This is the output of a recent Achilles sponsored round-table on Supply Chain Risk Management at the ProcureCon Health 2013 event in Zurich - hope you find it interesting. Regards, Dan.

1. © 2013 Achilles Group Limited 1
Total Supplier Management Services
Pharmaceutical & Healthcare Sector Solutions

2. Dan Quinn
ProcureCon Healthcare, Zurich, 19th March 2013

3. © 2013 Achilles Group Limited 3
Content
• Introduction
• The round table questionnaire
• The analysis/key findings
• Indirect analysis
• Direct analysis
• Combined analysis
• Suggested strategies and tactics
• An overview of Achilles (2 minute online video)
• Pharma & Healthcare Team Contact details and links to
additional Achilles Resources

4. © 2013 Achilles Group Limited 4
Introduction
At the recent ProcureCon Healthcare event in Zurich senior level attendees at the Achilles
round table on Supply Chain Risk Management were asked to complete a simple
questionnaire indicating the greatest challenges and pain points they see in their own
Procurement and Supply organisation’s, and perhaps most importantly, how well they
believe their companies are managing these challenges.
The groups were divided into Direct and Indirect professionals and this document briefly
summarises the key findings of these questionnaires.
Thank you for your input, we hope you find the analysis interesting, please don’t hesitate
to contact us if you have any questions or would like to find out more about the Achilles
solutions.
Dan Quinn, March 2013
Sector Development Director, Achilles
About the Author: Dan is a Director with Achilles and is currently focussed on
developing new industry sectors, in particular Pharmaceutical & Healthcare, he is an
MBA and experienced procurement professional with both direct and consulting
experience across multiple sectors. Dan’s interests include linking Procurement/SCM to
corporate strategy and the economic value added (or destroyed) in particular by supply
chain and risk management activities. You can see Dan’s LinkedIn profile here.

5. © 2013 Achilles Group Limited 5
Instructions to complete the questionnaire...

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The Questionnaire...
1. Security
4%
2. Data Accuracy
15%
3. Evolving SC
11%
4. Mgt Control
16%
5. Regulations
9%
6. Supply Continuity
8%
7. Economics
7%
8. Cost Mgt
23%
9. Reputation
7%
1. Security
2. Data Accuracy
3. Evolving SC
4. Mgt Control
5. Regulations
6. Supply Continuity
7. Economics
8. Cost Mgt
9. Reputation

7. © 2013 Achilles Group Limited 7
The analysis....
There are notable differences between the Direct & Indirect functions,
key differences include:
• Direct: greater focus on continuity of supply (highest total score)
and the effects of changing industry economics
• Indirect: greater focus on supplier information accuracy, the
evolving supply chain and management control
Unsurprisingly both have a very high focus on cost management.

8. © 2013 Achilles Group Limited 8
All ‘Concern’ scores versus ‘Effectiveness in managing’......

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Themes....
Analysis of the responses divides the issues into
Four clear “zones”:
1. Under Control
2. Effective Risk Management
3. Tomorrow’s Problems
4. Today’s Problems
1. Under Control – is the lowest risk area, problems here have relatively low
impact and are generally managed well.
2. Effective Risk Management – indicates where higher risks are
acknowledged and generally being managed well.
3. Tomorrow’s Problems - indicates an area recognised as having potentially
lower impact risks, but the ‘How well is your organisation managing this
issue’ score implies a lower investment in time and resources, importantly
all of these risks are dynamic and can change quickly, the under investment
could indicate risks in this zone could grow in impact (effectively moving to
the right on the chart) and threaten business economics/reputation.
4. Today’s Problems – reflects high impact risks that appear to be under
invested in and have the greatest potential threat to the businesses.
1. 2.
3. 4.

10. © 2013 Achilles Group Limited 10
Direct results split out...

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Direct areas of concern....
The Direct function appears to consider their
management of the key risks to be
predominantly below the ‘minimum effective
level’ required to mange the risk effectively
(with Supply Continuity and Reputation being
roughly at the minimum level).
Cost management is common to both functions which is a function of the similarly common
concerns around industry economics, but in the Direct function the largest concern by far is
Continuity of Supply (e.g. delay, disruption, natural disasters, supplier failure etc.), it is
perhaps surprising that this is only scored at the ‘minimum effective level’ which may indicate
sub-optimal investment in risk management. Whilst it is difficult to predict natural disasters,
good supplier information management and supply chain mapping solutions can identify
manufacturing clusters and make disaster planning and post disaster recovery quicker and
more effective, thus reducing the economic impact significantly. Supplier failure can also be
predicted with using supplier financial stability forecasting and modelling, thus identifying
failure risks in key suppliers before they happen and threaten supply.
The regulatory environment was also highlighted with gaps in management effectiveness,
this is clearly a complex and dynamic area, but again good supplier information management
can be used to manage existing accreditation and compliance and drive better visibility across
the organisation (for sourcing and risk management), but is also an effective tool to
cascade/communicate new legislative/policy/codes of conduct changes down the supply chain
and report on acceptance/compliance.

12. © 2013 Achilles Group Limited 12
Indirect results split out....

13. © 2013 Achilles Group Limited 13
Indirect areas of concern....
The Indirect function appears to consider their
management of the key risks of Cost, Continuity, and
Security to be generally well managed, with Reputation
and (the high impact) Data Accuracy hitting the borderline
of ‘Minimum Effective Level’ of how ell they consider the
organisation at managing it.
The highest impact issues that the Direct teams feel could be managed better include: Data
Accuracy – this is a common issue as typically supplier information management is the
responsibility of an over burdened Category/Buying team, who have much higher value-
adding priorities than the essentially administrative task of collating, validating and updating
supplier information. In addition, even when the task is done well it becomes out of date very
quickly and unreliable/unusable for important business decisions. Achilles provides a systemic
supplier information solution that collates, validates and monitors supplier information
dynamically , leaving the category teams to focus their time and energies in areas that deliver
business value.
Management Control – is not a dissimilar issue, if we look to the old tenant ‘What gets
measured, gets managed’ its weakness is that its almost impossible to measure (and thus
manage) without visibility, Achilles provides supply chain visibility across sibling companies,
geographies, business units, categories and even across sectors, and increasingly down
supply chain tiers – with this visibility comes an increased sphere of influence and provides
opportunities for volume aggregation, risk management and contract compliance. The
Evolving Supply Chain was also highlighted as a risk, supplier information management can
also be helpful in identifying, qualifying and risk assessing new suppliers when seeking new
sources of supply in new markets, products, geographies etc.

14. © 2013 Achilles Group Limited 14
Suggested Strategies & Tactics......
Pro-Active Risk Management
• Systematic approach to risk management
• Continual risk scanning for early warnings
• Ensure information updated and accurate
• Maintain visibility & control
• Share best practice/process/systems
• Potential to manage to wards Steady State or Monitor
zones
Monitor
• Early warning system -
continual risk scanning &
forecasting for increased
severity / impact
• Leverage investment in
higher risk management
processes /systems
• Ensure up to date
information/accuracy
• Maintain visibility &
review periodically
• Manage higher potential
impact issues towards
steady state zone.
Steady State
• Continual risk scanning
• Share best practice/
processes/ systems
Priority Action
• Quantify risk impact (economic & reputational) to the company
• Invest in a process for systemic information management, including
financial health & business continuity plans (potentially include suppliers
below tier 1 who represent hidden risk)
• Segment suppliers by risk profile and customise supplier qualification
and contract management processes accordingly
• Drive improved enterprise wide visibility of good quality supplier
information to allow effective management & decision making
• Formal annual high risk assessments/audits/reporting (including on-
site) to ensure current compliance and data accuracy
• Map the supply chain to identify risk clusters & target/ incentivise
category managers (and higher tier suppliers) to formally identify,
manage & monitor risk in the supply chain
• Consider formal scenario planning techniques to identify significant
impacts and subsequent business/reputation repercussions, then
creatively plan to mitigate, eliminate, manage or transfer them.
• Manage performance to drive continual improvement
• Link to spend analysis/sourcing to unlock additional value
• Consider a pan-sector community approach to drive whole of industry
cost/risk benefits and ‘collective immunity’.

15. An Overview of Achilles

16. © 2013 Achilles Group Limited 16
Achilles Overview.....
“Partnering with
Achilles is a key
element of ABB’s
Global strategy, in
simplifying and
improving our
supplier
qualification
process.”
Nils Tengberg
Head of Quality and Supply
Base Management
“Shell values its
relationships with
suppliers. With
Achilles’ assistance
we will maintain a
single source of
supplier
information. This
intelligence and
insight into our
supply base will
enable us to
continue to form
and maintain
strong relationships
with our suppliers.”
Jim Pearson, Shell CP
Systems & Processes
Manager
Click the Achilles Logo to run the 2
minute Achilles Explainer Video
(Requires internet connection & sound)

17. © 2013 Achilles Group Limited 17
Why our customers use Achilles solutions…
Risk Management
Cost Reduction
Rationalisation of
Supply Chain
Standardisation &
Improvement
Regulatory Compliance
To raise industry
standards
Better Decision
Making
Supplier Monitoring
Supply Chain Audit
Supply Chain Visibility
Supply Chain Control
(Internal & External)
Quality validated
supplier information
Manage their internal
supplier master file
…to better manage cost & risk

18. © 2013 Achilles Group Limited 18
Thank you.
Achilles.com/LinkedIn Twitter.com/Achillesltd Achilles.com/Facebook
www.achilles.com
Robert Brooks
Robert.Brooks@achilles.com
M: +44 (0)7824 138323
Dan Quinn
Dan.Quinn@achilles.com
M: +49 (0)7557 859235
Rudiger Fabian
Rudiger.Fabian@achilles.com
M: +49 (0)1712345359