Embed an advanced operating model for a sustainable supply chain
Operating models based on technology, process re-engineering, and advanced organizational structures, such as shared or global business services, process outsourcing — can help firms solve complex challenges. These operating models can deliver intelligent risk operations that routinely evaluate and respond to a company's ethical standards and practices — cost effectively and at scale. With our help, the pharmaceutical firm pursued this approach to fundamentally transform its TRPM strategy.
Assessing suppliers in a standard way
Genpact's first task was to define a single, rigorous risk assessment: an end-to-end diagnostic process for evaluating supplier risk, which included supplier segmentation and prioritization. The process involves risk assessment of suppliers and sub-suppliers, due diligence, and audit and reassessment. It also benchmarks any existing processes against industry standards, and anything that's not ideal goes in a plan for optimizing procurement.
The outcome was an increase in the procurement team's capacity.
Once we'd managed the vital supplier risk assessments, the company expanded the process to its other third-party risks.
A multifaceted assessment
The company's procurement team is responsible for sourcing all materials and services for operations and R&D from a global supplier base. Genpact assesses vendors across the entire supply network to determine if they meet the firm's ethical standards. Then we monitor compliance and provide risk mitigation where necessary. These vital functions serve to protect the firm's reputation and — more importantly — safeguard the health of patients who use its medicines.
We conduct this comprehensive, third-party risk management in five languages, which includes a five-part review process:
- Risk assessment
- Due diligence
- Monitoring and support
- Governance and continuous improvement
We decoupled functions in a smart way, made more sophisticated use of metrics, added data-driven process management, and rolled out a specialized organizational design. The result is consistent quality at lower costs and superior scale.
If, during the initial assessment, a supplier appears to pose certain risks, software provides the due diligence process. It asks questions on policies and practices, and the supplier must upload supporting information or evidence to validate the answers. We manage both the tool's technical support and reporting.
We also conduct our own research on suppliers, accessing financial documents, news reports, and other publicly available information from the web and social media channels. We evaluate suppliers to ensure appropriate policies are in place for:
- Anti-bribery and corruption
- Conflict of interest
- Data privacy
- Employment practices
- Fair trade and competition
- Product security
- Product communication
- Research and development ethics
- Health, safety, and environmental principles
Once the company is confident that suppliers represent no undue risk to its reputation, these suppliers sign a contract that documents agreed-upon principles of responsible procurement. Contracts also cover any specific risks the company wants to mitigate.
Monitoring and support ensures the suppliers maintain these ethical standards — and we routinely measure their performance against key indicators. If the suppliers slip up, we prescribe corrective action and check they're taking it, using scheduled and unscheduled on-site audits of one to four days.