In the pharmaceutical industry, managing supply and inventory can mean the difference between life and death. If someone has hemophilia, multiple sclerosis, cancer, Parkinson’s disease, Crohn’s disease, or epilepsy, not having the proper medication is not an option. “It has a profound effect on people’s quality of life,” says Kaizar Lehri, director of supply chain systems at Regeneron Pharmaceuticals, a leading science and technology company that develops life-changing medicines for serious diseases.
Beginning his career as a consultant for IBM Global Services, Lehri transitioned into the pharmaceutical industry with a move to upstate New York and a role at Medeva Pharmaceuticals. In 2004, Lehri moved to UCB, where he began more detailed work in supply chain management. He credits his history in information technology for understanding that “business processes drive systems, and not the other way around.”
In his two years to date at Regeneron, Lehri has used his twenty-four years of experience in process improvement to achieve tremendous strides in increasing the efficiency of the company’s supply chain. Lehri spoke with Profile about his passion for improving supply chain processes, the challenges he is overcoming with new serialization regulations in order to help reduce counterfeiting in the pharmaceutical industry, and why collaboration has been key at Regeneron Pharmaceuticals.
When speaking about process improvement throughout your career, you’ve described it as vital to your work. Why has that been crucial thus far at Regeneron?
As a company, Regeneron is experiencing a period of extraordinary growth. Usually, a small company is very nimble, with a small, tight-knit group of people who wear many hats, get involved in multiple processes and decisions, and in case of an emergency, it is: “all hands on deck.”
As we make the transition to a mid-size company there are more people involved, there needs to be more specialization, and processes become more formal and well-defined to reinforce the informal—and inadequate—communication channels.
There’s a fine line between well-defined processes and bureaucracy. If you take it too far, then it can become a burden. As a good friend and mentor used to say: “simplify and standardize.”
In relation to process improvement then, why is demand planning essential?
One of my roles at UCB was demand planning—taking commercial forecasts for all brands and building a demand plan to drive the supply chain. The medicine we developed and manufactured made a significant difference in the patient’s quality of life and cannot be easily replaced. A drug shortage—when there are no equivalent replacements—is not an option. This makes risk optimization extremely important to protect against unforeseen hitches in the supply chain, or a larger than expected demand due to market factors.
One of the levers to manage risk is the demand planning process. It is important to segment product demand based on the volume and inherent variability, understand where a statistical forecasting system can deliver much better performance than a person, provide a forecast range so that safety stock can be held at the correct stage in the supply chain to maximize flexibility, and minimize response time. And most important of all is continuous communication with the commercial organizations to make sure that we are aware of all probable scenarios.
Can you describe your approach to process improvement considering Regeneron’s size and specialization requirements?
Before joining Regeneron, I used to rely on tools like PowerPoint and process mapping software like Visio to understand and document processes. However, these tools can make a process look deceptively simple. It is much more effective to physically draw out a current state process on a whiteboard or a whitewall, attach copies of physical forms and documents where called for, and attach photographs and diagrams where appropriate. The intricacies and inefficiencies of the process come to life, and we can have a high-quality discussion on reasons for complexity and opportunities for improvement.
With a detailed current state process, opportunities for improvement and automation are easier to identify. People may be doing the same tasks in slightly different ways. Each spreadsheet may have the same purpose, but a slightly different flavor and data may be hidden across the organization in spreadsheets, paper documents, and tribal knowledge.
At Regeneron, we mapped a similarly laid out future state process with prototypes of improved and simplified screens, reports, and analyses. From there, it was easy to transition to a requirement gathering process, whether for improving the process or implementing a technology solution.
What strategies have you implemented at Regeneron to improve supply chain management and procurement?
Two of our biggest achievements were putting together a general process improvement and implementation methodology, and the product launch process.
One of my first tasks when I came to Regeneron was to put together a product launch playbook, which was utilized for the successful launch of two products in the US last year. The goal of the playbook is to deliver these products to market within forty-eight hours after approval. It consists of a detailed checklist of activities that should be completed in sequence, decisions that should be taken, information that should be ready-at-hand, and qualifications and communication plans with external manufacturing, logistics providers, and strategic partners that should be in place. The playbook spans activities that should be initiated 1–2 months prior to filing for approval and up until 2–3 months postcommercial launch.
How are you implementing serialization at Regeneron, and what challenges are you working to overcome?
Serialization at a high level requires all pharmaceutical manufacturers to incorporate unique product identification on each salable carton. This unique identification information can be passed downstream to wholesalers, distributors, retail/hospital pharmacies, and clinics. The manufacturers are the origin of the information, which is then to be accurately passed downstream until the medicine reaches the patient. This is an industry-wide challenge that all US pharma and biotech manufacturers are working toward.
As an industry, we did not previously track products at the individual unit level. Implementing serialization involves a supply chain component in managing the labeling and packaging of serialized product with the added complexity of generating online printing and verifying, and finally aggregating the information. It also involves a product distribution component in sharing this information between manufacturers and wholesalers upon sale.
Within a year, my team implemented a validated serialization solution and serialized all commercial US products. A standard roll-out methodology is now in place for new product launches, or introduction of new contract packaging operations in the supply network. We are now working toward serialization of products launched for EU and implementing the next step of the serialization journey, which is to transfer information from manufacturer to logistics service providers and wholesalers.
How do you see your work bringing businesses and systems together?
I have deep demand and supply planning experience, and I have managed a variety of projects in manufacturing operations, planning, and distribution—including ERP implementations. The experience has given me a strong, cross-functional understanding of most business processes and a healthy skepticism of quick fixes.
It is important to understand the true problem that needs to be fixed and ensure that all the stakeholders understand the root cause. Sometimes, the answer is not complex and does not need to involve new technology. As long as the solution serves the immediate purpose and fits the long-term strategy, nothing fancier is required. People get caught up in building flashy tools and dashboards. Don’t short-change the process and lead with a predetermined solution.
Sell the solution. Knowing what the problem is and how to fix it is half the job. The other half is to sell the solution. To effectively convince or sell, it is vital to know your audience’s perspective.
How does collaboration within Regeneron factor in to process improvement?
Major process improvements or changes require collaboration. And, collaboration requires building a cross-department network. At Regeneron, we built a strong network gradually and over time, as my team successfully navigated challenges and established a strong track record.
In any project, it is necessary to understand who are the impacted stakeholders and ensure that all of them, across departments and sites, are involved. Even with decades of supply chain experience, I still, occasionally, will miss a key player, only to be caught short later. As a next step for major projects, the stakeholders should be understood in terms of pull versus stance. In other words, how much influence they have and how much they support or oppose the change. This determines the effort the team needs to expend to sell and convince. Some organizations—like quality, information technology, and system validation—are usually involved in most projects. It makes sense, in such departments, to identify strong players who become allies and go-to people.
Appropriate communication is vital. Governance structures and cadence of project meetings should be established in advance to ensure that stakeholders at all levels are kept informed and can provide assistance as required. Andpeople have their preferred medium of regular and urgent communications—phone calls, instant messages, emails, or short meetings.
As a team gains better experience and understanding, they can share their learnings, standardize their approach, and build solid relationships and trust based on past successes to create a virtuous cycle of high performance, as we have at Regeneron.