Initiatives for stable supply

This page covers our approach and initiatives for stable supply.

SHIONOGI Group engages in corporate management having firmly recognizing the importance of the products that the Company supplies being directly linked to the health and lives of patients and our responsibilities as a pharmaceutical company. Reliably delivering the necessary drugs to patients, we work closely with Group companies around the world to ensure quality and safety while making every effort to ensure a stable supply of high-quality pharmaceutical products so that customers know they can rely on SHIONOGI Group medicines.

In order to ensure that the supply of products is not interrupted under any circumstances, SHIONOGI Group regularly assesses risks related to procurement from suppliers such as raw material manufacturers and manufacturing contractors, and takes measures such as promoting improvements, adding alternative suppliers, and establishing redundant procurement for high-risk suppliers. We have also set strict targets for product delivery indicators to strengthen our supply system so that we can deliver SHIONOGI products and services to patients and healthcare professionals in a stable manner.

Specifically, we analyze the risks in the procurement and manufacturing of raw materials and products while taking measures to ensure a stable supply. We are multi-sourcing suppliers and product manufacturing plants that handle raw materials for high-volume products. We also secure a certain level of inventory for raw materials and products that can only be supplied by that business partner. On the other hand, we can quickly supply even in the event of an unforeseen situation, such as a pandemic or an earthquake, and we have stipulated the response procedures.

While expanding these efforts to various business partners in the supply chain and gaining their understanding of our way of thinking, we are cooperating on and building a business continuity system so that the supply from each business partner will not be interrupted. We are working to improve the supply chain in collaboration with our business partners by ascertaining the procurement risk and taking preventive measures from the time a business partner is selected and, after the start of trading, by defining KPIs, which form a common language, and confirming the levels of their achievement.

We support the Principles set out in PSCI[*1] (whose code of conduct we require business partners to comply with) and, by complying with Japanese subcontracting law and other relevant regulations, we ensure that procurement activity is founded on honesty, fairness, equity, and transparency. At the same time, we work for sustained increase in corporate value so as to win still greater trust from our stakeholders. 

Due to the impact of the novel coronavirus (COVID-19), the supply chain has been disrupted on a global scale, and the risk of procurement and supply disruption has become apparent. Even under these circumstances having established in visual form the amount of inventory and the periods in which supplies will run out for all its products, SHIONOGI Group is fulfilling its responsibility to supply to the market without running out of stock of all SHIONOGI Group products by constantly sharing procurement and manufacturing status information with raw material suppliers and contract manufacturers.

Going forward, it will be essential to strengthen the supply chain management system in anticipation of the after COVID-19 periods. In addition to giving consideration to risk diversification through further multi-sourcing and promoting the automation of business processes by installing the systems, we will target the building of a more stable management system. We will also aim for a supply chain that is capable of

responding swiftly to any changes in the environment, such as by shortening production lead times and securing multiple means of transportation.

Since the early days of the COVID-19 outbreak, we have had in place a senior management-led Coronavirus Response Headquarters to ensure a stable supply system. We thoroughly prevented infections in plants by requiring all people who enter offices to wear masks, taking their temperatures, checking their physical condition, monitoring employees’ health, and setting standards for their return to work. We also established countermeasure procedures to prevent secondary and tertiary infections should people be infected and worked to prevent cluster outbreaks.

However, since suspending plant operational functions would be unavoidable were an infection to spread, we reduced any impact due to the halting of operations by securing more inventory than usual. By taking multiple measures while ensuring the safety of employees, we are working to further strengthen our production system, which will lead to the maintenance of a stable supply.