Reliable supply chain and procurement

Management of the material topic (GRI 3-3)

Causes of the increasing supply bottlenecks include centralised manufacturing at just a few locations in the world as well as outages and quality problems in the value chain. As a leading fully integrated healthcare provider, Galenica depends on the ability of manufacturers to deliver. As a result, the reliable procurement and supply of medicines to the population are becoming increasingly important for Galenica. The challenges posed by the COVID-19 pandemic have further reinforced the relevance of reliable procurement and a reliable supply chain. A reliable supply of medicines is crucial to the health and well-being of the Swiss population.

Scheduling system and cooperation

Galenica works closely with suppliers to ensure the greatest possible availability of medicines. As a result of coordinated processes, the suppliers provide information about possible supply bottlenecks at an early stage. An IT-based scheduling system helps Galenica optimise its procurement and logistics processes.

Responding to critical bottlenecks in good time

The logistics companies of the Galenica Group review the inventory range in the pharmaceutical sector on a daily basis, enabling them to respond in good time to bottlenecks and increased demand. If critical bottlenecks occur or there is an increased demand for specific products, as has been the case time and again due to COVID-19, logistics companies quickly change the way they work. If necessary, the delivery of non-essential products, such as cosmetics or perfumes, is temporarily discontinued in order to guarantee the supply of essential products. In addition, the amount that each customer can order is reduced to prevent stockpiling.

Evaluation of the management approach and measures

• Key figures: Key figures relating to the availability of medicines are collected on a daily basis to allow the Galenica companies to respond in good time to bottlenecks and increased demand.

Availability of medicinal products

The availability of medicines is a major global challenge and naturally also affects the Swiss market. In recent years, COVID-19 has clearly demonstrated how disruptions in global supply chains have a negative impact on local availability. This makes it all the more important that medications that are available in principle or will be available again can be delivered to service providers as quickly as possible. Here, Galenica’s logistics operations manage to make and keep over 99% of these medications available throughout Switzerland within 24 hours. The Safety Stock initiative launched at the end of 2022 was continued in the reporting year. This is a joint solution between Galexis and Sandoz to increase the safety stocks of Sandoz generic medicines for the treatment of chronic diseases in order to bridge short- and medium-term supply bottlenecks in Switzerland as effectively as possible. As part of the Safety Stock initiative, stocks at Galexis were increased by almost half a million packs.