Interview with Frank Binder, Corporate Officer & Global Head of Supply Chain Management, Santen

Navigating the Intersection of Cost Efficiency and Supply Chain Resilience: Insights from Santen’s Global Supply Chain Strategy

Update : 20th May, 2024

In an era marked by unprecedented global disruptions and evolving market dynamics, striking a delicate balance between cost efficiency and supply chain resilience remains a critical challenge for pharmaceutical companies.

At the forefront of this strategic endeavor is Santen, a leading player in the healthcare industry renowned for its innovative supply chain management approach. We had the privilege of interviewing Frank Binder, the driving force behind Santen’s global supply chain strategy, to gain insights into how the company adeptly navigates these complex waters.

The interview was carried out in collaboration with LogiPharma Asia Summit 2024 (June 19 - 20, 2024 Equarius Hotel, Singapore).

1. How do you strike a balance between cost efficiency and supply chain resilience while developing and implementing Santen’s global supply chain strategy?

The necessary condition is that our products remain commercially viable, considering all costs, in the market. If we don’t achieve that, nobody wins – the company might be forced to withdraw a product from the market, and patients lose access to it. That means we need to differentiate the measures we use to enhance resilience, by product and by market.

There’s luckily a range of strategies we can chose from: cheap ones, like increasing inventory coverage (it’s not for free though, and provides only limited extra resilience), more expensive and harder to implement ones, such as late-stage customization in a Regional DC (Distribution Centre), or finally setting up redundancy in the supply chain, which can entail high costs and implementation efforts. As said, in the end, our guiding principle is that the product needs to be commercially viable.

2. Can you share examples of strategies or initiatives you’ve implemented to minimize the impact of global disruptions on supply chain operations at Santen?

Recently, the disruption of the most important shipping lanes between Asia and Europe, the military blockage of the Bab-El Mandab strait leading to the Suez Canal, has forced us to get ready to switch from sea freight, which we had implemented for cost efficiency over the past few years, back to airfreight for those shipments that would arrive too late, considering the roughly 2 weeks additional transportation time.

We had, however, always anticipated that we might have to use airfreight for specific shipments, so we kept the airfreight lanes active in terms of procedures, pricing and other elements needed to switch immediately. Of course, we had thought we might need such agility for specific shipments, not across the board, but we made sure we could switch at any time. I believe that we have to build in such flexibility at multiple stages of our supply chain.

3. How do you adapt supply chain strategies to account for regional differences in risk exposure and response capabilities?

I consider that as of today, Western and Central Europe are regions with overall low risk of natural and man-made catastrophes, and, thanks to the European Union, low or even non-existent border hurdles (of course, important parts of Eastern Europe, by contrast, are either War Zones or highly constrained by sanctions, so this is radically different), and there we do have a fairly centralized distribution network with only few DCs and frequent road freight to our customers.

When we look at the other regions of interest to Santen outside of Japan, namely China, North- and Southeast Asia, we really have to differentiate within a region; for some areas, there are identifiable risks, while others enjoy the same low-risk environment as described above.

Generally speaking, maintaining inventory in a country is one way to lower risk exposure; and this is also a strategy that makes sense when borders impose constraints on shipments, such as customs procedures, import licences etc., as unfortunately ASEAN is not yet where the EU is today in terms of flow of pharmaceutical products across borders – but we can always hope for improvement.

4. You’ve managed teams and stakeholders across various continents and business cultures. Can you share some key lessons learned for effective cross-cultural collaboration in supply chain management?

First and foremost, listen to each other with attention and with respect, and be aware that there is no “Gold Standard” for professionalism, there is not one culture better than others for doing business. And then, with self-awareness and cultural sensitivity, try to translate your needs into a message that won’t put your counterpart off.

There is a very fine balance between being too forceful on the one side, and not being clear enough on the other side. I do tend to be on the side of clarity, even if that means that some of my messages might be controversial to some colleagues - if we don’t have clarity of intent and of purpose, communication is just a feel-good chat, but we are in business to achieve something.

And one last consideration: I’m not a native English speaker, nor are my colleagues in Asia, and in that situation, simplicity of language is key. I avoid complicated sentences and vocabulary, and that helps everybody (not least myself!).

5. Technology often plays a significant role in enhancing supply chain resilience. Can you discuss how technology and digital tools have helped in minimizing risks and increasing agility in your supply chain operations?

Generally, we are moving to systems that map our Supply chain in real time, and linking as many of our partners to them. Once we have that, modern reporting tools provide visibility, often with self-service drill-down and analysis capability. So we have set up Control towers, are using our partners systems for monitoring shipments and temperature tracking, and the next step will be to link our system to theirs. But the basic requirement is to have systems that can map our activities in real time, and this is still an area of intense work for us.

6. Looking ahead, what do you see as the key challenges and opportunities in further enhancing supply chain resilience amidst the evolving landscape of global disruptions, and how do you plan to address them?

Global and regional disruptions are not going away, we will probably never have the relative quiet of (roughly) 1990 to 2020 in our lifetime again. So we have to address these risks, along with a heightened awareness of natural risks due to climate change (eg, the Panama canal capacity being limited because of an unusual draught).

First step would then be a comprehensive risk analysis of our shipping lanes and of our sourcing countries, not just for our API, but also for key excipients and other key materials such as filters. “Nearshoring” or dual sourcing strategies, or increasing inventories (“buffer or suffer”, as my Operations Management professor used to say) come to mind as possible strategies.

Whatever we do, visibility in real time of our end-to-end supply chain as well as of key ingredients is essential, as is a well-established, open and trustful collaboration with key partners such as CMO, Logistics Service Providers or Distributors. This collaboration and the trust must be built up now, it will be too late once a crisis breaks out.

7. You are presenting in a leadership panel at this year’s LogiPharma Asia event. Can you share what the audience can expect to hear from you and what excites you about this event?

I can see that Asia increasingly takes a more important role in Pharmaceutical Supply Chains – the region is not just market for products made elsewhere, but regional manufacturing is definitely emerging. There are great success stories such as India or Singapore, but I believe there is more potential in many countries.

With its highly motivated and well educated workforce, Asia has a bright future, even more if we as Supply Chain professionals can collaborate with colleagues in commercial, regulatory, QA and other functions, but also with colleagues in partner companies, be they suppliers or logistics partners, and not least with colleagues in regulatory authorities across the region.

About Frank Binder

Corporate Officer & Global Head of Supply Chain Management, Santen

Dr. Frank Binder is Corporate Officer and Head of Global Supply Chain Management at Santen, a specialized pharmaceutical company focusing on Ophthalmics, headquartered in Japan. Frank is based in Switzerland, reporting directly into the senior leadership in Osaka. His mission is transforming Santen's Supply Chain, enabling Santen to globalize its business, from its dominant position in the Japanese market to global leadership. It is Franks priority to ensure that the Supply Chain organization delivers significant value to the company, and is recognized as a key business partner to the commercial and financial organizations.

Prior to his current role, Frank has been Head of International Supply Chain at the US Biopharma company Celgene, and has held various Supply Chain roles at Swiss Pharma companies Roche and Novartis, and at management consultancy Accenture. Thereby he's gained a broad and deep Supply Chain Management expertise, spanning production, planning, NPI, S&OP, international logistics and distribution across Europe and Asia. He is regularly invited to speak at major industry conferences in Europe, USA and Asia and enjoys contributing to the advancement of the Pharmaceutical Supply Chain practice.

Frank holds a doctorate in Physical Chemistry (Dr. phil. nat.) from University of Berne, complemented later by courses at Cranfield University and Harvard Business School. Managing teams and stakeholders across the world, and across very different business cultures, is one of his daily challenges. Frank has a multicultural background himself, and is fluent in several languages (English, French, German, Spanish), and has significant management experience in executive roles, spanning Europe, Asia and the US.

About Santen

As a specialized company dedicated to eye health, Santen aspires to contribute to the realization of "Happiness with Vision" by providing products and services to patients, consumers, and medical professionals around the world. Since its establishment, and guided by its CORE PRINCIPLE, "Tenki ni sanyo suru," Santen has been committed to helping people maintain and improve their eye health for more than 130 years. Santen is engaged in the global research and development, manufacturing, and sales and marketing of pharmaceutical products in the field of eye care, supporting the eye health of approximately 50 million people in more than 60 countries and regions worldwide. Santen's mission is to provide essential and significant value to patients and society in the prevention, diagnosis, and treatment of eye diseases through products and services created from its expertise in the ophthalmology field and from the patient's perspective. To create a future in which as many patients as possible can lead happy and fulfilling lives, Santen is committed to doing its utmost to realize a society in which people around the world can experience "Happiness with Vision." For more information, please visit Santen's website

About LogiPharma Asia

LogiPharma Asia, the world's top summit for life science supply chain leaders will take place from June 19-20, 2024, at the Equarius Hotel in Sentosa, Singapore.

This distinguished summit is uniquely positioned for global decision-makers and Asia-based supply chain leaders from world-leading pharmaceutical and life science businesses to come together to discuss winning strategies and solutions to key global challenges.

Primed to assemble over 200+ Life Science Supply Chain Leaders from both regional and international brands, the summit will encompass multiple verticals, spanning from pharmaceuticals, biotech, life sciences, and the Healthcare sector to ensure an unbiased and comprehensive view on the future of the function.

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