UCB CPO Sebastien Bals sits down with Procurement Leaders’ chief product officer David Rae to share some insights into his function’s response to the ongoing polycrisis. Among other subjects, Bals reveals how the purchasing team at the Anderlecht-headquartered global pharmaceutical company has leveraged machine-learning technology to create a digital twin of its supply chain to uncover previously hidden vulnerabilities, as well as the steps buyers are taking to pre-qualify suppliers to minimise the impact of potential risk events before they happen.
Watch the full video interview or read highlights, below:
Using data-driven insights to visualise the supply base
When we were hit a couple of years back with the start of the pandemic, we immediately realised the dependency that we had deep down, and so one of the initiatives that we started early was building a true understanding of the different tiers in our supply chain, as well as making sure that we map them in a digital form. So, we are creating –and have created already for some of our key brands – a digital twin of our supply chain so we truly understand where we are buying from, how product flows are going, so we can leverage the power of AI and machine learning that is embedded in the technology to provide us with proactive insights on any potential vulnerabilities we might have.
We’re evaluating supplier financial risk, of course, but we’re also monitoring climate risk or potential disruptions that are happening by country, or the region, or even at the company that we’re operating with. Ultimately, in these types of situations, it’s speed that allows us to act. And so, the more insight we have into what is going on, it allows us to make that right judgement. That said, the biggest challenge remains going deep into your supply chain.
UCB’s changing supply chain
We have a categorisation beyond whether a supplier is strategic or not. We also look at how switchable, for example, the products that we are buying from them are. So one of the things that it’s allowing is more proactiveness, where in the past we probably would be more reactive to certain challenges or disruptions that we face, now, we try to anticipate potential changes through a sourcing governance committee.
If you take an example that is current now – such as China or Asia overall, and the dependency on that region – instead of waiting until something materialises, we already understand what some of the potential alternatives are. We start qualifying suppliers ahead of time, for example, so that our environment can be more dynamic.
Another thing we saw is that although at first sight we might seem, for example, dual-sourced on certain materials, when we look further into our supply chain, we realised that those suppliers were buying from the same sub-suppliers. So that is where we are having a much more active conversation within the organisation, and even talking to our development folks to see how we can embed risk management in the development of our product, the same with sustainability as well.
We’ve created a called supply resilience and agility programme, which consists of a number of things – from having a much more end-to-end view of our inventories and our needs in our production, planning and sales planning, and understanding how that translates from a risk perspective rather from a production point of view.
This allows us to understand the trade-offs. Sometimes we say there is no alternative available, while it might be that the alternative is simply not the most cost-efficient. It’s understanding the potential trade-offs that we might make from redesigning our supply chain.