A month into 2022 and the global supply chain issues that were around in 2021 have not diminished – quite the opposite. The current wave of Omicron has exposed weaknesses in the global cell therapy supply chain beyond what we saw last year.
What does this translate to for cell therapy developers who rely on supply chain to run their clinical trials or to initiate commercialization efforts? In short, (even) longer lead times globally. Developers are not only experiencing primary supplier issues, but secondary supplier issues as Tier II suppliers are affected as well.
While there is no silver bullet to fix the ongoing global challenges, taking a proactive approach to your supply chain management can help alleviate some of the pressure.
These are the top five things that cell therapy supply chain professionals should focus on in 2022:
1. Stay informed on what’s happening with your raw materials
Knowing the demand-pull information of raw material and commodity prices will allow you to become more proactive to changes in supply as new global economic trends emerge.
For example, most cell therapy manufacturing processes rely heavily on single-use sets to complete production for each patient. Platinum-cured silicon is heavily relied on for these sets because of its compatibility with the reagents used in cell therapy.
But unfortunately, platinum-cured silicon is currently under heavy constraints due to both primary and secondary supplier issues. Ultimately, this means that all silicon tubing that is used in cell therapy is under heavy constraint with significantly longer lead times and price increases. Knowing the demand-pull of platinum-cured silicon can help you be proactive in your single-use set supply chain and plan accordingly.
2. Link raw material notifications to your ERP system
Gain real-time visibility to help with your planning by linking what’s happening with your raw materials to your master material scheduling in your enterprise resource planning (ERP).
For example, subscribe to sites that can update you on raw material trends and employ a flag on crucial components in your ERP that can be turned on if you receive notifications of a raw material constraint.
With more visibility at your fingertips, your forecasting, planning and scheduling becomes more proactive than reactive. Most ERPs have this capability, but it is rarely used to its full extent. By linking notifications to your ERP you can get ahead of what’s happening in the market and pivot more quickly to support your supply chain.
3. Strengthen your supplier relationship
One of the things that COVID has highlighted is that supplier relationships don’t have enough transparency in them, which often leaves buyers feeling frustrated. Good relationships with your strongest suppliers deliver opportunities for improvement, optimal price and good service. But most importantly, having a high degree of transparency will help resolve supply chain constraints quickly.
The best place to address and cover transparency is in your master services agreement (MSA). The MSA needs to work for both parties – not just for you as the client. Both companies should be philosophically and strategically aligned to ensure a better strategic supply relationship.
Standard supply chain practice is to have an MSA and quality agreements in place with forecasting and review meetings. The key to a good supplier relationship is to have suppliers proactively come to the table with the reason supply can’t be delivered, rather than just give an update at the forecast meeting. At that stage it’s often too late to meet your requirements as the corrective action is just to increase the lead time.
In strong and transparent supplier relationships the supplier should be comfortable enough with you to come with alternative solutions – rather than just increasing the lead time. In effect, the new dimension of supplier relationships is that suppliers can be transparent and forthcoming with any issues and get the response from the buyer in advance of any supply constraint – thus enabling pivoting, as needed, to mitigate risk.
4. Have clearly defined supply chain needs
One of the most common mistakes in global supply chain is that the actual needs of the business are not defined properly. What is the criticality of the different items that are supplied to the business? Which items are crucial to have to avoid shutting down your manufacturing? For example, a missing 30-cent item could shut down your multi-million-dollar production.
When there is a supply chain constraint, poorly defined business and supply chain needs can lead to too much finger pointing rather than focusing on the needs of the business and the resolution. Ultimately, when there’s a supply issue, the business should think of what we should, as a collective team, do to mitigate this.
You can’t control what’s happening on the other side of the world in global supply chain, but what you can control is mapping your business requirements properly, communicating that clearly and having the strategic relationships in place to meet your supply chain needs.
5. Supply chain is a team sport
Supply chain circumstances change quickly, causing high highs and low lows. When the pressure is on, keep in mind that what’s creating the problem is usually not the person in procurement, supply chain or logistics. Often supply chain staff have no control over what has occurred. They also can’t read your mind about the criticality of the issue or what they can do to help.
Supply chain leaders need to lead the drive for solutions with suppliers so that fast decisions can be reached. If the supply chain staff know that the call will be collaborative – even when there is a large problem to solve – you’re going to get the result that you need.
Buckle up for a wild ride
In 2022, we are faced with global factors that we will not be able to control. What we can do is build better and more transparent supplier relationships and apply some intelligence to the long lead time issues we are going to face. Better planning must include looking at options to do supply more intelligently and being able to identify risks and pivot accordingly.
Last year, there seemed to be enough of a stockpile of raw materials around to support a lot of the additional work that emerged because of COVID. But now, in January 2022, we are starting to see 16-30 weeks standard lead times – up from 4-8 weeks. These longer lead times are not looking like they will shorten until the end of 2022. So, buckle up, it’s going to be a wild supply chain ride!
Travis is Head of Operations at Invetech. He has close to 20 years of international supply chain experience delivering consistent high performance within organizations locally and globally. Travis’s experience spans end-to-end supply chain, policy development and implementation as well as international air freight and sea freight, cold chain, warehousing, logistics, global manufacturing, planning and forecasting. Prior to joining Invetech, Travis was the supply chain operations manager for Convatec.