From my conversation with Roland Seckler of Ypsomed and Paul Grandy of Sphera. Read the full case study →
Ypsomed, a Swiss company, makes the autoinjectors and pens that big drug makers put their medicines in. Each drug is registered with one Ypsomed device, so a drug maker can’t move its medicine into another device if Ypsomed runs short. Roland says Ypsomed is building capacity toward about one billion autoinjectors a year.
That makes a stockout very costly. As an example, Roland said a semi-finished part running out could cost about $100,000 while the line can’t produce. A stockout at a customer is worse because it reaches the patient. “This is not negotiable,” he says.
Roland says Ypsomed hasn’t faced a supply disruption in the last 10 years, through COVID, the war in Ukraine and the conflict in the Middle East. “Knock on wood,” he added. He puts it down to what he calls a four pillar strategy.
The four pillars
How the emergency stock works
Ypsomed bought what Roland calls emergency stock during COVID, again during the war in Ukraine, and again for the conflict in the Middle East.
Ypsomed keeps this stock outside its ERP system. Nobody in manufacturing or supply chain planning can see it or use it. “This is the absolutely last chance,” Roland says, to stop a supply chain or manufacturing interruption.
Why inventory alone isn’t enough
Roland says a disruption rarely has one cause. Usually two or three things come together. So he brings together software, inventory, customers and his team. Stock is one pillar of four.
How Roland makes the case to leadership
Roland doesn’t put a number on resilience. He says top management needs a change of mindset, toward “investing in a robust supply chain, instead of hoping nothing will happen.”
“But it will happen, tomorrow or in ten years,” he says. When a company isn’t prepared, he says, the cost goes beyond money. It costs “reputation and trust.”
The pillars also helped with auditors. When Ypsomed showed its pharma customers’ auditors and notified bodies how it runs its supplier network, the software was the first part they accepted. “A software is much more accepted than human being,” Roland says.
Before you apply this
Ypsomed’s setup fits a regulated product with no second source, where a stockout reaches a patient. Emergency stock ties up cash and needs storage, so a business with backup suppliers may need less of it. Pillars 1, 2 and 4 cost far less to start.
My notes
I’d start with pillar 1. It needs no extra stock and no new contract, only a forecast you already have and a supplier who reads it.
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