Stefano Novaresi’s Supply Chain Agenda, COO of Comifar

Nine questions about the topics on the supply chain agenda of a supply chain professional.

By Helen Armstrong  (Supply Chain Movement)

Comifar is the leading pharmaceutical wholesaler in Italy and part of the German Phoenix  Pharmahandel Group based in Mannheim which operates in 23 European countries. Stefano Novaresi leads operations in the Italian branch. Directly and indirectly Comifar employs more than 2,000 people, has an annual turnover of Euro 2.5 billion and has 24 distribution centres. It has around 13,000 customers over the 18,000 pharmacies in Italy and makes around 25,000 deliveries daily.

1.What is the strategy of your company: Operational excellence, product leadership or customer intimacy?

We are distributing products for others and we are an essential part of the pharma supply chain so operational excellence and service are a must. We can differentiate our service if we have excellence in operations. Speed, accuracy and efficiency while attending to customers’ needs are the most important pillars of our business. Our core activity is to provide on-time delivery from an assortment of 100,000 items which is very challenging logistically. If we deliver 15 minutes too late it can be a problem! But we deliver more than this. The delivery time is just one component of the package we deliver to the customer. Because the pharmacy sector is facing many challenges, now and in the future, it is vital for us to provide a full portfolio of services, such as marketing, training and IT. We offer these services to help our customers develop their business. Also, our relationship with pharma manufactures is a key element and it is constantly growing in importance. Hopefully all these working areas will also help us to develop our business too.

2. What is your responsibility regarding the supply chain?

I ensure that the engine runs, from top management to warehousing, procurement to logistics, technological innovation to quality, safety and security. We are organised in nine distribution territories and although our business is very local, serving a town or a village, we have to look at it from a global perspective. Up stream we negotiate with the big multinational pharmaceutical producers while downstream we are serving in most cases individual pharmacies. About 25 people report directly to me on operations, but in total I’m responsible for more than 2,000 people, 900 of which operate in the distribution network.

Motivation, training, security and safety all have to be taken into consideration. Products in our distribution centres are sensitive so people have to be well trained to understand the operating procedure and provide an accurate service to pharmacies. Our distribution centres are in reality production units – machines, conveyors, automatic dispensers, dispatchers, RF terminals, scanners, etc – which can provide preparations for the order within 20 minutes. In the biggest distribution centers we are able to process more than 1,000 boxes (containing the customer order) per hour and globally as a Group we distribute nearly one million product pieces per day. It is mostly automated but also manual. We can’t automatically pick a small packet of pills in the same way we can pick bottles of water yet all these different flows have to converge at the same time for dispatch.

Picked products also include important drugs, which sometimes have to be kept in a cooled supply chain, and for example, narcotics, that have to be delivered under a certain protocol. And we have to deal with different kinds of suppliers, not just the big pharma companies; some of them are very small and this influences the way we organize our relationship with them.

3.What are the main business challenges that drive supply chain projects at the moment?

The health care supply chain is facing worldwide a lot of challenges. Efficiency is a must. In Italy we have a national health service, not a private system, and like in many countries we are facing reviews and spending reduction. Money being directed towards the health service is reducing, but this is not in relation to the needs. The population is getting older, chronic diseases are consequently increasing and the kind of service we have to provide is expanding.

The challenge for me is to see the supply chain as a much wider and integrated area where efficiency and effectiveness must be improved. It shouldn’t simply start with the manufacturer and end with the pharmacy or the hospital; instead it should start with the medical doctor writing the prescription and end with the patient. Although we want to be efficient in the pharma supply chain we have to face the problem of compliance with the patient. We deliver drugs or medication to the pharmacy, but what can we do when the patient does not follow the prescription exactly? Probably the disease will be resolved but we are still spending more than needed. This is something you don’t normally think about in the supply chain – usually it’s just the flow of goods – but this other aspect is becoming more and more important.

4. Which challenges keep you awake at night?

Operating in this field you feel additional responsibility because we are distributing medication. Whether it’s saving life or making life less painful, every mistake can have a big impact. One mistake every 10,000 pieces might sound acceptable, but if we deliver 1 million pieces we are making a lot of mistakes. With these products we cannot afford to make mistakes therefore operational excellence – efficiency and accuracy – is imperative. Also, we have to keep our KPIs under control, some are related to internal process but others depend on the other players in the supply chain. There is a developing interdependency between stakeholders; and also stake holders which at the moment are not part of the health care supply chain but who could be in the future.

5. What do you do about these challenges?

I am vice-president of the DAFNE consortium, a B-to-B community that has developed protocols to exchange information via EDI. This is improving the efficiency of reordering and distribution of electronic information along the supply chain, such as transportation documents or confirmation of receipt, so the supply chain is faster and more accurate.

In this way we are improving the interdependency and connection between manufacturers and wholesalers in Italy. We comprise 60 manufacturers, including all the big pharmaceutical manufacturers, plus 100 wholesalers who together have a total transaction volume equal to €25,0000 billion per year.

In the last few years DAFNE has been driving new challenging projects such as collaborative logistics, electronic invoicing and tests on RFID technology to track goods. By sending more information both downstream and upstream we can reduce uncertainty in the supply chain which otherwise would lead to higher stock levels or lower service level. If, for example, a wholesaler receives information before a truck delivers and sees in advance that goods will be missing, it can organise an alternative flow from another distribution centre. Everything has to be seen in terms of the very short lead-time in which we operate to prepare and deliver the order coming from our customer. Sixty per cent of products are sent no later than 1 1/2 hours after the order is received and will be delivered to the customer within three hours.

6. Who do you like to meet for exchange of knowledge?

The supply chain in health care should be seen in a broader perspective so it is important not only to exchange opinions with the pharma manufacturers but also with people from the medical profession. When we talk to doctors about “efficiency” they immediately feel uncomfortable because their primary consideration is care of the patient. But if we have the right approach we can bring our cultures together which can be an enormous advantage to health care.

7. Which book has inspired the most and why?

I do enjoy reading and often books linked to leadership. A few notable ones are: The seven habits of highly efficient people by Stephen R. Covey; The fifth discipline by Peter Senge, in which the author discusses emotional intelligence and learning processes in an organisation; The Neurotic Organization by Kets De Vries and Miller; and Operation Rules by MIT professor David Simchi-Levi. Even the Rule of Saint Benedict composed nearly 1500 years ago, when translated for your own circumstances, contains a few golden rules; not about “traditional management“ but about human behaviour.

8. Where do you expect to be professionally in five years?

It’s always difficult to make forecasts but my desire is to have the chance to contribute to topics involving a broader perspective in the health care supply chain. Health care cannot be skipped; the well being of the people cannot be denied. Ensuring this will be a big challenge in the future.

9. What do use for an agenda?

I have eliminated my paper agenda so I use my smart phone which is aligned with my laptop. Having said that, I’m always carrying documents!