Organization Name: Sanofi, Sanofi Pasteur (The “Sanofi”)
Industry: Global Health Care
Name of contact if available: Husnain Zakaria, Director of Supply Chain at Sanofi Pasteur
Web references: Sanofi Pasteur
Supply Chain Management “demystified”:
Simply put, supply chain management refers to the active management of the sequence of processes involved in the production and distribution of a commodity. Let’s take a simple example – bottled water for sale. All this involves is quality water, a plastic bottle, a cap and a label. If it retails in a store for $1.50, you might think the profits would amount to $1.30 per bottle? $1.10? Or even on the low side 75 cents?
This addresses a common misconception that product cost is equal to material cost. There’s a lot more happening behind the scene. It’s called supply chain management.
In the above example one needs to negotiate the purchase and costs of the empty bottles and caps. A forklift operator will be hired to lift the goods (empty bottles and caps) unto a truck. A truck driver will then be hired to deliver the empty bottles and caps to the manufacturing plant. When it comes to the label, it will have to be created, printed and shipped to the plant – again this will necessitate a forklift operator and a truck driver along with additional fuel and insurance costs. You’ll have to address the same logistics and costs to ship the bottled water to the retail stores. Finally, most bottled water brands have a 1-800 number printed on them – so you will have to incur the costs of having a call centre on standby to answer any customer related inquiries.
The sequence of the processes involved in this example from the supply chain and all the costs involved are added to the material cost.
Sanofi Pasteur is the vaccines division of Sanofi, a global company that provides more than 1.6 billion doses of vaccine each year to immunize over 500 million people across the globe. The company is regarded as a world leader in the vaccine industry.
Companies such as Sanofi Pasteur which produce vaccines must adhere to a high standard of supply chain management. The role of the supply chain is to ensure effective vaccine storage, handling, and stock management as well as rigorous temperature control in the cold chain.
“Overall, long production lead times represent a fundamental challenge (and substantial risk) in vaccine manufacturing, and weigh heavily on production plans and facility investment decisions well in advance of regulatory approval. The recent outbreak of novel influenza A (H1N1) – first identified in April 2009,and declared as a Phase 6 pandemic alert by the World Health Organization (WHO) on June 11, 2009 –provides a timely example that highlights the difficulties of dealing with capacity constraints and compressed lead times for a rapid response and large-scale vaccine production” – BIOTECanada
Supply chain executives at Sanofi rely on social media to provide them with the ability to:
- Share and be informed about the latest supply chain innovations
This is achieved by joining and frequently communicating with supply chain advisory boards and fellow executives via social media.
In July 2014 Sanofi joined the MIT Forum for Supply Chain Innovation. The group focuses on finding solutions to design and manage supply chains on a global scale.
As well, Sanofi formed a partnership with the Ministries of Health and Industry in Morocco that aims to share the expertise of Sanofi in supply chain management. Information is shared via Twitter, LinkedIn and YouTube.
By joining such groups and interacting with members via social media, Sanofi is able to stay on the edge of the most recent supply chain management improvements and integrate them into their own operations.
— Sanofi (@sanofi) January 28, 2011
— IQPC (@IQPC) February 18, 2015
— Fleming. (@Fleming_Events) June 16, 2014
- Create and foster honest and trustworthy relationships with key suppliers
By recognizing who their suppliers are, the company is able to forge strong (and long-term) relationships which are mutually beneficial and increase overall efficiency. The company awards key suppliers for outstanding achievements.
In 2009 Sanofi awarded Envirotainer, the maker of temperature-controlled air cargo containers (who Sanofi uses to transport vaccines – a crucial part of the supply chain) a special award.
“We shipped millions of vaccines around the world through this partnership and while we encountered various issues along the way, we did not lose a single dose during the past 48 consecutive months”. – Sherman Cheung, Former Supply Chain Director at Sanofi.
- Be recognized by their peers
By informing the supply chain community of their achievements via social media, Sanofi’s accomplishments are recognized and the company can enjoy an “elevated” status in supply chain management blogs, trade magazines and websites. As a result, they are able to be more selective in their supplier of choice and may also attract top talent.
In 2014, Sanofi won the Organization of the Year Award presented by the European Institute of Purchasing Management (EIPM – the Leading Institute in Strategic Sourcing and Supply Management).
In the above cases, social media allows Sanofi to share knowledge, suggest solutions applicable to supply chain management and be recognized within the “supply chain” community.
- Enhance internal and external communication
Employees of Sanofi must communicate daily with each other and with external suppliers to efficiently coordinate the production flow. Both companies stated that they are “behind the curve” when it comes to integrating social media in their daily supply chain information sharing but that they are aware that the potential to use Twitter, Facebook, LinkedIn merits a study.
Husnain ZAKARIA (Canada)
I spoke with Husnain Zakaria who is the Director of Supply Chain at Sanofi Pasteur in Toronto, Canada. He said they would consider looking at how social media might play a role in their supply chain operations but only after doing their due diligence, including a cost/benefit analysis. If they decide to proceed, it would not be immediate but over the medium-term (i.e. beyond two years). He also stated that Yammer was currently used to share internal communications.
Michele SAULT (France)
I had the chance to speak with Michèle SAULT, Supply Chain Business Support who works at Sanofi Head Office in Lyon, France.
She explained to me that the vaccine supply chain at Sanofi encompasses well over 20 different types of individual suppliers (ranging from airline companies to producers of medical devices or raw material). One of their key initiatives is to build a common we(bsite client-oriented) that would enable them to share various information (i.e. product traceability, manufacturing site addresses, etc…).