How biotech companies can reduce supply chain risk?

Filed in archive Point of view on June 26, 2009

I don't think I have written any post on biotech supply chain management in this blog (at least I don't remember any), but seeing this nice piece in ICIS website became a motivation to write one.

The author of this article which is titled "Biotechs can reduce supply chain risk" have focused a lot on the procurement side of the supply chain management in biotech industry and have highlighted the fact that in many cases, disruptions of one key material leads to the whole production line being shut down (the same as many other sectors:)).

What was interesting for me was their use of FMEA (Failure Mode and Effect Analysis) which is very established method in quality management to reduce supply chain risk. The interesting point in FMEA is that it also considers detection risk - the risk of not finding out about a failure.

There are four steps in a FMEA, according to the authors and quality management references:

- Consider all ways that a particular material can cause disruption in your supply chain.
- Link the failure with possible root causes.
- Determine the impact on your organization of each type of event. Look at the impact in terms of severity, probability of occurrence, and detection risk.
- Determine the risk factors for analysis.

Of course prioritization of the risks and craft mitigation and elimination plans for the more serious risks comes after going through these steps.

What other methods in QM can be used in supply chain management? What do you think?