Glanbia Nutritionals, Reaching for a stronger supply chain
With decades of growth and a global reach across more than a hundred countries, Glanbia PLC is a major force in the food industry, branching into several sectors from dairy to nutritional supplements. It is also a company at the top of its game, ranked as one of the leading producers of cheese, isolate whey protein and sports nutrition products in the United States.
But even a leading business cannot grow complacent: continuous improvement is vital, and Glanbia is on a journey to make its supply chain leaner and more efficient every day.
Building a stronger supply chain in the cloud
As a way to streamline its supply chain operations and build in efficiencies, Glanbia is in the process of integrating an upgraded transportation management system (TMS) through 3PL and technology companies. Already successfully partially integrated at Glanbia’s operations, the company is now working to implement the program across its divisions nationwide.
As a cloud-based system, TMS can be accessed anywhere in the world through smartphones and tablets, allowing trucks to be routed and pickups to be requested from anywhere with an internet or LTE connection. Supplying analytics and KPIs, the program also doubles as a business intelligence suite to help Glanbia optimize its processes and create new efficiencies.
The TMS system will support the company’s SAP-designed CRM and ERP systems to provide a more holistic form of top shelf customer service, from materials suppliers to the end customer. “TMS eliminates the need to install and maintain many different facets of transportation systems,” said Andy Weisel, Procurement Center of Excellence executive at Glanbia. “It puts all the information in one source.”
Glanbia also continues to upgrade other technologies and processes, applying better SAP implementation across all business units, including business intelligence tools, spend & processes analysis, and waste removal. Glanbia uses eProcurement tools for RFIs, RFPs and eAuctions along with integrated contract databases that alert us to expiring supplier agreements. Meanwhile, the Glanbia Performance System utilizes a lean/six sigma operational excellence-based quality and performance management systems, which will outline a journey to zero losses in the future.
Searching for further efficiencies
With its transportation management system underway, Glanbia is now turning its sights to streamlining and optimizing other facets of its supply chain. “We are in the late stages of tender for our proposed supplier information management system (SIM),” said Weisel, explaining the need for Glanbia to develop a more direct portal for interface between suppliers and the company’s procurement and cross-functional teams. “We would like to further the supplier performance measurement vision of SIM by bringing together in dedicated supplier dashboards all the pertinent KPIs for that supplier. This will support our SRM efforts for our operations and for customers looking for the whole gamut of information,” he said.
From specifications and forecasts to invoice submission and order management, additional technology can optimize vital processes by allowing companies and their suppliers to have further insight into available stock and transport and the timing of orders and delivery. A more centralized and automated system can increase transparency internally and with suppliers, thus cutting down on mistakes and lost time related to material orders. Glanbia looks forward to the integration of this technology as a next step along its road to supply chain optimization.
“It’s more efficient, and it’s also a way of getting the right data in the right place at the right time,” said Weisel. That efficiency translates to savings for Glanbia, suppliers and end customers. The transparency afforded by such an implementation will also strengthen communication and synergy between Glanbia and its suppliers through analytics and performance metrics.
“The metrics keep suppliers up to date on how they’re performing against the average of all our suppliers,” said Weisel. “It allows us to segment our suppliers, and it’s also a communication portal between the supplier and Glanbia. There are no secrets—they’ll know exactly where they stand. I think it will raise expectations for the suppliers and make them better, as well as making us more efficient on invoices.”
A company coming together
As Glanbia continues to grow, it is also consolidating. In a bid to further its pursuit of efficiency, the company is integrating three B2B ingredients business units into one organization called Global Ingredients, which will have a single customer interface and standardized systems and processes
Along with this shift comes a reshaping of the organization structure for maximum effectiveness. This will see regional sales structure and a new product category management function be supported by strong centers of excellence, including procurement operations.
“As well as providing day-to-day support to our plants on the operations side, the new procurement structure will have a dedicated team that focuses on longer term solutions across product categories,” said Weisel. “We’ve done this with our vitamins and amino acids categories already, along with our transportation and packaging side, and we plan to roll it out to all indirect and direct spend. Developing sound cross-functional strategic sourcing teams will lead the business to future growth opportunities.”
Improving on an executive level
As another means to improving business practices, Glanbia is active with the Corporate Executive Board (CEB) organization in order to develop the leadership tools needed to grow leaner and keep improving.
“We are delighted with our membership of the CEB. They provide great training resources thst we have utilized this year across Glanbia,” said Weisel. As the category managers participate in different training courses, they apply what they’ve learned at a practical level for the benefit of the company.
“Our headquarters-led initiative used a “Voice of the Supplier” survey with our top 30 SAP vendors to really understand how they viewed Glanbia, which helped shape our vendor engagement and improvement plans. They also provided training and access to global best practices to apply to our businesses,” Weisel said.
“We’re looking at internal relationship management, and how procurement internally sells the value and benefit we can add to the business. Through our supplier relationship management, we continue to build strong relationships with suppliers, which leads to strategic category management and more innovation opportunities,” said Weisel. “These are just some of the areas we’re focusing on with the CEB to help Glanbia fulfill its ambition to be a global nutrition company and set truly world class practice.”
The challenges to vaccine distribution affecting everyone
While it is comforting to know that vaccines against COVID-19 are showing remarkable efficacy, the world still faces intractable challenges with vaccine distribution. Specifically, the sheer number of vaccines required and the complexity of global supply chains are sure to present problems we have neither experienced nor even imagined.
Current projections estimate that we could need 12-15 billion doses of vaccine, but the largest vaccine manufacturers produce less than half this volume in a year. To understand the scale of the problem, imagine stacking one billion pennies – you would have a stack that is 950 miles high. Now, think of that times ten. This is a massive problem that one nation can’t solve alone.
Even if we have a vaccine – can we make enough? Based on current projections, Pfizer expects to produce up to 1.3 billion doses this year. Moderna is working to expand its capacity to one billion units this year. Serum Institute of India, the world’s largest vaccine producer, is likely to produce 60% of the 3 billion doses committed by AstraZeneca, Johnson & Johnson and Sanofi. This leaves us about 7 billion doses short.
Expanding vaccine production for most regions in the world is complicated and time-consuming. Unlike many traditional manufacturing operations that can expand relatively quickly and with limited regulation, pharmaceutical production must meet current good manufacturing practice (CGMP) guidelines. So, not only does it take time to transition from R&D to commercial manufacturing, but it could also take an additional six months to achieve CGMP certification.
The problem becomes even more complex when considering the co-products required. Glass vials and syringes are just two of the most essential co-products needed to produce a vaccine. Last year, before COVID-19, global demand for glass vials was 12 billion. Even if it is safe to dispense ten doses per vial, there is certain to be significant pressure on world supply of the materials needed to package and distribute a vaccine.
It is imperative drug manufacturers and their raw material suppliers have clear visibility of production plans and raw material availability if there is any hope of optimizing scarce resources and maximising production yield.
It is widely known by now that temperature is a critical factor for the COVID-19 vaccine. Even the regions with the most developed logistics infrastructures and resources needed to support a cold-chain network are sure to struggle with distribution.
For the United States alone, State and local health agencies have determined distribution costs will exceed $8.4 billion, including $3 billion for workforce recruitment and training; $1.2 billion for cold-chain, $1 billion vaccination sites and $0.5 billion IT upgrades.
The complexity of the problem increases further when considering countries such as India that do not have cold-chain logistics networks that meet vaccine requirements. Despite India’s network of 28,000 cold-chain units, none are capable of transporting vaccines below -25°Celsius. While India’s Serum Institute has licensed to manufacture AstraZeneca’s vaccine, which can reportedly be stored in standard refrigerated environments, even a regular vaccine cold chain poses major challenges.
Furthermore, security will undoubtedly become a significant concern that global authorities must address with a coordinated solution. According to the Pharmaceutical Security Institute, theft and counterfeiting of pharmaceutical products rose nearly 70% over the past five years. As with any valuable and scarce product, counterfeits will emerge. Suppliers and producers are actively working on innovative approaches to limit black-market interference. Corning, for example, is equipping vials with black-light verification to curb counterfeiting.
Clearly, this is a global problem that will require an unprecedented level of collaboration and coordination.
Disconnected information systems
While it is unreasonable to expect every country around the world will suddenly adopt a standard technology that would provide immediate, accurate and available information for everyone, it is not unreasonable to think that we can align on a standard taxonomy that can serve as a Rosetta Stone for collaboration.
A shared view of the situation (inventory, raw materials, delivery, defects) will provide every nation with the necessary information to make life-saving decisions, such as resource pooling, stock allocations and population coverage.
By allowing one central authority, such as the World Health Organization, to organize and align global leaders to a single collaboration standard, such as GS1, and a standard sharing protocol, such as DSCSA, then every supply chain participant will have the ability to predict, plan and execute in a way that maximises global health.
Political influence and social equality
As if we don’t have enough stress and churn in today’s geopolitical environment, we must now include the challenge of “vaccine nationalism.” While this might not appear to be a supply chain problem, per se, it is a critical challenge that will hinge on supply chain capabilities.
In response to the critical supply issues the world experienced with SARS-CoV-2, the World Health Organization, Gavi, the Vaccine Alliance and the Coalition for Epidemic Preparedness Innovations (CEPI) formed Covax: a coalition dedicated to equitable distribution of 2 billion doses of approved vaccines to its 172 member countries. Covax is currently facilitating a purchasing pool and has made commitments to buy massive quantities of approved vaccines when they become available.
However, several political powerhouse countries, such as the United States and Russia, are not participating. Instead, they are striking bilateral deals with drug manufacturers – essentially, competing with the rest of the world to secure a national supply. Allocating scarce resources is never easy, but when availability could mean the difference between life and death, it becomes almost impossible.
Global production, distribution and social equality present dependent yet conflicting realities that will demand global supply chains provide complete transparency and an immutable chain of custody imperative to vaccine distribution.
The technology is available today – we just need to use it. We have the ability to track every batch, pallet, box, vile and dose along the supply chain. We have the ability to know with absolute certainty that the vaccine is approved, where and when it was manufactured, how it was handled and whether it was compromised at any point in the supply chain. Modern blockchain technologies should be applied so that every nation, institution, regulator, doctor and patient can have confidence in knowing that they are making an impact in eradicating COVID-19.