procurement decisions, analysing total cost of ownership to create maximum value. We have merged two divisional procurement units to form a Global Procurement organisation under one global procurement policy, with aligned processes and systems. This ensures sustainable performance and adherence to industry codes and best practices.
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.
Logistics & supply
As one of the world’s leading pharmaceutical companies and the global leader in diagnostic testing, our responsibility to deliver our products safely and securely is of paramount importance.
We use product-specific solutions to ensure the reliable and uninterrupted delivery of our products, including:
- integrated logistics suppliers that provide land, air and sea freight services
- temperature controlled containers to prevent damage to products or medicines
- special handling and monitoring to ensure the integrity of sensitive products
- closed cold-chain solutions for biologic medicines in compliance with all legal regulations
- security measures throughout the supply chain to prevent theft or tampering
We partner with reliable transportation companies to prevent supply shortages and shipping delays of our medicines and diagnostics 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 twenty 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 2017, we conducted 156 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 2017, we received 68 audit reports and supplier self-assessment questionnaires via the PSCI collaboration (compare at 51 in 2016). Feedback from the suppliers on the collaborative assurance visit approach was largely positive.