Sanofi, which has moved purposefully into high technologies to get more from its manufacturing, will lean heavily on that strategy to shrink costs and fatten margins. Using robotics, artificial intelligence and new generation manufacturing should save it half a billion euros in annual costs by 2022.
So says Sanofi CFO Jean-Baptiste Chasseloup de Chatillon who was filling in some details of new CEO Paul Hudson’s €2 billion cost-savings plan laid out Tuesday during Sanofi’s investor conference.
“It is a leapfrogging of productivity. It reduces cycle time,” Chasseloup de Chatillon said on a webcast of the conference.
And by how much. According to the company, by speeding up its plant revamps to digitized processes, it expects to reduce lead times by 6 months, while a shift to what it calls second-generation processes in vaccines and biologics will cut cycle times by 20%.
Additionally, new digital processes and AI forecasting for its supply chain is forecast to cut inventory levels by 20 days, while "optimizing" its contract suppliers will reduce the baseline costs there by 20%
Sanofi is incorporating digital processes into all of the new biologics plants that it is building but decided to retrofit its key biologics plants in Framingham, Massachusetts and Geel, Belgium to use the cutting-edge processes. It has invested more than $300 million in Framingham to retrofit it for the future.
The new operations use collaborative robots, or “cobots,” that work next to humans for some processes, and autonomous mobile robots that can travel along digital pathways to deliver ingredients and equipment. Processes in Framingham are all paperless, and its flexible facility design allows much of the same equipment to function for a variety of products.
More robots also means there is a need for fewer people. It cut 95 jobs there last year, even as the upgrades allowed for greater capacity.
Manufacturing savings is only one part of the cost-cutting puzzle. Hudson also says the company will eliminate jobs in support functions, tighten up purchasing and reduce travel.