There was a huge fire in Basel, one of Switzerland’s bigger cities. It was on the news, the radio and television.
Five minutes after the news went out, Roland Seckler’s team got an email. “Hey, there is a huge fire very close to your supplier,” it said. “Please check if your supply chain will be interrupted.”
Roland runs global supply chain operations at Ypsomed. The Swiss company makes the autoinjectors and pens that big drug makers put their medicines in. Many of its parts come from a single supplier. If one goes down, there’s no backup to switch to. At the end of the chain is a patient waiting on their medicine.
The email came from Sphera, the supplier risk software Ypsomed added to its business continuity plan a few years ago. Roland calls it one of four pillars his supply chain stands on.
I spoke with Roland and Paul Grandy, a solutions engineer at Sphera, about how Ypsomed built that plan and how the software fits into it. Here’s their story.
What’s inside
Why there’s no backup supplier
I asked Roland why Ypsomed relies on single suppliers.
It starts with how its products are approved. When a drug launches, it’s registered around the world together with one Ypsomed device. “There is no other chance for filling up the drug into another device,” Roland said.
That makes Ypsomed the only supplier to every drug maker it works with. It also buys many of its own parts from one supplier. Roland said Ypsomed works with all the big pharma companies (“you know them all”) and is building capacity toward about one billion autoinjectors a year.
So Ypsomed checks new suppliers closely. Most end up in its critical supplier class, which gets audited by its pharma customers and by notified bodies, the independent organizations that certify medical devices. Its strategic purchasers still send each new supplier a risk questionnaire, checking its finances and its quality process “from A to Z,” Roland said.
Ten days to go live
Ypsomed was working to digitalize its supply chain, and the team wanted software that tracked what was happening at suppliers around the world. Sphera was on the shortlist from the start.
Paul hears the same problem from most companies he talks to. “They are finding out when the supplier wants to tell them about some type of risk or event that has happened, rather than finding out when it actually happens,” he said.
Roland ran Ypsomed’s rollout himself. His team visited another medtech company that already used Sphera, then ran a very small proof of concept with a few suppliers. Once IT signed off, Ypsomed sent Sphera the full master data file for its suppliers. Sphera was up and running ten days later, with the team trained.
Only the strategic purchasers and part of the IT team were involved. Sphera was one of the team’s first digital tools, so the harder part was habit. People had to stop relying on the notes they’d taken from suppliers. “You need to overcome, let’s say, this mindset change,” Roland said.
Paul said that to get started, Sphera needs a list of which suppliers and sites to watch, with names and addresses. Only the critical suppliers need watching. Sphera watches each supplier’s factories. Then it needs context: what each supplier provides, which operations depend on it, and how hard it would be to replace.
“The supplier data tells us where to look, but the context we’re getting helps the teams decide what to do,” he said.
From a fire in Basel to an email in five minutes
Ypsomed sends Sphera the full address of each supplier site. Anything that happens near that address gets checked by Sphera’s software and its experts, then goes to Ypsomed as an alert.
That’s how the Basel alert was triggered. The fire hit the news, and five minutes later Ypsomed had an email naming the supplier nearby. The strategic purchaser responsible for that supplier then checked what had happened and whether it would affect Ypsomed.
Paul explained what happens in those five minutes. Sphera monitors more than 500,000 news sources a day. Its AI works out which company and location a report is about, and whether they connect to a customer’s suppliers. Sphera’s risk analysts, working around the clock, then confirm the most important alerts.
Roland said one feature deserves more attention than it gets. The alerts come to you, so nobody has to open the software every day to look for trouble.
“In the morning, you check your inbox, and if there is nothing new inside of alerts, then your supplier network seems to be peaceful,” he explained.
Paul said a few people at each customer live in the platform and dig into the data. Everyone else gets a summary in their inbox, so when people change jobs, the process keeps running.
The four pillars
I asked Roland what he looks for in a business continuity plan.
He started outside the supply chain. Pay people fairly, he said, and build a good place to work. “I think this is the very beginning.”
Then he laid out what he calls his four-pillar strategy:
Share inventory and forecasts. Ypsomed shares its stock levels and forecasts with suppliers, so they can see exactly when they need to restock it.
Long-term contracts. Ypsomed keeps long-term relationships, on long-term contracts, with its key suppliers.
The right inventory policy. Automotive runs just in time, with very little stock. Roland said medtech can’t, because its customers have no second source.
A trained team, plus the software. A well-trained purchasing team, working with Sphera.
On top of that, Ypsomed keeps emergency stock. It bought some during COVID, again during the war in Ukraine, and again for the conflict in the Middle East. The stock sits outside Ypsomed’s ERP system, where nobody in manufacturing or planning can see or use it. Roland called it “the absolutely last” line of defense.
Roland said no single pillar is enough, because a disruption rarely has one cause. Inventory alone, he said, can’t make a supply chain robust.
The auditor surprise
Roland got a surprise from the auditors.
When Ypsomed showed its pharma customers’ auditors and notified bodies how it runs its supplier network, the software was the first thing they accepted. They didn’t ask how it worked. They looked at what it showed them: each supplier, how much depends on it, and whether it’s green.
“I was really impressed that software is much more accepted than human beings,” Roland said.
Seeing past tier 2
Roland said any deep look at business continuity runs into the same question: what’s happening at your supplier’s supplier?
“Normally you don’t know it,” he said.
When Ypsomed has a good relationship with a supplier, it asks, and some suppliers share. Those companies go into Sphera too. But often their names are confidential under contracts between the suppliers. “This is the normal situation,” Roland said.
“If they fail, we fail,” he said. “And it’s not that this tier 3 supplier is blamed, it’s Ypsomed which will be blamed.”
So Roland is working on it with AI. “Don’t laugh, please,” he said. “I’m one of the oldest AI students in Switzerland.”
With Ypsomed’s internal AI group, he built an agent that knows which region each supplier is in. When something happens in a region, the agent warns the team. His example was the conflict in the Middle East: raw materials from there go into making resin, even if the resin is made in Europe or North America. So the agent tells the team to check whether it could hit them.
Roland has seen how far back a shortage can start. After COVID, the big resin makers shut their plants for three months of maintenance. When they came back, there wasn’t enough resin to go around. Automotive companies bought up the medical-grade resin Ypsomed uses, at much higher prices, and Ypsomed hit a bottleneck.
Paul said the next step is mapping products as well as sites. “Knowing that two supplier sites are connected is useful, but that alone doesn’t tell you where a disruption is,” he said. Companies need to know which parts and materials flow between sites, and which of their products those end up in.
Why there’s no dollar figure on risk
I asked Roland whether he puts numbers on these decisions.
“No, because you don’t have numbers,” he said.
If Ypsomed runs out of a part and the line stops, that might cost $100,000. But if a customer runs out, it reaches the patient. “This is not negotiable,” he said. By Ypsomed’s own calculation, about $50 billion of its customers’ sales depends on its devices.
So he says the change has to come from the top: “investing in a robust supply chain, instead of hoping nothing will happen. But it will happen, tomorrow or in ten years.”
A disruption costs more than money, he said. It costs “the biggest gift a company can have, and that's reputation and trust.”
Next, Roland wants the software to warn him before a crisis hits. His test cases are China and Taiwan. “This will come tomorrow or in five years,” he said. “Friendly or unfriendly, this will come.”
Paul said more companies are thinking the same way. “It’s not just a procurement or a supply chain issue, it’s a full company issue,” he said.
Four pillars, ten years
“Knock on wood,” Roland said near the end. Ypsomed hasn’t had a supply disruption in ten years. Not during COVID, not during the war in Ukraine, not during the conflict in the Middle East.
He doesn’t credit one particular cause. The email that arrived five minutes after the Basel fire is one pillar. The shared forecasts, the long-term contracts, the stock no planner can touch, and the team that reads every alert are the others.
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