manufacturing medicines, UCB invests in solutions designed to help patients live their best lives. “The kinds of solutions we develop are rarely available off the shelf. They often require co-development and co-design, which creates an entirely different relationship with our suppliers.” It necessitates closer working and can render shared goals, clarity of joint purpose, improved long-term planning, investment and transparency. But such interconnectedness and dependency can also present risks. When Covid struck, for instance, limited visibility deep in its supply chain meant UCB had to quickly plug knowledge gaps. Challenges are now an ever-present business reality, observes Bals, with organisations having to grapple with one crisis after another rather than experiencing any interim respite. Consequently, UCB procurement is working with supply chain and business colleagues on bolstering its resilience, reducing its exposure to risk and adopting a more consistent approach
agreements, so there was a focus on relationship management and the performance management of those engagements to ensure they delivered on the expected outputs.” UCB manages third-party spend through a centralised procurement team, with country teams that report into a global structure. The work of the department is split across a product offering including, but not limited to, sourcing and contract management, sustainability, supply market intelligence, procurement analytics, supply reliability and risk, as well as supplier relationship management. Bals says relationships with suppliers who provide direct materials tend to be more advanced, and it’s his ambition to achieve something similar on indirects. “We are more tactical in our relationships on the indirect side. Segmentation is not as structured, nor is the periodical follow-up. It is more like meeting with suppliers to maintain a good business partnership but not necessarily, working towards strategic goals and ambitions.” UCB is working with State of Flux to elevate the maturity level of its supplier management. It is exploring how it can strengthen relationships and work on certain projects with providers, so that together they might boost sustainability, innovation and resilience, and reduce risk. Since most companies spend more than 50-60% of their revenue with external parties, their overall performance as an organisation depends on how purposefully and intentionally they allocate those resources, says Bals. “For instance, if we want to help solve the climate crisis and create impact for society and on
the environment, we have to closely collaborate with our suppliers on sustainability. We need to choose the right ones; to have joint agendas and aligned goals and ambitions.” The same goes for innovation, he says. “There are teams out there within our partners who are far more advanced than we are in their thinking about the answers to the next world problems. By collaborating closely with them, you have access to ideas which you would otherwise not have. Being a customer of choice gives you preferential access to that innovation.” Collaborating effectively with suppliers in such a way that benefits both leads to new opportunities and ultimately boosts shareholder value on both sides. And procurement can generate far more value from partnerships that are objectively, rather than emotionally, driven. “We need to evolve the conversation away from being subjective. It needs to be far more factual, based on joint objectives and supported by a common roadmap and clear agreements on both sides.” He says he and his team are currently engaged in trying to raise awareness and educate internal stakeholders about this approach by leveraging best practices and examples of it within the organisation. Supply chain resilience and agility Closer working not only helps to generate positive value, it can also prevent costly problems. “Every CPO today will have risk management high on their agenda. Risk management comes from collaborating and creating transparency and trust in relationships with your suppliers. →
It enables you to have a better understanding of potential risks and to develop more concrete scenarios to mitigate them.” Operating in a regulated environment, it’s more difficult for UCB to make changes to its supplier landscape in certain categories as swiftly as those in some other sectors. With that in mind, it aims to build a supply chain that is more resilient to withstand any crisis that comes its way. “It used to be that you had a crisis, then a period of stability, then another crisis and another period of stability. Nowadays, we go from one to another. Covid challenges barely got resolved with capacities returning when inflation started to hit; then Covid struck again in China. Following the invasion of Ukraine by Russia, we’re now dealing with an energy crisis. So the time to recover after any one crisis has been significantly reduced. If your
supply chain cannot cope with these fluctuations, your overall resilience diminishes.” For this, UCB’s procurement team is evaluating a variety of options. These include looking at the geographical footprint of its supply chain; interdependencies within its supply chain; alternative sources of supply; inventory build-up, and many more. “We’ve been through a long period of globalisation that has pushed our supply chains to the extreme in search of efficiencies and cost reductions. The question we should all ask ourselves is, have we gone too far? It’s about how you redesign your supply chain, and we’re thinking about it differently now.” To ensure all these efforts are sustainable, UCB is embedding supply risk, resilience and agility into the development process of new solutions. It is also using third parties to improve
its knowledge and visibility of its supply base beyond the first tier and improve forecasting and market intelligence to increase its awareness and enable more data-driven decision making. “The agility and resilience of our supply chain have been front and centre of many of our recent conversations within UCB and with our supply base. We will continue to move it forward to manage the challenges that no doubt lie ahead.”
to supplier management. Gaining advantage and preventing problems
Bals has been with UCB for 11 years, five in his current role. Almost all of his career has been spent in procurement save for a short stint in a finance and performance management post in a shared service environment where his passion for relationship management stems. In that role, he was helping to cover IT outsource services liaising with four large vendors that were working on infrastructure, application management, networks and more. “They were lengthy outsourcing
“We want to make sure we consistently influence and ensure that UCB is spending its resources intentionally and purposefully”
NEXT STEPS AND FUTURE PLANS UCB procurement is focused on influencing the business to ensure it spends its resources “intentionally and purposefully to create value for all” – meaning its patients, staff, communities and shareholders. “It’s all the constituencies we serve. It’s allowing people living with severe diseases, their caregivers and their families to live their best lives; offering engaging careers for all UCB colleagues; contributing to the development of the communities
and minimising the impact on the environment in which we operate; as well as rewarding our shareholders.” It is concentrating on three key pillars to achieve this including establishing sustainable and resilient supply chains; digital business transformation; and achieving value in procurement beyond savings. “It’s making sure that sustainable procurement is anchored in everything that we do because a sustainable supply chain is also a resilient supply
chain. The second piece is digital business transformation. We need to leverage many more tools and technologies that are out there to further automate our traditional procurement activities. This will enable us to focus on those that cannot be, such as relationship management, internally and externally, and data- driven decision making. The final part is to anchor these in the added value procurement can provide, including revenue protection and supply enabled innovation.”
“Risk management comes from collaborating and creating transparency and trust in relationships with your suppliers”
Sébastien Bals, UCB CPO
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