How Pharma Giants are Creating Value in Procurement

April 10, 2017 EcoVadis

procurecon-pharma-zurich-17

 

Conferences. You either love them or endure them. Sometimes it can seem like a trying experience.

  • Trying to absorb as much information as possible.
  • Trying to meet new people and share ideas.
  • Trying hard not to overdo the hospitality.
  • Trying to get the best out of the money you’ve invested to be there.

 

I’ve been to many conferences over the years and I can honestly say that this was a great event. The agenda, speakers and content was of a consistently high level. Panel sessions and interviews gave us great insights into the key drivers facing the Pharmaceutical industry today.

There was a high level of interaction and the debate was engaging and thought provoking.

 

The conference kicked off with a keynote from Jean-Yves Rotte-Geoffroy, Chief Procurement Officer (CPO) of GSK. His thought-provoking session covered GSK’s approach to managing risk and innovation. He discussed openly and honestly the challenges of managing risk. He also described how GSK is working with Ecovadis to assess risk as a core element of their global strategy.

 

At one point Jean-Yves asked us how Spiderman and Lord Browne (former chairman of BP) are connected. It was an intriguing question and apparently they both said …

‘With great power comes great responsibility’

For a global business that means being a responsible corporate citizen. Doing the right thing for all stakeholders, partners, employees and society at large. Jean-Yves recommended we read ‘Connect’ by John Browne which I can confirm is definitely worth reading.

In ‘Connected’ Browne says that Corporate Social Responsibility (CSR) is dead. He says it never worked and was largely ignored by most CEO’s. He advocates a different approach and his arguments are compelling. You’ll have to read the book to learn more!

 

Jean-Yves was followed by panel sessions and interviews before we heard from the inspirational Cathy O’Dowd.
Cathy is the first woman to have climbed Mount Everest from both the North and South routes. A lasting image in my mind was when Cathy told us that (1) Everest was just a ‘big pile of rock and snow and (2) the actual summit is the size of one of the circular tables we all sat around.

In her fascinating account she described the tensions and pressures of being part of the first South African team to scale Everest. She used these stories and experiences to share with us, the key things that makes teams succeed:

  • Agree a common vision that everyone commits to achieve,
  • Create simple goals that directs everyone’s attention to the part they play,
  • Expect the best outcome but plan for the worst,
  • Celebrate success as criticism can be destructive. Recognising positive steps will always give you the motivation to achieve even more.

 

Cathy also advised us to never to take things for granted, because complacency kills. Maybe not in a business context, but certainly on top of a rather large mountain!

 

Other highlights

There were many excellent sessions and discussions over the three days. These are some of the key things I took away.

Making the complex simple

It’s a complex and unpredictably fast moving world. There are so many tools, processes and data to assimilate. And this makes business far too complicated. The goal is to simplify.

By making things easier to understand, we can make more informed decisions more quickly. And that’s the key to success in today’s super competitive environment.

Managing Risk

Eduard Bagan, Head of the Risk Management Centre of Excellence at Merck gave us a simple equation on Risk mitigation.

He said whilst we can’t often predict or even manage some risks, we can control the impact. The outcome of any event depends on your response to it. A simple but perfect illustration.

Changing Mindset

Leaders are moving from measuring supplier performance to building relationships with strategic partners.

Gisele Tavares, Roche Head of Alliances said that successful relationships are based on honesty, trust and leadership.

There are four parts to building this:

  1. Common culture with shared values and goals
  2. Focus on joint outcomes to satisfy the needs of both parties
  3. Measure both quantitative and qualitative results
  4. Change in attitude from a master-servant to a peer-to-peer relationship

Thinking Differently

Product, service and process innovation was also discussed at length. There was debate about how to create the right environment for innovation. This included creating space for people to think, dedicated teams and the right level of investment.

But what struck me as the most important quality is curiosity. That’s because nothing changes unless you look at things differently.

Creating Value

Procurement is moving away from just buying stuff at the best price. Of course this is important, but leaders are focusing on how they can add value through their activities.

Dapo Ayaji, CPO at Astra Zeneca spoke passionately about how partnering is being embedded into their corporate DNA.

She described how Astra has created a ‘Super Partner Programme’. This engages more deeply with the business to deliver more effective solutions to real business needs.

 

In Summary

There are key learning points for practitioners and service providers.

For practitioners

You will have learned that ‘business as usual’ probably won’t work in the future. Doing what you’ve always done won’t help your business to grow and prosper.

Change the way you think about working with internal partners and service providers. Establish common goals and look at qualitative as well as quantitative outcomes.

Procurement is rapidly changing. Today it’s about more than saving money. It’s also about improving performance and creating value for all stakeholders.

For service providers

You must be aware of what the key drivers are for the people you are trying to sell to. Only by connecting with these will you succeed.

Change the way you think about how you sell. Don’t just push your product or service at them. Focus on how you can help to create a common vision. Provide leadership and new ideas. Become a problem solver and earn their trust.

Business is changing. It’s about more than closing a sale at the highest margin as fast as possible. It’s about building a mutually profitable longe-term relationship. When you do this you both succeed.

And that’s the basis of any great relationship.

 

Article contributed by John Rees, Alliances Director at EcoVadis

First published on Linkedin in March 2017.

 

Missed the event? No worries, you can still access all the presentations from ProcureCon Pharma

CLICK HERE TO DOWNLOAD CONTENT

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