GSK to Expand Supplier "Risk Mapping" in 2013

By Gareth Macdonald

- Last updated on GMT

GSK to Expand Supplier "Risk Mapping" in 2013
GSK to Expand Supplier "Risk Mapping" in 2013
GSK will conduct more audits of key suppliers in 2013 as part of a ‘risk mapping’ effort to safeguard its £9bn ($13bn) a year outsourcing spend.

The UK drugmaker plans to ask property insurance firm FM Global to assess the risk posed to 20 of its key contractors by ‘fires, explosions and natural hazards​’ this year, which is an increase on the 15 it visited last year.

GSK spokeswoman Catherine Hartley told that: “FM Global Insurer’s provide support to GSK by evaluating aspects of loss prevention with exiting suppliers.

She explained that although the results of the assessments conducted in 2012 had not prompted GSK to seek alternative suppliers or end contracts they did generate valuable feedback that was shared with contractors.

Recommendations were made on practical loss prevention solutions which helps to reduce or eliminate key exposures,”​ Hartley explained, adding that “the risk mapping considers multiple factors including product revenue dependency and if the supply is “single sourced.​”

Suppliers visited by FM Global in 2013 will include suppliers of active pharmaceutical ingredients (API), contract manufacturer organisations (CMOS) and producers of key components in product delivery devices she continued.

FM Global support is not the only way in which we seek assurance on security of supply and we also conduct audits on our more significant suppliers which look across loss prevention and other environmental, health and safety and regulatory risks​.”

Audit strategy

According to a corporate responsibility report published last month, GSK spends about £9bn ($13bn) a year on supplies and (10%) manufacturing services – 48% of which is spent in Europe, 18% in the US and 17% in Asia – and uses a risk-based approach to assess quality.

In 2012, the firm’s in-house environment, health and safety team (EHS) conducted 13 audits - eight of which were of primary raw material suppliers, two of contract formulation firms and three of API manufacturers – which is a considerable decline in the 49 visits it carried out in 2011. 

GSK said that the decline was a result of a revised audit strategy that prioritises those suppliers and contractors that are most critical to its business.

We have undertaken in-depth audits of these suppliers often involving multiple site visits and including above-site governance and risk management controls. We believe this approach is contributing to better relationships with suppliers and more significant and sustainable improvements​.”

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