NEW YORK — Dr. Reddy’s has approached the COVID-19 pandemic with its customary patient-centric philosophy to continue supplying products as quickly as possible.

Vincent Colicchio

Vincent Colicchio, vice president of supply chain and external manufacturing for Dr. Reddy’s Laboratories North America, says the challenge was to maintain production from the company’s manufacturing sites in its home country of India in addition to its network of contract manufacturing organizations (CMOs) and contract packaging organizations (CPOs) — all of which were affected by ­COVID-19

“We needed to prevent high absenteeism rates for production staff at our production sites to maximize output,” notes Colicchio. To that end, Dr. Reddy’s ensured its manufacturing sites utilized constant sanitization procedures to maintain the health and safety of personnel. It also arranged shuttle buses to take employees back and forth to work and provided meals.

Immediate actions to ensure supply meant a critical role for outbound logistics in shipping products from plants in Hyderabad, India, to North America. These products were shipped to third-party logistics providers (3PLs) and CPOs in the U.S. Strong competition for outbound air freight carriers from India to the U.S. meant that Dr. Reddy’s prioritized and secured flights and sea shipments every week. Commercial airlines were converted to cargo freighters once commercial air travel stalled. The company’s logistics and supply chain teams met every day for several months to coordinate demand and shipment priorities.

Supply planning teams worked with global manufacturing teams, CMOs and CPOs to increase finished goods product volumes wherever applicable. Procurement teams evaluated all of the active pharmaceutical ingredients (APIs) and key starting materials (KSMs) volumes that were in stock and for those where full supplies were unavailable. Strategies were developed with partners to reinforce supplies. Dr. Reddy’s also leveraged technology for communication and business operations. This was key for aligning all the teams at all times on any given day. This was through MS teams or Zoom. Flexibility with schedules was also important. Various cross-functional teams worked 24/7 to get jobs done during the pandemic, including the launch of several new products throughout 2020, says Colicchio.

He emphasizes that the majority of Dr. Reddy’s products were in sufficient supply. The goal during the early days of the crisis was to stabilize the supply output at manufacturing sites and at the CMOs and CPOs to avoid disruptions for customers. Early on, it was apparent that a few KSMs from China were in short supply. This impacted the manufacturing of a small number of APIs and finished products. But procurement and external manufacturing teams worked closely with partners to identify the gaps and implement action plans to procure materials and eventually resume production.

“The key is to have in place a sufficient supply of APIs and raw materials to meet our production demands,” he comments. “Maintaining a high safety stock of critical APIs and other materials is imperative. Many pharma manufacturers and CMOs maintain only two to three months of API supplies and other critical materials on hand. They need to consider increasing the inventory levels to four to six months. Even though the investment is higher, the ability to meet customer requirements is critical during any supply chain disruption. This will provide companies with a competitive advantage and allow the business to ­continue.”

Because of its operational diligence throughout the pandemic, Dr. Reddy’s will be in a strong position for the duration, he adds. Its global supply chain team continues to work with external partners and internal cross-functional teams to drive manufacturing and product supply. “The outlook remains positive as we improve our capabilities and deliver value to our customers and patients. The is done through continuous focus, vigilance and maintaining the patient-centric ­approach.”

The lessons learned from the crisis are invaluable to managing supply chain and also improving it on a sustained basis, says Colicchio. “Constant communication, coordination and diligence between Dr. Reddy’s supply chain management with our internal cross-functional teams along with our many CMOs, CPOs and vendors will always drive the business. It’s critical that Dr. Reddy’s executes its materials management plan and maintains adequate safety stocks of APIs and finished goods to specific predetermined levels to avoid supply disruptions. For API suppliers, it is critical for them to maintain adequate levels of KSMs and APIs. Alignment with the 3PL is critical so product shipments can be made to the customers on time and in full.

“Dr. Reddy’s developed the outbound logistics and product supply strategy and followed the game plan consistently. It is vital to communicate (and overcommunicate) the action plans and expectations to teams so everyone is aligned. Use of technology and digital tools is invaluable when conducting business and keeping our people connected during challenging times. The technology will continue to be leveraged to add value.”