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Supplier Quality

Management: Balancing

diverse needs across a

global network, which

includes responsiveness,

quality, innovation and

cost

Lisa Wyman

Executive Director, Quality

06February2018

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Unleashing the Targeted Power of Antibody Drug Conjugates

DolaLock Payload

• Controlled bystander

effect for greater

efficacy and tolerability

Fleximer® Polymer

• High DAR

• Optimal PK and

drug-like properties

Dolaflexin PlatformMersana Company Overview

Clinical stage ADC company with a highly

differentiated platform based in Cambridge, MA

Two clinical programs addressing large unmet

patient needs in oncology. Both in Phase 1 dose

escalation

HER2 Dolaflexin

NaPi2b Dolaflexin

Dolaflexin is auristatin based and designed to

overcome the efficacy and tolerability limitations

of existing ADC technologies

Strategic partnerships with Takeda and Merck

KGaA

Robust discovery effort, development of new

platforms and pipeline programs

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Key Discussion Topics

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Agenda

Industry Outlook

Rapid Growth: Challenges & Opportunities

Building a Risk Based Supplier Quality Program

Supplier Relationships: Focusing on Value Creation

Key Takeaways

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2018 Industry Outlook

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Changes in industry influence how we approach supplier quality management

Embracing changes in technology

Building an adaptable

organization

Driving Clinical innovation

Data Integrity: maximizing the value of data

Building patient trust and centricity

Building a smart, cross-

functional regulatory approach

Growing the business through

partnerships

Changing the business

landscape with new operating

models

Managing cost & pricing

We all play an important role in helping our organizations navigate these challenges

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Ensures you do not become complacent

Motivates you to become more creative

Puts the pressure on you to improve

Forces you out of your comfort zone

Do not fear competition, value its influence on you

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It’s been 40 years since an American woman won the New York City Marathon. Shalane Flanagan won in 2017, beating the three year reigning champion by 1 minute.

Optimizing your supplier quality processes, will differentiate you from competitors and get you ahead in the industry

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Rapid Growth: Challenges & Opportunities

Globalization of the Supply Chain

Risk of interruption to core business

Increased demands on

internal resources

Disparate systems & tools

Increased regulatory &

quality demands

Supplier performance is

not well understood

Cost PressuresShift in

employee’s roles and expectations

Rapid growth comes with a set of challenges for Supplier Management

Critical need to realize value throughout the supply chain

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Key Elements of a Risk Based Supplier Program

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Supplier Qualification and

Maintenance

Supplier Monitoring

Supplier Change Management

Supplier Corrective Action

Request

Risk Avoidance

Risk Mitigation

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Enabling the Organization: Culture & Capabilities

Organizational Change

Management

Shift in Mindset

Clarify Roles & Responsibilities

Realign Organizational Capabilities

Complex

Directive

Status Quo

Risk Avoidance

Simple

Judgement

Improvement

Risk Mitigation

Move

Aw

ay

Fro

m

Move T

ow

ard

s

A greater focus on culture & behaviors

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Simplify Your Suppliers: Risk Based Classification

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Category 1

• CRO’s / CMO’s

• Contract Sterilization Providers

• Contract Test Labs

• Source Plasma

Category 3

• Calibration Services

• Single-Use Finished Goods for MFG

• Product Transport (non-temperature controlled)

Category 2

• API’s and Excipients

• Storage & Distribution Centers (temperature controlled)

• Custom IT Services

• Class II Devices (non-custom)

Category 4

• Preventative Maintenance Services

• Pest Control Services

• Archival services for GMP documents

Categories are representative & illustrative, not intended to be comprehensive

SIMPLIFY ASSESS RISK PERIODICALLY EVALUATE

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Establish a Supplier Audit Program

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Audit frequency commensurate with

risk

Define a cost-efficient and effective

resourcing model

Perform initial audit for supplier qualification

Leverage quality oversight where

possible

Schedule ad-hoc audits when a trend

is observed or supplier quality problems arise

Maintain an annual audit schedule

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Risk Based Framework: Suppliers & Audit Frequency

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Onsite Audits Required for Category 1 and 2 Suppliers

Questionnaires or “Paper Audits” may be used for Category 3 and 4 Suppliers

Audit Type

Issued within 30 days of closing

Observations are classified as Critical, Major, Minor

Supplier is expected to respond in 30 days of report issuance

Supplier corrective and preventive actions are tracked to ensure quick, effective resolution

Audit Report Satisfactory = 0

Critical Observations and less than 7 Major Observations

Unsatisfactory = 1 or more Critical Observations and 7 or more Major Observations

Unsatisfactory audits require a CAPA and escalation to Quality Leadership

Maintain an Approved Supplier List (ASL)

Audit / Supplier Rating

Conducting Supplier Audits

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Define The Relationship: Quality Agreements

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Consider Regulatory Requirements

Leverage standard templates

Establish communication between parties

Quality should negotiate with Quality

Use simple and unambiguous language

Consider both legal and quality

perspectives

Define a frequency for periodic review

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Establish Supplier KPI’s or Supplier Scorecards

Understand supplier performance across the organization

Leverage KPI data to identify issues early on and inform decisions

Establish a process to manage supplier changes (SNC). Assess for impact

Establish accountability for follow up and closure of supplier corrective actions (SCAR)

Utilize KPI data to define supplier classification, audit frequency & improvement

Get to Know Your Suppliers: Metrics & Monitoring

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Data enables better decision making, continuous improvement and a fundamental understanding of end to end supply chain

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• Categories include quality, delivery, cost, and responsiveness

• Each category is weighted

• Quality category typically carries 40% to 60% of the overall supplier score weighting

Composite score for each supplier

• Lot acceptance rate

• On-time delivery

• Notification of change

• Supplier corrective action rate

• Supplier audit outcome

• Quality Agreement on-time periodic review

Examples of Supplier Monitoring Content

• Incorporate supplier index into executive level dashboards

• Continuously measure performance of supply-base

• Leverage supplier index as an input to Quality Management Review

Scorecards and Dashboards

Driving Performance: Supplier Index

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Changing the paradigm from a supplier

management program to a business

relationship approach

A business relationship consists of sharing knowledge, skills, behaviors or competencies

Link suppliers' performance to business goals while optimizing suppliers’ value through an accountable business partnership

A mutual commitment, between the sponsor and well-chosen suppliers, to be transparent, to innovate and deliver predictable results

Consider the ability of the supplier to contribute to your company’s competitive advantage: total cost of ownership reduction, risk management and value creation

Supplier Relationships: Focusing on value creation

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Identify executive sponsors

• focus on strategic leadership and relationship direction

• ensure sponsorship of team resources

• institute a top escalation point to resolve issues

Understand the business footprint

• assess and address gaps that may threaten business coverage at a local, regional, or global level

Demonstrate mutual

commitment

• ensure alignment and obligation to the business relationship

• Assess the health of the relationship through reverse evaluations by the sponsor

Formalize governance

• streamline decision making

• establish a clear pathway for escalation

Forging a Collaborative Business Relationship

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Both organizations must be committed, willing to collaborate & align common objectives

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Effective engagement is required to maintain a balanced relationship and consistent business focus

Collective Empowerment is

essential to balance the relationship and requires total team

integration while taking into account both

companies feedback, recommendations, and

solutions

Trust and Collaboration will facilitate open and

transparent conversations while

engaging all and leveraging personal

attributes

A Credible Roadmap provides a clear vision of projects and opportunities fully

aligned with both corporations’ goals

Controlled Communication must be designed to deliver consistent information and to get buy-in from

stakeholders

Added Value must be demonstrated through metrics that show the

benefits of the business relationship

Rules of Engagement: Supplier Relationships

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Supplier

Quality

Maintenance

Maintentance Audits

& Quality Agreement

Periodic Review

Change Management

(SNC)

Supplier Event Mgmt

(SCAR)

Supplier Monitoring

Supplier

Decommissioning

Supplier Qualification

• Initial Audit

• Initial Quality

Agreement

Bringing it all Together: Supplier Quality Lifecycle

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Categorizing suppliers by risk level allows companies to prioritize and expend the greatest effort toward risk mitigation and improvement

Thinking beyond the typical supplier relationship can be a source of competitive advantage for your company

Integrating supplier metrics across your business can improve decision making, operational performance and financial results

Top 3 Takeaways

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Acknowledgement & Questions

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Shire

Quality Compliance

Mersana

Therapeutics

Doris Hallamasek Radha Iyengar

Eric Ludewig Eva Jack

Kelly Quesada Michael Kaufman

Acknowledgement