Drug maker goes social to end supply chain crisis

Pharmaceutical company uses social collaboration to get everyone communicating

Antonio Martins
Antonio Martins, vice president, supply chain, Teva Canada

A few years ago, a Canadian pharmaceutical company found that it was in constant crisis mode, and its way out of the chaos lay in getting everyone to communicate.

The company, Ratiopharm Canada, was having a hard time being flexible enough to meet changes in demand. For example, the supply chain unit might not know for as long as four months that there had been a slowdown in production because of a manufacturing snafu or a quality control issue.

Ratiopharm found the answer was to get everyone to communicate. The generic drug manufacturer made that happen by using social collaboration tools.

"When the entire operation is stressed, it reverts to crisis mode," said Antonio Martins, who was vice president of supply chain in 2005 when he first introduced social collaboration tools at Ratiopharm. "We were in constant crisis mode. When the stress is lifted, suddenly things can be more orderly.... The entire operation becomes much more efficient."

Martins, who today is vice president of supply chain at Teva Canada, which bought Ratiopharm in 2010, said the problem stemmed from a lack of communication in the supply chain. If something went wrong anywhere in the supply chain process, it might be two to four months before the people who needed to know found out about it.

So how do you bridge such a chasm of communication? Martins turned to Web 2.0 technology and social collaboration tools, starting with Microsoft's SharePoint, then switching to tools from Strategy-Nets and later Moxie Software, which is what the company uses today.

Martins said collaboration tools fixed the communication problems employees were having, and the improvement in communication fixed Ratiopharm's supply chain problem. Addressing those issues ultimately fixed the company's service problems and eventually saved jobs and enabled the company to survive during rocky times in the pharmaceutical industry.

Martins also noted that he worked on the backbone of the supply chain, tweaking processes and systems. However, the collaboration changes were the key that enabled the company to be flexible and handle ordering and market surprises.

"If you look at a supply chain, you want it to go smoothly," Martins told Computerworld. "No problems. No delays. No snags. But that never happens. The supply chain gets interrupted many, many times because of surprises.... Any time there was a problem to stop the supply chain, like a technical problem or customers' wanting more product, any time there was a surprise, it took a long time for that information to get out. It took two to four months to find out anything was wrong. This was very, very common."

Martins explained that back around 2005, Ratiopharm was having trouble because it took so long to find out that there had been a snafu somewhere along the supply chain. For instance, if unsightly black specks from a foreign substance suddenly appeared in the ingredients used to make a batch of tablets, the manufacturing process would have to be stopped and the tainted tablets would have to be removed.

"That batch that's sitting in barrels -- we're waiting for them and we don't know something is wrong," he said. "We have to detect what's going on as soon as possible.... We didn't want the situation to go through a hierarchy because that takes too long for bosses to talk to bosses."

Martins noted that at that point, the company had started using SharePoint, so he got his employees to use the software's message board. "Individuals would post the problem and other individuals would solve the problem," he explained. "We went from it taking two to four months to find out there was a problem, to two to four weeks, and then to a few hours or a couple of days."

Before Ratiopharm started using collaboration software, the company's service level, which refers to the percentage of orders that are fulfilled on time, was around 82% to 85%. Calling that level "terrible," Martins said the company shoots for a service level of 98%.

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