Supply Chain Resilience and Distribution Success

In Partnership With: AmerisourceBergen

AmerisourceBergen was able to successfully respond to the unprecedented challenges of the past year because of years of investment in distribution and inventory management, according to executives at the company.

As the company has built efficiencies and scale, it has also built confidence in a flexible, reliable network, said Jan Burkett, senior vice president of global specialty branded and consumer products at AmerisourceBergen. In speaking with Fierce Pharma, Burkett added that it’s been tremendously satisfying to be part of the solution during the COVID-19 pandemic.

Erin Horvath, president of distribution services at AmerisourceBergen, said by implementing a fair-share allocation approach, customers had what they needed and stockpiling was avoided.

Through robust analytics, the company could protect inventory on behalf of the entire customer base, and rapidly deliver to communities that needed it the most.

Hear more from Burkett and Horvath in their interview with Fierce Pharma. After watching, if you’re looking for more information, visit https://www.amerisourcebergen.com.

 


Rebecca Willumson: Hello everyone. I'm Rebecca Willumson. I'm the publisher of Fierce Pharma. And I'm here today with Erin Horvath, President of Distribution Services at AmerisourceBergen, and Jan Burkett, Senior Vice President of Global Specialty Branded and Consumer Products at AmerisourceBergen. Thank you both for joining me today.

Rebecca Willumson: Today, we're going to be talking about how the distribution industry has responded to the challenges of the pandemic and how you're preparing for what's next in the fight against COVID. So, Erin, I want to start with you. How has AmerisourceBergen's distribution network adjusted and met the unprecedented demands of the COVID-19 pandemic?

Erin Horvath: Sure, thanks Rebecca. Our distribution centers and our distribution center associates have been extremely nimble over the last seven, eight months. And so maybe what I'd like to do is talk a little bit about our associates. And with respect to our associates, we really wanted to make sure that we infused the safety protocols that were widely talked about in the media. So I'll be, double down into that a little bit more.

Erin Horvath: So with our IT organization, we developed an app, a mobile app, where associates would have to answer the health questions. And then in addition to that, we introduced temperature scanning devices for our associates, in which when the associate comes in for work, they answer the health questions. They then get their temperature taken and then that will discern whether or not they can walk into the building or not.

Erin Horvath: And then of course, you would imagine, right, we are mandating the use of masks in our distribution centers, and we did that day one, and we have not stepped away from that. Because again, as we've gotten smarter about the guidance with the help of the CDC, we know that that's really important. So ensuring the safety of our associates has been paramount.

Erin Horvath: Then if we think about the distribution centers themselves, we want to make sure that those environments are safe. So we've implemented deep cleaning procedures on a very regular basis. We have our own protocols and then we also enlist the help of third-party services with deep cleaning techniques. We've also instituted plexiglass barriers inside of our break rooms and things like that, so that our associates are socially distanced.

Erin Horvath: And then of course, making sure that we are separating our shifts and minimizing staffing that would happen to be in the area at the same time. So those are just some examples of the things that we're doing at our distribution centers. And then if we shift into talking about inventory and adjustments we've made around our inventory, we have been keeping close to, whether it's the Johns Hopkins data, to understand where are the hotspots, how do we make sure that we partner with the government agencies and others to make sure we're getting inventory, and most specifically, our customers, inventory in the right places?

Erin Horvath: And then, we've also implemented a fair share allocation methodology and approach to ensure that we protect the inventory from, I'll say, stockpiling by customers, right, to ensure that they have the right product, the right amount of product. We really want to ensure that product is available for those hotspots, for the communities that need them the most. And this was something that we did very early on.

Erin Horvath: If you think about the state of affairs in New York, right, and really making sure we're protecting that inventory on behalf of our entire customer base, but who were specifically to the hotspots. And then we developed robust analytics capabilities to ensure we could quickly get product into those hot zones. So Rebecca, those are some of the things that we've done to ensure that we're protecting, not only our associates, the distribution centers, but also inventory to ensure that it's available.

Erin Horvath: So I'd like to maybe also give you a context for our distribution network. And in the United States, we have a network of 30 distribution centers across the United States. And over the last several years, we've invested hundreds of millions of dollars in the resiliency of our network to ensure that in extreme events, that we're able to maintain that resiliency. And those investments have been proven to be very wise investments. Because as you can imagine, resiliency is a key word now through the pandemic.

Erin Horvath: What happens is we want to have flexibility in our distribution network. If for some reason we need to adjust in our distribution network, a spike in demand, or for some reason, we might need to close a distribution center for a temporary short period of time. Our systems and our network gives us the flexibility to move that inventory or those order lines across the network. And honestly, Rebecca, that was something we had to do. And it was, I won't say it was flawless, but it was very close to flawless in terms of our ability to move those orders across the network.

Erin Horvath: I'll use the example of the earthquake in Salt Lake City, in the peak of the pandemic. And so, we had to move order lines and we assured that our customers in Salt Lake City weren't disrupted by that. So you've got the need from the pandemic, you also have natural disasters that call for that need. And that business continuity planning really came in to serve us well. And we made some tweaks for the pandemic, but we have those ongoing plans, which again has served us very well.

Erin Horvath: And then Rebecca, I'd like to maybe hit again on the associate piece. I spoke a little bit at the beginning about our associates in the distribution centers and the protocols we used. I'd like to take a moment and talk a little bit about our office based associates. We immediately moved our office based associates to home, to working from home, as most companies did. And so it was through the hard work of our IT department to equip our office space associates with laptops and everything that they need to ensure that they are productive at home.

Erin Horvath: And the customer service organization and team are great example of that. We didn't want them to skip a beat. We wanted them to feel comfortable servicing customers and taking calls. Thank Goodness we had the telephony systems already in place that facilitated that, but we wanted to ensure our associates felt comfortable operating in their home, servicing customers on an uninterrupted way. And of course, there are many other, thousands of AmerisourceBergen associates that are working from home today in an uninterrupted way. And we were able to make that transition seamlessly and at very short notice.

Rebecca Willumson: Talk to me about how AmerisourceBergen is working with government agencies and other organizations to strengthen the resilience of the supply chain?

Erin Horvath: Sure, absolutely. Collaboration has been paramount with government agencies and third parties. So since the very early stages, we've been partnering with FEMA, Health and Human Services, the Department of Defense, the Center for Disease Control. We have become their trusted partner in this and we haven't done it alone.

Erin Horvath: We have been leveraging our relationship with Healthcare Ready. I'm actually on the board of Healthcare Ready. And we have a very strong partnership with them that started, our relationship started with them around disaster preparedness and response. Think of the wildfires, the hurricanes, that is how our partnership has forged. And it is now translated into the pandemic and there, what they do is partner the private sector and the public sector together to ensure communities can be served. So they have really taken on a leadership role in bringing the public and private sector industry together.

Erin Horvath: And what I have found extremely valuable about that is the government has really brought a listening mindset to these conversations. And it's not only us as distributors or AmerisourceBergen, but it's also manufacturers, it's customers like the hospitals and coming together collectively, representing the voice of the private industry to inform the government agencies because they recognize, we're very close. We have a very robust healthcare supply chain that's very trusted, and honestly we can get there faster.

Erin Horvath: And the government respects that, they understand we do this every day. We can help propel and accelerate the ability to execute whatever they want to do in a very positive way. And so I've seen that for the first time. Historically, maybe some of our relationships were a little slow, maybe in communication. There was a little bit of, hey, we could do this better and they really have leaned into, how to partner with the private sector.

Erin Horvath: And also I would say, I would like to underscore this trusted relationship. We've been able to provide them data and analytics to help them make informed decisions as they're building their own analytical capability. And so we really have earned the trust to execute upon COVID therapies. It's been great. We've earned the trust of the government and also manufacturers to deliver these products first to market, in a very expedited way.

Erin Horvath: And then Rebecca, what comes with that, of course, are not only the COVID therapies, but also the vaccines. And we are ready to help in partnership with our counterparts in the wholesale distribution industry, but also advocating on behalf of our customers and ensuring they get access and not only access, but the speed of execution, so that they can treat patients. Because at the end of the day, it's all about treating patients in the communities in which they live, in an expedited way.

Rebecca Willumson: I want to look back at the last several months. What are you most proud of in terms of how your network has shown up during this really difficult time?

Erin Horvath: I'm most proud of our associates. They have been committed to us. They've been committed to, when I say us AmerisourceBergen, but they've been committed to the communities in which they live, right. AmerisourceBergen, we're a purpose driven organization. Our purpose is we are United in our responsibility to create healthier futures. And that is something we take to heart. We operate with a patient mindset. We know when we touch a product, that there's a patient on the other end of that product. And we take that very seriously, pre-pandemic and even more post pandemic.

Erin Horvath: And I just would like to say, thank you to our associates, not only in the distribution centers, but also in the customer service area, to really ensure we're helping patients when they need us the most. And I'm incredibly proud of them and the work that we've done. It's because of those distribution center heroes that we've been able to commit to an uninterrupted pharmaceutical supply chain, just incredibly proud.

Erin Horvath: Our associates, when they go home, they turn on the TV just like you and I do. And they see these COVID therapies and these products that are needed in the communities. And they touch that product that very same day that they're seeing it on TV and they feel this incredible sense of pride. We all feel this incredible sense of pride of how we're helping keep community safe and getting that product to where it's needed most. So we're just really incredibly proud, Rebecca, in the work that we do.

Rebecca Willumson: That's great. That's a wonderful message. I love hearing it. Now I'd like to move things over to Jan.  Jan, AmerisourceBergen is involved with getting several of the COVID-19 treatments out to sites of care, which is remarkable. What lessons has your team learned through that experience?

Jan Burkett: First I would say, as we've built the efficiencies and the scale, we've also built confidence and that's been tremendously gratifying, but we're extremely proud of the fact that we've been a part of the solution and that the government and manufacturers have chosen AmerisourceBergen to supply these products to the patients who need it in this COVID 19 pandemic. And the pandemic has really demonstrated, I think, to our partners, as well as the industry, that our scale, our efficiencies and our ability to innovate have really brought to the forefront, our partnerships with our manufacturers and the capabilities we have to continue to support them in these endeavors.

Jan Burkett: And a part of that, and something that's really important is dialogue. So that continued open communication, the continued collaboration that we've had, not only with our manufacturers and the manufacturers that we're currently working with on, with their current treatments, but also those that have products in the pipeline and potential EUA. We talk to them on a daily basis and we're continuing to collaborate and learn. And that's given us a tremendous ability to be innovative and flexible. And we couldn't do that if we weren't [inaudible 00:15:01] closely with them on a daily basis.

Jan Burkett: And the ability to learn as we go, has really given us a pathway to new technologies, the ability to enhance our data sharing capabilities with both the government and the manufacturers, as we continue to learn really as an industry on how to tackle, be flexible and be innovative in this pandemic. And the ability to take those learnings and apply them in the future, to future product launches, to future manufacturer requirements or their needs and their need for us to bring new solutions to them has been really gratifying. And the fact that we can stand shoulder to shoulder with them and continue that dialogue has been really fantastic.

Jan Burkett: And I guess I would also say that our ability to be efficient and more innovative and quickly bring these products to market has really benefited the country as well. And the patients the end of the day who really need these COVID therapies, just being part of that solution has been tremendous.

Rebecca Willumson: And are you planning for eventual vaccines to come to market?

Jan Burkett: We are, and I would say that successful vaccine strategy is really highly dependent on the health care ecosystem. That being said, the first thing I'd like to do is just acknowledge the tremendous amount of work that's happened in the life sciences in such a short period of time. If you think about the dedication, the time and the expense that that process has been through in order to bring these vaccines to market so quickly, it's nothing short of amazing. And I believe by the time that this airs, that there'll be at least two vaccines on the market that will be available and ready for the public.

Jan Burkett: So the CDC has made the decision to work with the central distributor. And although we've been extremely busy supporting the COVID-19 therapies and those EUA products, we've also been working for months with our customers, our community, and independent pharmacies getting ready for the vaccine and getting ready for those customers or those pharmacies will be part of the solution.

Jan Burkett: So the CDC will be working during that phase one, ensuring that who they've defined as healthcare workers, patients that are more vulnerable will be able get that vaccine. And as a vaccine becomes more readily available and supply becomes available, we're going to be ready to support our customers and our pharmacies to ensure that any patient who needs a vaccine can get a vaccine. And if you think about the scale of a vaccine like this, to potentially anyone in the United States who needs it, the supply chain dedication and collaboration is extremely important in that whole healthcare ecosystem. And we're really excited to be a part of that.

Rebecca Willumson: In closing, what should manufacturers be thinking about if they bring a drug to market during this pandemic and beyond?

Jan Burkett: Rebecca, thank you for asking that question as a closeout, because it's really about collaboration, collaboration, collaboration. Our manufacturers really rely on partners like us to help them bring products to market. And in general, they are planning these things 24 months or more in advance. And during this COVID time, with these COVID therapies, we've been able to collapse that to 45 days or less. So we've learned a tremendous amount and we've worked close with our manufacturers to scale up and apply those learnings to be more nimble, more flexible and deliver product more quickly.

Jan Burkett: So I would say that continuing that dialogue beyond COVID-19, as we get through this pandemic, has been extremely important. And with our manufacturers being partners with us and feeling comfortable and confident in our capabilities to continue to have those conversations has been extremely important and we're really proud of that. And with every EUA product, we've learned more and more, and we've been able to take those learnings, create innovation and best practices that we'll take and apply beyond where we are today with these therapies.

Jan Burkett: And in a post-COVID world that we're all really anxious to get to, we'll be able to take everything that we've learned and apply it in new ways and come up with new ideas along with our manufacturers, really standing shoulder to shoulder, as we continue to deliver healthcare and product to patients who need it.

Rebecca Willumson: All right. Well, that's all the questions that I have. Thanks so much to you both for joining me today.

Jan Burkett: Thank you.

Erin Horvath: Thanks, Rebecca.