Bayer HealthCare AG
SCM Germany award 2013
2013-06-17 John Koelink BHC-PS-GSCMFull year sales: €39.8 billion
111,600 employees
291 subsidiaries
R&D expenditures: €3.0 billion
Our Mission
Bayer: Science For A Better Life
•
We help patients around the world by preventing, alleviating and curing diseases as well as improving diagnosis.•
We help to ensure an ample supply of high-quality food, feed, fiber and renewable raw materials.•
We make significant contributions in the fields of energy and resource efficiency, mobility and home living – to name just a few.Bayer HealthCare
Divisions
Consumer Care Medical Care Animal Health Pharmaceuticals • Food animal products • Companion animal products • Diabetes Care: monitoring systems and accessories • Radiology & Interventional: Contrast agents, devices for diagnostic imaging and medical therapy
• Non-prescription drugs
• Vitamins and nutritional supplements
• Rx Dermatology
• General Medicine
Bayer HealthCare
Top Products
Animal Health
Pharma Consumer Care Medical Care
Our Supply Chain Management Team
Stefan Bokstaller PS AH SCM Kevin Pegels PS BT SCM Mehmet Cimit PS CC SCM Jörn Bieg Performance Management Achim Siegert-WilckeDesign & Development
Edgar Markwart
Supply Chain Execution & Master Data
Silja Salge
Caretaker
Kim Riemer
Assistant
John Koelink
Global Supply Chain management
Patrick Leonhardt
Warehousing & Distribution
Frank Brokmann PS DC SCM Thomas Panzer PS PH/API SCM Eric Ferchaw PS R&I SCM Matthias Kary PS HR Arnim Elze PS QHSE Bernd Marschmann PS Procurement Thomas Raaf PS O&I
Our SCM motto:
Performing with passion.
Engaging our people.
Result oriented thinking and acting.
Integrating with our partners.
Our achievements 2009 - 2012
•
Improved and maintained high service level•
Generated > 600 mil Euro on cash flow•
Contributed to > 15 mil Euro sustainable cost reduction through warehouse consolidation•
Established a solid IT infrastructure for managing the supply chain and tracking performance•
Reduced lead time at main supply centers with lean principles•
Established good talent management process and traineeship•
Established a solid Supply chain Masterplan for all divisions to meet their objectives•
Developing and implementing innovative concepts within the Pharma Industry•
Supplier integration•
Forward integration with customersAchieved Reductions in BHC Inventory by Main Lever Cumulated savings in m€ 67 121 134 142 38 61 76 120 21 43 61 80 17 45 46 58 19 36 45 55 60 89 111 152 0 100 200 300 400 500 600 700 2009 2010 2011 2012 Others Forecast Accuracy / Vendor Managed Inventory Raw Material Supply Planning Parameters Lead Time Reduction Safety Stocks/Pipeline management 222 395 473 607
Source: BHC Inventory Reduction Measures Tracking 2009 to 2012
Achieved BHC Improvements for Supply chain Excellence
• Total supply chain is analyzed in respect of demand, production, quality and raw material risks in cross-functional workshops with plant managers, logistics experts, quality experts and procurement.
• The individual risk of each supply chain step is derived from service level, forecast error, lead times, campaign sizes, equipment failure time, available backups, quote of rejected batches and supplier performance.
• Final safety stock levels along the supply chain are defined by a holistic approach: Allocation starts as close as possible to the market (sales affiliates) as safety stock in later stages of the supply chain can also be used for mitigation of risks in earlier stages.
Pipeline Risk Assessment
a holistic approach in order to define balanced safety stock levels
Pipeline A
Pipeline B
Pipeline C
Warehouses optimization ongoing
Warehouses reduced by >50% (2006-2012), >15 mio Euro cost
reduction (2009-2012)
Warehouse footprint development123
127
134
140
151
197
266
2011 2012ff 2008 2006 2007 2009 2010SC System Landscape
Bayer HealthCare – high level
Global APO Logistics Reporting Holding ERP
BI
(Business Intelligence)ERP
(Enterprise Resource Planning)
SCM
(Supply Chain Management)
Company BI Company ERP Bayer Masterdata
ERP / MDRS
(Master Data Reference Server)
Global SNC Vendors Vendors Vendors Vendors
50 70 90 110 130 150 170 190 210 230 250 1. 201 0 3. 201 0 5. 201 0 7. 201 0 9. 201 0 11 .20 10 1. 201 1 3. 201 1 5. 201 1 7. 201 1 9. 201 1 11 .20 11 1. 201 2 3. 201 2 5. 201 2 7. 201 2 9. 201 2 A v er age T P T in Cale n d ar d ay s
In tablets and pipettes a strong decrease of
Through Put Time with correlating inventory
reductions are visible
Inventory 2010-2012 – Mio. € 50% target Pipettes Tablets Pipettes 50% target Tablets
Throughput time 2010-2012 – Calendar days
1 2 3 4 5 6 7 8 9 101112 1 2 3 4 5 6 7
5 7,5 10
Supply Chain Talent Development
• Developed a SCM trainee program (recruitment twice a year for our Crop Science, HealthCare and internal consultancy organizations)
Already running for 3 years (Link).
• Supply Chain Academy 700 FTE´s attended courses in last 2 years
• Bi-yearly personnel conferences to talk about personnel.
Topics to discuss are next career steps, training, development centers attendance, recruitment etc..
• Partnership with University Eindhoven (European Supply Chain Forum, Netherlands). Master thesis students, sharing concepts with other industries. Partnership with Technical University of Berlin, University Berkeley and new programs with LATAM and ASIA in the make.
• Introduced short term assignments, 3-6 month in another supply center/sales affiliate to bring knowledge and to learn/understand other cultures
Supply Chain Academy
Empowering our global SCM community
along guided learning & training opportunities
We invested substantially
in harmonized processes and sophisticated systems, now we want to make the best use of them.
• 2 customized Base Modules (joint BCS/BHC) with over 700 participants since 2010, held in all regions, very competitively priced, high ratings
• In 2013, 13 tutor-based courses running 45 classes and 3 self-guided learning courses, addressing SC Planning (Calypso), KPIs, Business Intelligence and other SCM areas. Course portfolio continuously growing, further courses in development for 2014 launch.
• Distant learning courses to save travel & accommodation costs, Online material for on-demand self-guided learning,
Coaching courses to address personal work environment
• Recommended learning paths for each SCM role along skill levels • Learning portal as dedicated access point for SCM training matters
• Plus: Skill checks as system access prerequisite, full-text search in manuals, learning nuggets (“Micro-learning”), standardized learning material, raising training competence of in-house subject matter experts, sharing material through community contributions
Our HR track record 2010 - 2012
Opportunities30
Diversity
GSCM: 6 DC: 4 CC: 18 API/Pharma: 221
Short Term
Assignments
GSCM: 1 DC: 2 AH: 4 API/Pharma: 13 BT: 122
Job Rotations
GSCM: 7 API/Pharma: 9 AH: 3 CC: 346
Promotions
GSCM: 6 DC: 3 CC: 3 BT: 4 API/Pharma: 28 AH: 2Sustainability: reduction of CO
2emissions (I)
•
Global BHC CO
2footprint established for transportation based on 2011
data; in collaboration with Technical University Eindhoven
•
Used model to calculation emissions (called NTM+), has advantaged
above the current used CEFIC guidelines
•
This model is reproducible, verifiable. The ease of data collection
will improve year over year due to BHC´s ERP consolidation
program until Jan 2016
•
Main lever to reduce our global CO
2emissions is to move freight from
air to ocean resulting in:
•
Transport emission reduction of 19% (= 5% of total BHC emission)
•
Cost reduction of approx. 40% (11 million €)
BHC´s aim is to fully integrate supplier
and distributor into its supply chain
In 2012, two forward Integration Initiatives have
been initiated
Improve existing processes such as:
Increased information transparency
Automation of data exchange
Process Optimization
Improve existing material flows such as:
Transportation network
Storage locations
Structural Optimization
Utilize wholesales capabilities to provide new and additional services
Channel Optimization
Define a new Bayer Customer Service Standard, optimizing operative and administrative processes
Customer Service Optimization
Create synergies / efficiencies / benefits across BHC functions and thereby reduce transaction cost
BHC Synergy Realization
Order to Cash Pilot Mexico
Collaborative Pharma Distribution hub (CPD)
Project CPD identified mutually benefits that are
scalable to our key customers
•
Concepts to improve the Supply Chain performance • Implemented:• Aligned planning master data ( 12% less order lines) • Enhance scope of EDI (40.000 documents)
• Eliminated returns of unsalable goods (343 return processes in 2012) • Slow mover concept (270 T€ inventory savings at wholesaler)
• New payment term resulting in eliminating time based discounts • Scheduled:
• Automated re-ordering (implementation in Q2/2013)
•
Recognized challenges to the BHC approach • Local regulations and country-specific market setup• Trading vs. Service culture (organizational change management)
• Trust (Affiliates and wholesalers need time to establish trustful relationships)
Order-To-Cash Achievements Mexico
• Speak the same language with our customers
Fill Rate
• Decreased number of deliveries by 7% by consolidaton of orders and estimated potential deliveries reduction for AH in 2013 up to 50%
• Increased value per delivery by 12%
• Reduced scrapping by 1.5 Mio Eur Vs 2011
• Optimized inventories by -13.5 Mio Eur (24%)
Vs 2011
• Transparency across divisions with same KPI’s
at BHC level, all divisions talking the same language
• All BHC divisions using same reporting or system platforms (GIM, APO)
