Provision of Stable Supplies
Establishment of a Stable Supply System
We have built a stable supply structure for our products, which are manufactured mainly at our own plants in Japan and also in collaboration with partners in Japan and other countries. These plants are working constantly to increase the precision of their production plans by strengthening collaboration with the Sales & Marketing Division, the International Business Management Department, overseas subsidiaries, and business partners. We have also made proactive efforts such as double sourcing of active pharmaceutical ingredients and optimizing the supply chains regarding the formulation and packaging of products. To further strengthen our competitiveness, we continuously work on cost reduction activities, as well as actively striving to increase productivity in our plants, such as by reducing lead times.
The Suzuka Plant is Sumitomo Pharma's core formulation plant, equipped with integrated pharmaceutical manufacturing facilities capable of a full range of operations from the production of active pharmaceutical ingredients to the formulation and packaging of products. It includes a state-of-the-art solid dosage formulation facility fully compliant with cGMP (the latest U.S. GMP) and supplies products globally.
The Oita Plant is Sumitomo Pharma's principal facility for the production of active pharmaceutical ingredients and its equipment is cGMP-compliant. It operates 24 hours a day, 365 days a year to ensure stable production of active pharmaceutical ingredients.
Strengthening the Global Supply Chain
To further strengthen our stable supply system, Sumitomo Pharma is working continuously to reinforce its global supply chain based on the progress of globalization, including the overseas procurement of raw materials and pharmaceutical intermediates and manufacturing at overseas plants. In order to ensure the stable and sustainable procurement of the raw materials and other items used in its products, the Company continuously and systematically promotes measures to prevent interruption of its supply of raw materials, including the use of multiple suppliers, taking alternative materials into consideration and maintaining appropriate inventories.
In fiscal 2018, accompanying the expansion of the overseas sales and territories for our mainstay products, we built a supply chain suited for global growth, including incorporating overseas subcontractors in our product manufacturing and supply framework.
In our overseas procurement, in addition to dealing speedily with problems as a matter of course, we work to prevent problems proactively and eliminate supply uncertainties by building deeper relationships of trust through smooth communication with overseas business partners and trustworthy procurement activities.
In addition, as part of its CSR-based procurement, the Company conducts fair, open and transparent transactions continuously, through such steps as concluding basic agreements on transactions with business partners, complying with relevant laws and regulations, including Japan's Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors, and evaluating business partners.
Click here to see CSR-Based Procurement for our basic approach to procurement
Responding to Changes in the Business Environment
The environment surrounding the pharmaceuticals industry in Japan is becoming increasingly challenging. This includes encouragement of the use of generic medicines and the strengthening of controls on healthcare costs, such as NHI price reductions on long-listed brands. At Sumitomo Pharma, with an expansion of overseas operations using foreign subsidiaries and partners, the supply of products destined for outside Japan is increasing. To accommodate such changes in the business environment, the Company reorganized its production sites at the end of fiscal 2018 in order to build a stable and efficient production system that can respond flexibly to swings in production volumes and maintain and improve its cost competitiveness. As a result of this reorganization, our production sites were integrated into two bases: the Suzuka Plant and the Oita Plant. Going forward, while being committed first and foremost to the safe operation of our plants to ensure the stable supply of high-quality, safe and secure products, we will continue to strive to enhance production efficiency and reduce manufacturing costs.
Strengthening the Distribution System
Sumitomo Pharma has a system in place to deliver products to our pharmaceuticals wholesalers within 48 hours of receiving an order (or within 24 hours for neighboring regions) from the Company's two distribution centers in Kobe and Saitama. Additionally, in order to maintain stable supply during emergency situations such as natural disasters, we have been working to enhance our business continuity plan (BCP). Based on our corporate GDP* Guidelines, steps are in place to assure the proper management of product quality during storage and transportation.
* Good Distribution Practice: A standard for proper distribution of pharmaceuticals.