“Supply chains are in a constant state of flux, but things are a lot harder to predict now that politics is becoming an important factor.”


Susanne Hundsbæk-Pedersen, Novo Nordisk: “We want to be able to guarantee the availability of our life- saving drugs in 170 countries.”


Kasper Thomsen, Novo Nordisk: “We sometimes start manufacturing in one country and then relocate to another country when we get per- mission there.”


sted for doing business with disfavoured countries. In this case, there is a ban on the re-export of certain products contai- ning Chinese technology. Van der Putten expects that China will increasingly take a similar approach, and an export control bill has already been proposed. “Compa- nies should perhaps start thinking about measures to reduce their dependence on China or the USA. They would be wise to increase their agility to make it easier to adapt their supply chains to changing circumstances. Should they also hire poli- tical analysts? Well, that’s a little extreme, but they should keep a closer eye on political developments and the potential effects on their supply chains, and include this in their scenario analysis. That might not be such a problem for big multinati- onals, but it is for internationally active SMEs. The government and industry associations can play a role in supporting them.”


Permission to manufacture


In order to stay agile in these uncertain and unpredictable times, more and more companies are developing in-house exper- tise in supply chain network design. One such company is Novo Nordisk, a health- care company specialized in diabetes care.


Benno Waterman, Heineken: “The outcome of Brexit remains unclear, but analysing various scenarios helps us to avoid surprises.”


Michiel Schepers, Heineken: “We’re increasingly opting for a network that is the most robust in every scenario and presents the least risk.”


“The primary reason is that we want to be able to guarantee the availability of our life-saving drugs in 170 countries. The secondary reason is efficiency; we want to achieve that high level of availability as efficiently as possible. The large number of constraints makes network optimiza- tion extremely complex. In the past we used to have to bring in consultants, but we now have our own analysts and our own platform based on Llamasoft soft- ware,” says Susanne Hundsbæk-Pedersen, Senior Vice President Devices & Supply Chain Management at Novo Nordisk. It is particularly difficult to decide on the optimum design for the supply chain net- work when introducing new products. “Our company often spends many years on research and development before a drug is market-ready. As the Supply Chain department, we don’t become involved until it’s clear that the drug has a chance of success,” explains Hundsbæk-Peder- sen. Her


colleague Kasper Thomsen,


Head of Supply Chain Design & Analy- tics, adds: “The rules for each medication vary from one country to another. In the EU, for example, it’s relatively easy to get permission to start manufacturing – usu- ally within six months – but it can some- times take three, four or even five years


in other markets. That can mean that we start manufacturing in one country and then relocate to another country as soon as we get permission there. We take those kinds of constraints into account in our own network models.” Novo Nordisk continuously reviews


its


supply chains once they are in place. Thomsen mentions stress tests, for exam- ple: “What if the demand for a product should suddenly rise by 10% in one of the markets? What would happen to the inventory levels then? How would that impact the shelf life? Would we need to increase our safety stocks? We’ve included a million constraints in our model so we can analyse the robustness of our supply chains.”


Temperature


Supply chain network design starts with gathering, analysing and comparing data. What has been happening, and why? Using techniques such as machine learn- ing it is possible to predict future scena- rios – what could happen? “The next ques- tion is what the ideal scenario would be. The challenge is to transform the data into information, and the


information into


action,” states Thomsen. He illustrates his point with an example relating to product


21


SUPPLY CHAIN MOVEMENT, No.31, Q4 2018


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